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Investing Specialists

Tactics for Combating Low Bond Yields

Dividend-paying stocks and preferreds, lower-quality bonds, and stable-value funds top readers' lists of investments for a yield-starved environment.

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Few experts predicted that bond yields would go even lower in 2014 than they were at the outset of the year, but they did just that. Ten-year U.S. Treasury bonds were yielding 3% as 2014 dawned; as we rang in 2015, the benchmark yield was hovering just under 2.2%.

The ongoing drip-drop downward of interest rates has sent fixed-income investors scrambling in all different directions. In Morningstar.com's Income & Dividend Investing forum, I recently asked our readers to share their strategies for investing in bonds today. If they're avoiding bonds due to low yields and worries that rising bond yields will eventually crunch bond prices, what are they investing in instead?

Christine Benz does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.