Income-Producing Investments Guide: 9 Categories to Consider
“Yields on Investments Are on the Rise: Where to Find Attractive Income Opportunities in 2024”
As the Federal Reserve signals a potential rate cut in 2024, income-hungry investors are eyeing enticing yields across various asset classes. From bonds to dividend stocks to real estate investment trusts, opportunities abound for those seeking to boost their income portfolios.
One standout area is short-term accounts, where yields are following the movements of the Fed’s short-term interest rates. With the possibility of rate cuts looming, investors are advised to consider locking in today’s yields by investing in one- to five-year bonds. Vanguard Short-Term Treasury and Vanguard Ultra-Short Bond are among the options offering attractive yields in this category.
Moving up the risk ladder, investment-grade bonds provide a stable income stream with minimal price fluctuations. Funds like FPA New Income and DoubleLine Total Return Bond offer opportunities in this space, with a focus on securitized debt and mortgage-backed securities.
Municipal bonds, offering tax-free interest income, are another attractive option for income investors. Vanguard Tax-Exempt Bond and First Eagle High Yield Municipal are recommended choices for those looking to diversify their portfolios with high-quality munis.
For those seeking higher yields, high-yield taxable bonds, also known as junk bonds, present an opportunity to earn more than investment-grade bonds. Osterweis Strategic Income and CrossingBridge Low Duration High Yield are highlighted as defensive options in this category.
Dividend stocks, particularly in the oil and pharmaceutical sectors, offer a way to earn income while potentially benefiting from dividend growth over time. Companies like Devon Energy, Air Products & Chemicals, and Roche Holding are mentioned as solid picks for dividend investors.
Real Estate Investment Trusts (REITs) and Midstream Energy Infrastructure companies provide exposure to real assets and high yields. Boston Properties, Simon Property Group, and Energy Transfer LP are recommended choices in these sectors for income-seeking investors.
Business Development Companies (BDCs) and Closed-End Funds round out the list of income-producing investments, offering high yields and opportunities for diversification. Ares Capital, Sixth Street Specialty Lending, and BlackRock MuniYield are highlighted as attractive options in these categories.
Overall, with yields on the rise and a diverse range of income opportunities available, investors have plenty of options to consider as they seek to enhance their income portfolios in 2024.
