Today's income investors are being squeezed by low yields, more risks and rising taxes. It's time to cast a wider net while carefully balancing the trade-offs between yield and risk. Begin by considering the type of income you are looking to achieve.
What kind of income are you trying to generate?
Striking a prudent balance between income and risk today requires widening the opportunity set by combining traditional and non-traditional sources. A flexible approach can help you balance the trade-offs between yield and risk.
With rates near all-time lows, many investors are seeking opportunities in new areas to derive more current income from their portfolios. You can use an alternative approach to allocate across less-traditional strategies.
Equities with dividend growth are crucial to long-term income generation strategies. Your income portfolio can keep pace with rising costs over the course of a long retirement by investing in dividend-paying equities.
Municipal bonds have long offered investors the potential to generate income and save on taxes. Allocating to flexible strategies or efficient muni portfolios can help you find income in today's low yield, low growth environment.
Understand the Risks in Today's Markets
Regardless of your income needs, the first step to building better income portfolios is an understanding of the rising risks in today's markets.