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By Larry Greenfield

For the retiree and personal investor alike there is a shared problem when approaching one’s ability to maximize their potential return – the search for yield. By this I mean the return, be it an interest or regular dividend payment from an investment expressed as a percentage of the purchase value. Year after year this has become a more vexing problem because of the increasing complexity of investment choices, market volatility and information overload – there is a bewildering array of information resources often giving conflicting advice. There was a time not so long ago that a decent return could be had from ones savings account alone. Today yields below one percent are the norm amongst traditional saving accounts – so where does the retiree or personal investor look?

Increased yields for both savings and checking accounts can be had from online institutions. Many brick and mortar banks offer better rates for their online savers in return for them foregoing the chat with the bank teller or the free lollipops on display. I presume this is either due to lower operating costs or incentivizing savers not to use a physical bank.

In my opinion those savers willing to take on a little more risk, though potentially a much better return the municipal bond market is worthy of consideration. With yields historically higher when compared to treasuries and offering a tax free yield, municipal bonds are a one of life’s few “no brainer” options.  Investors in high tax states in particular find these bonds are even more attractive. Recently the bonds have appreciated notably, but municipal bonds are largely owned by individual investors unlike corporate bonds and because of this are more susceptible to headline risk. For example, when Meredith Whitney proclaimed the pending death of the municipal bond market what followed was what some would regard as being the buying opportunity of a lifetime. Be patient and I am willing to bet there will likely be another opportunity to buy. In the meantime dollar cost averaging in is never a bad strategy. For the unfamiliar reader by dollar cost averaging I mean acquiring over time a portion at a time.

For those investors willing take on the risk of equities there are currently juicy yields in the international telecommunications sector. Like most economic sectors they have rallied significantly with stock values appreciating. An IST is an Exchange Traded Fund that provides diversification plus a yield much above average and is comprised of many different stocks. Whatever your strategy whether aggressive or conservative there is always room for yielding instruments in your portfolio, the only question is how much sleep do you wish to lose in return for a more comfortable bed to sleep in…

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