Interest & Dividends
Dividends are a double-edged sword for investors
The dividend story has been a part of investing for generations. It is just as valid today as in the past. In fact, it has taken on even more importance in today’s low-interest rate environment. With the ten-year treasury bond yielding only 1.5% investors are looking for alternatives to both dividends and growth.
Should I wait until interest rates move higher?
The elusive 3% return on five year fixed rates remains a challenge for safety conscious individuals. The two benchmarks for safe fixed returns are Certificates of Deposits and five-year Treasury bonds. The highest current five-year CD on Bankrate.com is 1.98%, and the yield on the ten-year Treasury bond is 1.85%. (five-year is 1.4%) Both are a long way from the desired 3% yield for fixed income assets.