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Investing Specialists

Income-Seekers: 4 Mistakes to Avoid

Low bond yields and the prospect of rising rates have the potential to trip up yield-focused stock and bond investors.

Note: This article was updated on March 15, 2018. It's part of Morningstar's Guide to Dividend and Income special report. 

After a decade of meager yields, things are starting to look up for income-focused investors. It's not hard to find cash yields of 1.5%, and the Bloomberg Barclays Aggregate Index's yield is nudging closer to 3%. Of course, that has caused some short-term pain for bond prices--nearly every bond category is in the red for the year to date in 2018--but higher yields are a welcome development for income-minded investors. It seems like another century, but as recently as 2007, CD yields were more than 3%, and high-quality intermediate-term bonds were yielding 5% or more.

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