Yield over Risk

July 19, 2015, by Scott Greenwood


This week Ben over at A Wealth of Common Sense had a great summary of the current low-yield environment I thought worth sharing. We are frequently speaking with our clients about the risk/reward relationship we are seeing with income investments. It’s difficult for many investors to remember life before the bond bull market to understand what happens when interest rates rise.

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Here is a poignant quote from Ben with along with table to boot:

Unfortunately, there’s no such thing as a “safe bet” if you’re looking for yield right now. Risk and return are always attached at the hip, but risk gets dialed up a notch with income-producing investments when yields are so low. Investors also have to be aware of the fact that there are plenty of others out there who have also joined the chase for yield. It’s hard to say how this will affect these investments going forward.


Now is not the time for investors to unknowingly dial up risk in hopes for a little extra income. Doing so may prove costly.