Fixed-income investments seem like a losing bet for now. Interest rates are low resulting in a small amount of income in dollar terms for even the largest investors. A $1 million investment in 30-year Treasury bonds offers about $36,000 a year in income. This might seem low, but Treasury bonds really have not been a… Read More
Fixed-income investments seem like a losing bet for now. Interest rates are low resulting in a small amount of income in dollar terms for even the largest investors. A $1 million investment in 30-year Treasury bonds offers about $36,000 a year in income. This might seem low, but Treasury bonds really have not been a source of high income since about 1986, when rates fell below 9%. Gains for fixed-income investors have come from rising bond prices that accompanied falling rates. When rates rise, prices will fall, and those losses could destroy several years’ of worth of low-income payments. While even investors with million-dollar accounts are earning low income, most investors are earning even less income in dollar terms. To increase income, many investors have accepted more risk. An… Read More