EC Where To Find Yield Today

Having the Fed funds rate back near zero is fantastic if you’re a borrower. It’s not so great if you’re an investor looking for income. T-bills, savings accounts and money market funds all yield essentially zero, and it’s hard to find CDs yielding more than about 1.5%.

It is still possible to generate a respectable income stream on your investments without taking excessive risk. You just have to look a little harder than usual and be willing to look at new pockets of the market you might not have considered before.So today, we’re going to cover where to find the highest yields.

Not surprisingly, some of these sectors were badly beaten up in March, and all have to be considered a little risky in the post-coronavirus environment. But at current yields, at least you’re being adequately compensated.

Where to Find the Highest Yields

REITS

I’ll start with real estate investment trusts (REITs). I covered REITs back in early April, noting that the sector had been battered and left for dead.

Not all the negativity in the sector was unwarranted, of course. With most of the country on lockdown for the past two months, a lot of commercial tenants have been unable to pay the rent. Some REITs have lowered or suspended their dividends as they assess the damage.

It might be a while before things start to look truly normal again. Restaurants, gyms and entertainment companies in general will be licking their wounds for months. It may be well over a year before their customer levels recover to pre-crisis levels, which means landlords will need to be flexible. So if you’re a REIT investor, you’ll want to focus on the strongest names with the best access to capital.

Back in April, I mentioned Realty Income (O). While the REIT is focused on retail, its exposure to riskier pockets like full-service dining and gyms is tolerably small. At current prices it yields 5.5%, and I’d consider that dividend safe.

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Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not ...

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