Past Is Prologue? Not for Income Investors in a Low-Yield World
Fixed income investors have been rewarded over the past 40 years, but the future looks far more challenging.
Investment income has long been relied upon to cover future and current spending for individuals, endowments, public and private pensions, as well as other institutional investors. Income-producing assets, largely in the form of fixed income securities, have anchored portfolios for many decades. Historically, bonds offered yields several hundred basis points above inflation. However, interest rates have fallen dramatically over the last 40 years.
Today’s paltry yields and elevated bond price risk complicate investing for income, but compelling options for flexible, nimble investors always exist.
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