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I am looking for ways to invest so that my investment can generate steady income - I'd prefer a passive one to an active investment. What would be the options there?
I am looking for ways to invest so that my investment can generate steady income - I'd prefer a passive one to an active investment. What would be the options there?
The usual mix is bonds, REITs, MLPs (also available in the form of dividends rather than partnership distributions), dividend-paying stocks, and preferred shares. There are also alternatives.
You can diversify to any level of detail across and within each of these typical categories. You can do it through any combination of individual issues, mutual funds, sector ETFs, and ETNs (MLPs).
You may be able to find catch-all mutual funds that will include both bonds and income-producing equities (Fidelity and Franklin come to mind, there are others, maybe Wellington), not too sure about finding also MLPs and REITs in the same fund. But you could conceivably cover all these bases in 3-4 funds, but as many as 8 or 10 or even 25.
You need to determine your gross amount, expected return, level of tolerable risk, time horizon, and allocation.
The usual mix is bonds, REITs, MLPs (also available in the form of dividends rather than partnership distributions), dividend-paying stocks, and preferred shares. There are also alternatives.
You can diversify to any level of detail across and within each of these typical categories. You can do it through any combination of individual issues, mutual funds, sector ETFs, and ETNs (MLPs).
You may be able to find catch-all mutual funds that will include both bonds and income-producing equities (Fidelity and Franklin come to mind, there are others, maybe Wellington), not too sure about finding also MLPs and REITs in the same fund. But you could conceivably cover all these bases in 3-4 funds, but as many as 8 or 10 or even 25.
You need to determine your gross amount, expected return, level of tolerable risk, time horizon, and allocation.
good luck! depends on inflation. many top researchers think even 2-3% real return may be tough to get going forward with stock valuations this high and interest rates so low
I can answer 5% nominal yield (income only, not changes in asset price), while I could only venture a guess in terms of total return (income + changes in asset price) and real return (income + changes in asset price - inflation) and capital risk.
In terms of nominal yield, 5% average is not too much to ask. You could achieve it with a handful of dividend stocks, including T, high-yield bonds, REITs, and a few MLPs.
You could find quite a few high yield bond funds and/or strategic income funds (typically bonds, including emerging market + preferred equities) with nominal 5% yields or higher (see Franklin, Fidelity, and the like).
You would probably have to form your own basket of individual 4%-5% dividend-yielding stocks.
You would have to form your own basket of REITs.
As for MLPs, try the ETNs AMJ and AMLP for an average nominal yield of around 5%, issuing 1099s instead of K-1s, in case you value tax simplicity over some extra yield but with tax complications.
Again, these are nominal yields only. Please do your own due diligence, especially in terms of all risks, including market risk, interest rate risk, credit risk, management company risk, taxes, inflation, etc.
good luck! depends on inflation. many top researchers think even 2-3% real return may be tough to get going forward with stock valuations this high and interest rates so low
Then what do you recommend? Actively investing in real estate income property/properties? My goal is to generate wealth.
Stock valuations are much lower in non U.S. markets.
To be honest I can't think of any asset class today that isn't at full value. That makes anything out there a higher risk today.
Personally I invest for total return with a mix of assets.
To be honest I can't think of any asset class today that isn't at full value. That makes anything out there a higher risk today.
Personally I invest for total return with a mix of assets.
equities ,bond funds and income funds but i am also starting to phase myself out at work for retirement so my model runs about 40% equities right now..
equities ,bond funds and income funds but i am also starting to phase myself out at work for retirement so my model runs about 40% equities right now..
Would it be possible for you to show share your portfolio?
Last edited by lifeexplorer; 06-24-2014 at 07:56 AM..
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