Interest rates have moved up this year but are still near historic lows. This is especially true at the front end of the yield curve where people are basically earning nothing on their savings, money market, and even short-term CD accounts (and even losing money net of inflation). Demand from yield-starved investors and the opportunistic … Continue reading No Free Yield
Category: income investing
All About Dividends
When it comes to stock investing, conventional thinking dictates that returns are all about capital appreciation. However, for many investors, price appreciation may not be the main driver of total return at all. In fact, dividends can constitute a larger portion of total returns than many people may realize. Dividends Overlooked According to Loomis Sayles, … Continue reading All About Dividends
Last Yield Standing
For those living off a fixed income, the current interest environment is, to say the least, quite unsavory. Extending out to 30 years on the Treasury curve only fetches a paltry 3% (and a taxable 3% at that). This has interest-starved investors loading up on junk bonds and leveraging up bond portfolios (risk parity anyone?). … Continue reading Last Yield Standing
Dangers of High Yield Hunting
Fixed income investors that were accustomed to earning 5% on a portfolio of government bonds are now getting 2% for the same securities. The steep drop has interest starved investors hunting for yield. As usual, the easiest way to increase yield has been to increase risk, and investors have taken the path of least resistance. … Continue reading Dangers of High Yield Hunting
Selling Covered Calls
You may have heard the terms “selling covered calls” or "covered call writing." This strategy allows someone who owns stock to sell someone else the right to buy the stock at a predetermined price on or before a predetermined date. This right to buy is commonly known as a “call option.” The seller of a … Continue reading Selling Covered Calls
