2 Short-Term High-Yield Investments To Buy Now

Money, Profit, Finance, Business, Return, Yield

In a low-interest-rate environment like this one, dividend stocks are the best place to find short-term high-yield investments. Try these two.

Despite some turbulence of late, the market indexes (at least the S&P 500 and the Dow) are still close to all-time highs. Stocks have soared at an amazing pace over the last year and the past several months. A promising environment of a booming economy complemented by trillions in stimulus still lies ahead. But how much of that wonderful news is already priced in?

While stocks may well trend higher over the rest of the year, it is unlikely the recent remarkable pace higher can last. The easy money and sky-high returns of the earlier recovery may be over. But the party for income investors is still going strong.

You can still find short-term high-yield investment opportunities that haven’t existed in a decade.

Despite the cyclical stock rally over the last several months, many stocks in the energy and financial sectors are still well below the pre-pandemic prices. In fact, some of the highest-yielding stocks on the market still haven’t recovered from the pandemic. And yields are still sky-high.

You can find yields of 6% or 7% and even higher on stocks with good momentum and a positive outlook over the remainder of the year. These kinds of yields haven’t been around since 2010, when stocks were still depressed from the financial crisis. Those yields didn’t last. And neither will these.

The kind of income return still afforded by the current environment is nothing to sneeze at. The benchmark 10-year Treasury bond is still paying just 1.58%. An AAA-rated 20-year municipal bond is paying 1.35%. The iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) yields just 2.65%.

Locking in an income return of 6% or 7% in this income-challenged environment is a coup. But the opportunity won’t last much longer. Let’s grab some fat yields while we still can.

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