The Dilemma for Income Investors

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The Dilemma for Income Investors

(New York)

Those seeking to buy income-focused investments have a dilemma on their hands right now. Is it safer to buy high-yielding blue chips like AT&T, or better to buy a diversified high yield fund? Barron's tries to answer this question and gives a definitive opinion-the bond fund. While both may offer similar yields of between 5-6%, holding money in just one or a small handful of blue chips offers much more risk. Not only could dividends be cut, but underlying businesses could deteriorate. And without the benefit of diversification that a broad ETF offers, a portfolio could see heavy losses.

FINSUM : This is a good, basic article to share with any clients who ask why they are buying debt instead of just owning a few stocks.

  • stocks
  • income
  • dividends
  • blue chips
  • high yield

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Bonds

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