5 Tips For Finding The Best High-Yields The Market Has To Offer...
By Nathan Slaughter
It's one of the biggest trends of our lifetime, yet you hardly hear anyone talk about it anymore.
And while the tipping point may have happened a few years ago, we're still in the early innings of a very prosperous trend.
Between now and 2030, roughly 10,000 Americans will turn 65 every day. You might be among them. This marks a major shift that will play out for millions of people in the next years and decades. And I think it could lead to a surge in popularity for income investing.
Think about it… There's about $20 trillion sitting in U.S. mutual funds. Most of those assets held by soon-to-be retirees, according to the Investment Company Institute.
A former colleague of mine put it best: "As baby boomers wind down their working years, they're going to do what retirees before them have done — shift from riskier stocks and commodities into more buttoned-down income investments. In fact, given the rocky market in the past decade and disappearing pensions, the shift could be larger than most people think."
In short, we're talking about a potential golden age for income investing.
Now, don't get me wrong… I'm not advocating for blindly buying any income-paying security you may come across. There is no guarantee the graying of the baby boomers will simply lead to a massive bull market across all income securities. That's why it's still very important to select high-quality income investments. I'm talking about ones that pay a sizable, rising dividend, and carry a degree of safety so you can rest easy owning them. If you do this, then the massive trend I'm talking about will be icing on the cake.
With all this in mind, I spent some time thinking about some tips to help you find the best high-yield plays for maximizing returns. These are what I use to guide my portfolio choices over at High-Yield Investing.
No matter your experience level, they should give you an edge in finding the best high-yield investments on the market. My advice? Read over these tips, print them out if you have to, and don't invest in an income stock without keeping them in mind.
5 Tips For Success…
Tip No. 1: Look off the beaten path
Always remember: yield is a function of dividends and share price.
If prices rise, the yield on a security falls, all else being equal. So if millions of retirees start buying popular high-yield securities in search of solid income, then their prices would likely rise, pushing yields down.
That's why it's valuable to look off the beaten path for higher yields — particularly into the special classes of securities built for income investors.
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