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The article discusses the benefits of investing in preferred shares, particularly those offered by sound regional banks such as Bank of Hawaii, Citizens Financial, and M&T Bank. These preferred shares have high yields, with coupons ranging from 7.375% to 8%, and offer a reliable source of income. The article advises investors to be selective and avoid preferred shares from unrated or questionable companies. It also mentions that buying preferred shares directly can be a good option for those seeking a known yield at a higher spread above cash or bonds. [Extracted from the article]

The article discusses the benefits of bond ladders as an investment strategy. It suggests that actively managed funds from reputable managers may outperform index-based funds in the long run, but there is near-term price risk. The article recommends short or ultra-short bond funds within retirement plans or cash if options are limited. It also suggests investing in individual bonds or target-maturity funds or ETFs to lock in current rates without near-term price risk. The article emphasizes the importance of laddering maturities to maximize yields and control the timing of repayment. It provides examples of different bond options and their average yields to maturity. The article concludes by highlighting the ability to roll over the principal on one's own terms when investing in individual bonds. [Extracted from the article]

According to an article in Kiplinger Personal Finance, interest rates are expected to remain stable for the rest of 2024, resulting in steady prices for fixed-income securities. The author suggests that investors should focus on getting paid well and on time, and maintaining a diverse array of income investments. They recommend strategies such as rolling over investments in Treasury bills, investing in short-term bond funds with high monthly payouts, and sticking with high-yield, floating-rate credit, and ultra-short categories. The author advises caution when considering international bonds and long-term investment-grade corporate bonds. They also emphasize that their recommendations are primarily for new investments and that existing investments should not be disposed of solely based on short-term performance. [Extracted from the article]

The article discusses various investment strategies for generating income in a changing economic climate. It suggests that as the Federal Reserve considers easing credit and economic indicators cool down, it may be wise to guarantee potent income through high-yielding funds and bond ladders. The article also highlights the potential rewards of higher-coupon and higher-dividend holdings in the bond market. Additionally, it mentions specific bond funds and investment options that readers may consider. The article concludes by stating that while interest rates may not return to zero, the appetite for higher yields is likely to persist. [Extracted from the article]

The article discusses the frustration among savers and investors regarding the slow pace and reduced size of dividend increases. Despite having over $2 trillion in cash, many companies have become more conservative with their dividend raises. The article explores possible explanations for this trend, such as companies hoarding cash due to its increased value and CEOs being cautious about committing to high dividends in anticipation of a recession. However, signs of a comeback are emerging, with some companies recently increasing their dividends. The article also mentions a prediction that higher payout ratios and fatter dividends are inevitable in the future. [Extracted from the article]

This article from Kiplinger Personal Finance discusses the success of high-yield investments over the past 15 years. It highlights the impressive returns of companies like Apple, Amazon, and Microsoft, as well as various funds and partnerships. Contrary to the belief that high-yield investments are risky or unsustainable, many of these investments have provided consistent interest and dividends while maintaining or increasing their share prices and net asset values. The article emphasizes the success of Ares Capital, Pimco funds, Invesco Senior Income Trust, and other high-payout investments. It concludes that high-yield investments have proven to be profitable and reliable over the long term. [Extracted from the article]

Municipal bonds have proven to be a strong investment option, with tax-exempt bond funds outperforming taxable funds in the fourth quarter of 2023. High-yield municipal bonds have particularly excelled, with Pimco High Yield Municipal Bond returning 8.6% in 2023. While tax-free yields are currently low compared to Treasury yields, demand for municipal bonds is expected to remain high, especially once the Federal Reserve reduces short-term money rates. The article recommends allocating investments to high-grade actively managed funds, high-yield funds, and individual bonds, with a focus on new issues from one's home state. Additionally, it suggests considering interval funds like Nuveen Enhanced High Yield Municipal Bond Fund, closed-end funds like RiverNorth Flexible Municipal Income Fund, and Baird Strategic Municipal Bond for potential investment opportunities. [Extracted from the article]

The article discusses the recent rallies in stocks and fixed income, arguing that they are not a mirage or market manipulation but rather a reflection of the sound economic state of the United States compared to China and Europe. The author suggests that the surge in investments is due to oversold opportunities in 2022 that were left unexplored until positive earnings, disinflation trends, and confidence in the Federal Reserve broke the logjam. The article also mentions challenges such as sticky mortgage rates and the condition of commercial real estate, but overall, it suggests that the ideal environment for income investors is closer than expected. The author advises locking in high yields on bonds and highlights the Invesco BulletShares Corporate Bond ETFs and individual high-quality bonds as potential investment options. For stock investors, the article suggests that brief sell-offs should be ignored as long as they are a reset of valuation, and it emphasizes the prominence of dividend yield. The article concludes by stating that as interest rates fall in 2024, the argument that corporations would be forced to refinance their debt at punitive rates is no longer valid, and investors should consider yields over 5% as potential investment opportunities. [Extracted from the article]

