Search

This article from Kiplinger Personal Finance discusses various investment options for individuals seeking income from their portfolios. It notes that fixed income is returning to a more normal state, with risk-free Treasuries offering real yields of about 2% and higher yields available on riskier high-yield bonds. The article provides a guide to attractive income-producing investments in nine different categories, ranging from low-risk to higher-risk options. It emphasizes the importance of having a financial plan and considering individual financial situations before investing. The article also highlights the potential for higher yields in foreign stocks and leveraged investments, while emphasizing the importance of diversification. [Extracted from the article]

Higher rates can stress property borrowers as well as lead to higher yields for bonds, which some investors see as yield competition for REITs. HOW TO INVEST: Yields average 6% to 7% in the sector, but Lack notes that free-cash-flow yields (free cash flow per share divided by share price) are nearly double that, and he projects that those flows will grow in the mid-single- digit percentages this year. For lending to these riskier businesses, investors are compensated with higher yields than investment-grade bonds offer (the current yield of a widely used high-yield bond index is nearly 9%). Yields are respectable again in Treasury securities and high-grade corporate IOUs and much plumper in riskier high-yield bonds. [Extracted from the article]

STAYING AT HOME You can loosely divide U.S. companies into three groups: those negatively affected by dollar appreciation, those helped by a strong greenback, and domestically oriented outfits that are not directly impacted by currency movements. CURRENCY CONTENDERS OUR PICKS FOR A RISING GREENBACK The stocks and funds below should be able to do well when the dollar is strong. INVESTING Among the many challenges confronting investors in 2022 is the dizzying rise of the U.S. dollar. [Extracted from the article]

INVESTING A Fund Legend Shares Stock-Picking Secrets On a recent sunny morning in New York City, Ron Baron, founder, chairman and chief executive officer of Baron Capital, is standing and studying Sixteen Jackies, a famous painting of Jackie Kennedy by Andy Warhol that Baron purchased through a dealer. Past performers include Paul McCartney, Elton John and Billy Joel (one performer whom Baron would like to perform someday is Bruce Springsteen, who hails from Baron's hometown of Asbury Park). "The pool of investors focused on what a company will earn in five years is much smaller than on what it'll earn next quarter or year", says Andrew Peck, co-chief investment officer (with Cliff Greenberg) and a portfolio manager who joined the firm in 1998. Baron Growth is the top midsize-company growth fund since its inception in 1994; Baron Partners and Baron Focused Growth are the top performers among all mutual funds since their inceptions in the 1990s. [Extracted from the article]

These funds typically build their long and short bets with an overall target in mind for net long exposure, or the difference between the fund's long and short positions. We'll introduce three of them here: long-short funds, market-neutral funds and managed-futures funds. MARKET-NEUTRAL FUNDS Market-neutral is a long-short strategy with a twist: The funds balance long and short stock exposures in order to achieve a 0% net long exposure to the stock market. The fund selects investments among 10,000 stocks listed around the globe, which are first filtered by a quantitative process that helps to identify statistically cheap stocks with good businesses for the long side of the portfolio and, conversely, low-ranked securities with declining earnings trends for the short side. [Extracted from the article]

The yield on VANGUARD FEDERAL MONEY MARKET (SYMBOL VMFXX, YIELD 0.19%) should rise steadily this year, partly because there is a time lag between Fed moves and yield moves in a money market portfolio. Colby observes that on only a handful of occasions over the past 20 years did the ratio of 10-year muni yields to 10-year Treasury yields surpass 90%. Find ATTRACTIVE YIELDS in Today's Market THE RISKS: As with Treasuries, investment-grade munis (there is also a high-yield muni market) are high-duration bonds that are particularly sensitive to interest-rate movements. [Extracted from the article]

