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Searching For Income When Rates Are So Low

Wednesday, October 3, 2012 - 5:01 AM
From the Wall Street Journal
In an era of painfully low interest rates, financial pros are advising income-hungry investors to include diverse assets such as dividend-paying stocks, emerging-markets stocks, real-estate investment trusts and high-yield corporate bonds in their conservative portfolios.
[...]
Here's a look at why investment pros are recommending these four areas to conservative investors — but also what could go wrong.

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1
Ken TuminKen Tumin5,468 posts since
Nov 29, 2009
Rep Points: 125,029
1. Wednesday, October 3, 2012 - 8:08 AM
I think emerging-markets bonds might be a better way to go, for the "conservative investor" willing to assume some risk, than emerging-markets stocks. The bonds often have attractive yields, are far less volatile than the stocks, and the total return is often nearly as good as stocks. Unlike a couple of decades ago, when the emerging markets were debt disasters waiting to happen, many emerging markets today have manageable levels of debt. I wouldn't buy individual foreign bonds or single-country funds, but there are many mutual funds, CEFs, and ETFs that provide a diversified basket of emerging-markets bonds. Of course, the "very conservative investor" who isn't willing to stomach any risk to principal at all wouldn't be interested. By the way, bear in mind that investments in any foreign security will involve currency risk, unless dollar-denominated.
1
WilWil242 posts since
Feb 26, 2010
Rep Points: 1,281
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