High-yield corporate bonds, often referred to as "junk" bonds, have consistently performed well and outperformed diversified bond indexes. The high-yield bond sector has placed first or second in the Callan Periodic Table of Fixed Income Index Returns 10 times since 2003. These bonds have also shown strong returns compared to other bond funds, with the SPDR Bloomberg High Yield ETF having a 15-year annualized return of 8.0%. The perception of high risk associated with these bonds is exaggerated, as default rates are relatively low and bondholders typically recover a significant portion of their principal even in the event of a default. Rising interest rates can also benefit the high-yield sector. Demand for high-yield bonds is high, and the sector remains well-priced, making it a potentially lucrative investment option. [Extracted from the article]

This article from Kiplinger Personal Finance discusses smart options for managing cash investments. The author advises against using a one-size-fits-all asset allocation formula and emphasizes the importance of considering individual needs and goals. They suggest exploring alternative cash-management opportunities, such as investing in funds that hold high-yielding assets or targeting short-term maturities for higher yields. The article also highlights the potential benefits of actively managed ultra-short bond funds in a changing economic environment. Overall, the goal is to generate substantial income with minimal risk and maintain liquidity. [Extracted from the article]

Another way to piggyback on soft-landing conditions - and this is also no secret, as it is timely - is via investments in lenders that borrow at fixed rates and lend at high and variable ones. These high-yield offerings are wagers on a "soft landing", which I define as a drawdown of inflation via higher interest rates without provoking a recession. A bevy of BDCs, bank-loan funds, high-rate credit companies and the like remain reasonably priced relative to their net asset value. [Extracted from the article]

Exchange-traded fund ALPS Sector Dividend Dogs (symbol SDOG) lost just 0.2% last year as the S&P 500 index, including dividends, disgorged 18.1%. The backdrop: In 2022, highdividend shares, led by energy and utilities, were the stoutest line of defense, along with the Dogs, the highest-yielding listings in the broad averages or each industry sector. [Extracted from the article]

The article discusses the current state of the economy and provides advice on reviewing and adjusting income investments. The economy is projected to experience steady growth with lower inflation and interest rates. The article suggests reviewing investments that have exceeded expectations and considering selling them to take profits. It also advises evaluating investments that are underperforming to determine if they are temporarily undervalued or hopeless. Additionally, the article recommends assessing the allocation of investments, monitoring dividend performance, and considering the level of risk in the portfolio. Finally, it suggests reevaluating investments that may be overvalued and considering the potential for future growth. [Extracted from the article]

In April, banks issued $80 billion of mortgage securities with loans assured by Ginnie Mae, the Government National Mortgage Association. One explanation for the high rate is that anxious lenders fear economic distress and missed mortgage payments. [Extracted from the article]

A week before the powers that be in the nation's capital mercifully managed not to default on Treasury debt, one of my favorite tax-exempt bond managers, Eve Lando, of Thornburg Funds, said to "run, not walk" to municipals. Because municipal borrowers rely on enormous direct federal grants or indirect federal support (such as the presence of Treasury bonds in escrow to buttress the munis' timely repayment of principal), the tax-exempt world should have come under heavy pressure. [Extracted from the article]

Honestly, any first-class fund firm's "total return" or "flexible" income fund occupies an advantageous position in the months ahead. That is a barbell with rising monthly distributions and a good shot at capital gains; the two funds together sport a 3.5% year-todate return and have yields in the 3% range. But if the economy does not utterly collapse, the debt-ceiling crisis ends without a default, and factors such as falling rents and low oil prices further dent the inflation indexes, bond returns will run hard to the upside. [Extracted from the article]

That is because these events stand to facilitate the breaks in inflation and interest rates that will reward (or already are rewarding) bond and income investors for courage and patience. Commentary So much has happened since early March that I barely know where to start, except to assert that the recent bank failures and the subsequent Federal Reserve reaction offer scattered opportunities. Following the recent bank failures, FS Investments chief market strategist Troy Gayeski reset his odds that interest rates have peaked, or will soon peak, from a 50-50 chance to 80-20 or 90-10. [Extracted from the article]

INCOME INVESTING Jeffrey R. Kosnett Time to Consider Foreign Bonds I normally dismiss international bonds and bond funds, whether denominated in U.S. dollars or in native currencies. (Note that most major-market international bond funds hedge the dollar.) Consequently, for the first 10 weeks of 2023, scores of big international bond funds are in the green, including PIMCO INTERNATIONAL BOND (PFOAX), up 1.1%, and VANGUARD TOTAL INTERNATIONAL BOND INDEX (VTIBX), ahead 0.88%. [Extracted from the article]

A likely peak in inflation, along with interest rates that are thereby also at or near their apex, stands to revitalize the long-running global search for yield. That should mean more demand for high-yielding credit securities, which include business development companies, or BDCs (typically high-rate lenders to small or midsize firms, with similar tax advantages to those of real estate investment trusts), nonbank lenders, and a few financial REITs. And lending at higher interest rates helps these firms build up their underlying asset values. [Extracted from the article]