INVESTING With their winning combination of low account minimums and affordable access to professional investment and financial-planning advice, robo advisers continue to grow briskly. Rewards from shopping at hundreds of brands are swept into investment accounts, and clients can easily allocate a portion of each paycheck to an account. Review the menu of investment options and the extent to which customers can fiddle with the robo's default portfolios. Customers whose self-tailored portfolios stray too far from their stated investment goals and risk tolerance receive nudges from Wealthfront, which also offers sophisticated tax-loss harvesting and tax-sensitive rebalancing strategies. [Extracted from the article]

3%-4% HIGH-YIELD BONDS High-yield "junk" bonds are issued by companies with below-investment-grade ratings. PGIM HIGH YIELD (PHYZX, 4.1%), which focuses on higher-rated junk (that is, bonds rated double- and single-B), has placed in the top performance decile of high-yield funds over the past decade. 1%-3% INVESTMENT-GRADE BONDS In normal times, the core of a typical fixed-income portfolio comprises investment-grade bonds issued by the U.S. Treasury, government agencies and corporations that provide income without large fluctuations in bond price. But today, the sub-5% average yield for "high-yield" bonds is extremely low by historical standards, a function of the current low-interest-rate regime and tight spreads between junk and investment-grade bonds. [Extracted from the article]

INVESTING THE SEMICONDUCTOR INDUSTRY GRABBED headlines in 2021 mostly due to a supply shortage that crippled industries, such as autos, for which chips are a key component. Vying with Nvidia to be the most valuable semiconductor company (by market value) in the world, Taiwan Semi is investing $100 billion from 2021 to 2023 in new chip-fabrication facilities to meet supply shortages and rapidly expanding demand. Angelo Zino, an analyst for investment research firm CFRA, foresees a "super cycle" for the industry over the next decade as the content per device and sophistication of semiconductors grow. [Extracted from the article]

To lure more young investors, it now charges no fees for accounts with balances of less than $10,000; a $3 per month flat fee for those with a $10,000 to $50,000 balance; and a 0.35% annual fee for accounts with more than $50,000. The annual fee of 0.89% is high relative to other robos, but it's lower than the usual fee for a private wealth manager, which typically charges 1% or more for accounts with less than $1 million. CHARLES SCHWAB As with Fidelity and Vanguard, Schwab has had great success in coaxing its own long-standing, self-directed brokerage clients into the firm's two robo offerings, Intelligent Portfolios and Intelligent Portfolios Premium, which helps to explain why the lion's share of its digital-advice clients are over the age of 50. The minimum account size is $2,000, and accounts of up to $10,000 are free of fees; larger accounts are charged an annual 0.25% fee and come with access to a human investment adviser. [Extracted from the article]

INVESTING PRESCRIPTION FOR 2022 AS THE COVID-19 PANDEMIC recedes, routine doctor and hospital visits, along with deferred medical procedures such as cataract surgery and heart valve replacements, are returning to normal. With innovation and some of these secular trends in mind, we identified six intriguing health care stocks that literally span the alphabet, from letter A to letter Z. We particularly like companies that address large and growing end markets, especially global ones. Eaton Vance's Kritzer calls Optum, an industry leader in the digitization of services, "a very large health IT company inside an insurance giant.". [Extracted from the article]

And therein lies an opportunity for income-starved investors, who can now find yields on assets such as high-quality stocks, real estate investment trusts and high-yield bonds that were unavailable in recent years. Prices, yields and other data are through April 17. 0% - 2% SHORT-TERM ACCOUNTS Yields on short-term, fixed-income accounts and securities follow the Fed's short-term interest rate. Mayukh Poddar, portfolio manager at Altfest Personal Wealth Management, says that in normal times, munis yield 80% to 85% of what equivalent-maturity Treasuries yield. At the start of 2020, high-yield bonds yielded only 5%, and the spread over Treasury yields of similar maturity averaged only three to four percentage points. [Extracted from the article]

It's little wonder that investors worry about the turmoil spreading to the world's other financial markets - or about whether to invest in the humongous Chinese market at all. AHEAD AHEAD TOPIC A THE NEWS FROM CHINESE financial markets in recent months certainly has succeeded in grabbing headlines. [Extracted from the article]