NEW YORK (CNN/Money) - The more bonds rally, the more you hear about how much better off investors would be in stocks.

It's true that bonds aren't offering much of a return these days. The 10-year Treasury's yield of just 3.1 percent is downright meager. Think of it: at the end of 10 years, investors' total return on the 10-year will be just about 35 percent. Even if you bought shares three years after the Great Crash in 1929, you got a better return on stocks than that.

The bond market, in fact, seems to be predicting the United States is going to have a Japan-like experience over the next several years as it works off the excesses of the bubble. That's an incredibly pessimistic outlook, given the scope of Japan's policy failures over the past decade.

But Merrill Lynch strategist Kari Pinkernell points out that even though bond yields are at their lowest level since the 1950s, the stock market's dividend yield is even lower. At 1.9 percent, the S&P 500's yield is at less than half its historic level of 4 percent.

Even stranger, investors have been flocking to stocks that don't pay dividends. This year, non-dividend paying stocks in the S&P 500 have outperformed the 100 stocks that have the highest dividend yield. By the same token, stocks with dividend yields lower than the 10-year Treasury's yield have performed better than stocks that yield more than the 10-year.

The good news for investors is that all this means there are still plenty of opportunities in high-dividend paying stocks. When excluding companies whose dividends appear to be at risk, Merrill has found 82 stocks in the S&P that yield more than the 10-year.

The problem? It seems strange that dividend-paying stocks have performed so poorly, especially given the recent cut in the dividend tax. That investors are opting instead for non-dividend paying stocks -- like techs and biotechs -- suggests that the market may have become overly speculative.