The 10-year Treasury yield stopped just short of 3% last week and the recent Commitment of Trader’s data is showing massive short exposure to the 10-year futures contract by non-commercial traders. These are speculative positions betting that the 10-year yield will continue to rise (bond prices will continue to fall). The market has a funny…
A High-Yield REIT for Retirement Income Portfolios
A Real Estate Investment Trust (REIT) is a type of investment structure that allows investors to add exposure to real estate in their portfolio. REITs receive preferential tax treatment at the company level, where virtually all taxation is passed on to the investors, if they pay out at least 90% of net income as dividends. …
New “Income” Stock Investments
The move higher in bond yields since the election has slowly been creating some new opportunities in stocks that pay higher dividend yields. These types of stocks tend to be owned for the dividend income so they are usually more affected in the short-term by changes in the bond market (changes in relative yields) than…
Why I Don’t Trust this Bounce in Stocks
One of the most important determinants of stock market returns in the short/intermediate term is investor appetite for risk. When investors in the market are confident and display risk seeking behavior, we tend to see assets (like stocks) ignore bad news and rally on good news. However, the reverse occurs when investors are displaying a…
Retirement Income Series, Part 3: Selling Options for Income
This post is going to talk about perhaps my favorite source of investment income. It’s something that very few people take advantage of because it can be a little confusing to learn but is ultimately well worth the time. I will go as far as to say that it is probably the most misunderstood and…
Retirement Planning, Part 3: Retirement Income from Bond Interest & Dividends
I spoke with a client earlier this week who called to make sure he’s doing everything needed to retire on time. He was recently surprised to hear that a family member who retired a few years ago needed to go back to work. My client wanted to make sure he’s on track and saving enough…
Retirement Planning, Part 3: Income Strategies: Annuities
A very common question I receive is “what’s your opinion of annuities?” The person is always looking for either a “yes, they’re good” or “no, don’t use them” type of answer but in financial planning general advice is always bad advice. My response is always “they’re a way to generate guaranteed income.” Then the person…