Weekly Wrap: Crypto in Retirement, Lessons From Buffett, and the Ultimate Stock-Pickers' Index

Editor's note: Read the latest on how the coronavirus is rattling the markets and what investors can do to navigate it.

There’s a simple way to make sure an article gets read or a video gets watched on Morningstar.com: Put “dividend” or “income” in the headline.

That’s not surprising, really. For the better part of a decade, income has been elusive. The 10-year Treasury bond yields half what it did a decade ago. The dividend yield on the S&P 500 has been down over the past decade, too. Today’s yield-deprived investors are trying to squeeze income from their portfolios like one more brushful of toothpaste from a flattened tube. No wonder they’re looking for some guidance.

Indeed, solving the income conundrum requires trade-offs. Some argue that going further out on the risk spectrum is a must for today’s yield-seeker: In fact, the CIO of Franklin Templeton’s fixed-income team, Sonal Desai, suggested in a recent episode of The Long View podcast that high-yield and emerging-markets bonds should no longer be viewed as fringe investments in today’s income-tight climate.

Other professionals, including those who participated in a roundtable conversation with our own John Rekenthaler, suggest a significant rethinking of income-centric approaches entirely. In fact, participant and retirement researcher Michael Finke says that investors who focus excessively on income are just setting themselves up for disappointment. In our updated Guide to Income Investing, we take a look at the traditional bread-and-butter investments of yield-seekers: dividend-paying stocks and bonds. But we go beyond those investments. We talk about other ways to generate cash flow from a portfolio and how annuities can fit in the retirement-income puzzle.

Flimsy yields are likely here to stay, at least for a while longer. It’s time to adapt.

--Susan Dziubinski

Editor's Picks

Meet the Winners of the 2021 Investing Excellence Awards The winners represent the best of the asset-management industry. How to Build a Portfolio You Don't Have to Babysit Take these steps to become more of a hands-off investor. Top 10 Holdings of Our Ultimate Stock-Pickers' Index Large-cap strategies continue to underperform the market through 2020. Who Wants Cryptocurrency in Their Retirement Plan? Most people remain hesitant, but there's a small crypto-curious contingent. The Next Generation of Fund Investing Where the industry is headed. 3 Things Investors Can Learn From Warren Buffett Whether you're new to the market or not, there's a lot to learn from Berkshire Hathaway's leader.

Portfolio Planning and Personal Finance With Christine Benz

Retirees: If You Love Income, You Should Love Cash Flow Even More You diversify your investments; why wouldn't you diversify how you source your in-retirement living expenses? For Inflation Protection, Commodities Belong in the 'Too Hard' Pile On the pitfalls of defending against the slow, corrosive effects of inflation with an incredibly volatile asset.

Mutual Funds and Exchange-Traded Funds

Are You Overpaying for Your Sector Fund? Specialized sector funds can mean higher fees for investors. 8 of Our Favorite Little Funds Here are some under-the-radar gems. 3 Funds for Emerging-Markets Bond Exposure Amid a mixed start to 2021, here are three compelling options for a stake in the sector. There Are Many Ways to be a Value Investor Value investing's strong long-term track record makes a compelling argument in favor of cheap over expensive. Vanguard Is Adapting to Stiff Competition Advice, high-conviction active, and private equity are three big initiatives. Your Index Fund Is Changing Its Target Index. Now What? Two Vanguard funds recently changed their benchmarks. Ben Johnson lays out what such events mean for fundholders.

Stocks

Can Rivals Catch DoorDash? As its network effect strengthens, we think the company can maintain its lead. 10 Promising Stocks to Consider These companies are growing their competitive advantages--and their stocks are undervalued. 3 Favorite Stocks of Top Managers These names dominate the portfolios of our Ultimate Stock-Pickers. Dividend Stocks Are Back, Fixed Income Not So Much The value rotation has given new life to laggard equity-income strategies. 2 New Stocks to Watch Morningstar has recently initiated coverage of DoorDash and SoFi.

Stock Analyst Updates

The U.S. Housing Shortage Not as Bad as Some Fear We think some estimates of the housing shortage are too severe.

Rekenthaler Report

The Hidden Assumptions of Financial Calculators Don't ignore the program's defaults. Advisor Insights The Tool Kit for Sponsoring Black Female Advisors Having a mentor is good, but a sponsor can champion your career.

The Long View Podcast

Jack Brennan: Price Pressure in the Advice Business Is 'Inevitable' The author and former Vanguard CEO discusses the current investment landscape, his thoughts on ESG and ETFs, and the outlook for retirement planning.

The Short Answer

What Are TIPS, and How Do They Help Protect Against Inflation? A quick look at the benefits and risks of Treasury Inflation-Protected Securities, and the best way to invest in them. Policy What If Biden's Capital Gains Tax Is Retroactive? The proposal's fine print suggests the effective date could already be in the past.

Commentary

Amid Economic Recovery, How Stable Is the Bond Market? Franklin Templeton's Sonal Desai discusses the durability of economic recovery and the value of holding bonds.

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