Its numerous preferred-share series, such as the 4.625% L Series (symbol PSA.PRL, $19.17, current yield 6.0%) and the 4.7% J Series (PSA.PRJ, $19.62, 6.0%), yield more than twice the firm's common stock yield. Longer duration is back in favor, and the price cut on that 2% Farm Credit bond (now an eight-year note) boosts its yield to 4.6%, assuming it's held to maturity. In the final week of 2022, the Federal Farm Credit Banks, an agency with an implied Treasury guarantee, sold one-year bonds with an interest rate of 4.75%. [Extracted from the article]

When a stock sector crushes the S&P 500 index by 15 percentage points over a full year, it's normally cause for euphoria. Xcel has a lower-than-average 60% dividend-payout ratio even after a 6.5% dividend boost last March. One possible competitive reaction - hefty dividend boosts - is unlikely because utilities on average are paying out a historically lofty 70% of earnings; 60% to 65% is usual. [Extracted from the article]

Loan rates might peak this year, but for now, FIDELITY FLOATING RATE HIGH INCOME (FFRHX), the gold standard, pays a 5.5% yield. That will end the bond-price bleeding (bond prices and interest rates move in opposite directions). The Federal Reserve will likely soften its rhetoric in several months so it can pause the rate-raising campaign. [Extracted from the article]

I know of similar funds with roughly the same yields but durations of 3, which means that they stand to forfeit more than twice the capital that the RiverPark fund does should overall interest rates go on rising. Fittingly, David Sherman shares the name of the legendary World War II tank, for he is in the vanguard of an onerous trench battle against relentless forces: inflation, recession, the Federal Reserve and everything else bent on destroying bond values. The credit markets are so vast that notwithstanding the bloody numbers for 2022, I figure someone, somehow, somewhere must be breaking even or in the plus column managing fixed-income funds. [Extracted from the article]

I asked portfolio manager Ron Stahl at Columbia Threadneedle how long he would expect a fund such as Columbia Short Duration Bond ETF (SBND) or Columbia Short Term Bond Fund (NSTRX) to keep raising monthly payouts after the Fed stops hiking. Freund notes that his firm's short funds buy floating-rate and shortterm high-yield debt that will keep paying more for a decent spell whatever happens with Fed funds rates. And do managers of short-term bond and bond-like mutual funds and exchange- traded funds have strategies to deliver extra yield?. [Extracted from the article]

It pays quarterly, and in December 2021 it issued $0.057 a share on a NAV of $14.05, a 1.6% yield. As mortgage rates fall gradually, that should boost NAV some more as fixed-rate mortgage pools become more valuable until and unless loan rates drop enough to unleash massive new refinancing. In the past 60 days, the consumer price index topped 9% before settling back a bit, the Federal Reserve raised short-term interest rates three-fourths of a percentage point with promises of further hikes, apartment rents kept soaring at double-digit rates, and much more. [Extracted from the article]

Indeed, long Treasury and investment-grade corporate rates could fall harder once the bond world sees a two-month easing of the inflation readings, which would extend this bond rally. Returns lag sis-boom-bah bull markets, but the fund is rapidly closing its long-term total-return gap with the struggling Vanguard and Franklin dividend-growth funds. Since the 10- year Treasury yield topped at 3.48% on June 13, it has dropped to roughly 3%, a bond-price rally that is allaying the year-to-date losses in popular funds. [Extracted from the article]

A pair of ETFs - ALPS SECTOR DIVIDEND DOGS (SYMBOL SDOG, $55) and ALPS INTERNATIONAL SECTOR DIVIDEND DOGS (IDOG, $28) - are also scaring off the bears, with year-to-date returns of 4.4% and 2.6% respectively. All portfolio doctors should prescribe high dividends to remedy rising interest rates and stiff inflation. The July issue of Kiplinger's Personal Finance featured another of my most esteemed dividend investments, LEGG MASON LOW VOLATILITY HIGH DIVIDEND ETF (LVHD, $39). [Extracted from the article]

Hence, I forecast better results in the second half among key yield-oriented sectors: taxable and tax-exempt municipals, preferred stocks, utilities, real estate investment trusts, and corporate bonds rated A and BBB. Now, munis dated 10 years and longer are commonly priced to yield more than equivalent-maturity Treasuries - a buy signal for tax-exempts, and that is before you calculate your taxable-equivalent yield, which may exceed 7%. This turbocharged the fears of an extended and all-encompassing decline as oil prices re-escalate, high mortgage rates strangle the housing boom, and jobs, business profits and consumer spending gradually weaken. [Extracted from the article]

Higher coupon rates on new issues and lower bond prices offer better entry points. Municipals were expensive late last year, yielding less than 70% of the yield on Treasuries. The yield advantage on corporate bonds and mortgage-backed securities over Treasuries is also widening. [Extracted from the article]

This is not to sound insensitive to Ukraine and all victims, but without an impending U.S. recession, credit crunch, dividend cuts or an explosion of bad debt, there is little reason for portfolio pessimism. Anyone with a dividend-growth portfolio should ignore the trials in broad-market indexes and smile at all this cash flow. Although apartment rents are soaring, so are jobs and incomes - and yet the average apartment real estate investment trust is down around 10% off its high and a hair below net asset value. [Extracted from the article]