Alternative Income Investments
07/15/2014 9:04 am EST
With rates so low the bond market is no longer attractive for many who need income and Cabot Dividend Investor's Chloe Jensen has some suggestions as to where investors can look.
SPEAKER 1: Hi, I’m here with Chloe Jensen, editor of Cabot Dividend Investor, and we’re going to talk about how today’s ultra low rates are effecting dividend investing and what people need to know and how they can work with that. What do they do?
CHLOE: Well, the main problem is that interest rates are so low today that the bond investments and other fixed income investments that retirees have relied on for a safe place to put their money and safe income are really not yielding even enough to beat inflation, in a lot of cases, and they’re not very safe either, honestly, with the interest rates so low, they can’t really go anywhere but up.
SPEAKER 1: That’s right, so what do people do?
CHLOE: Well, I recommend a lot of alternative income investments, people would call them; although, I really think we should stop thinking of everything as just an alternative to bonds. I think that bonds shouldn’t be the default anymore, so things like dividend paying stocks are great places to have your money. Blue chip stocks are actually very safe, and things like master limited partnerships, real estate investment trusts, those are all very high yielding.
SPEAKER 1: Utilities.
CHLOE: Utilities can be great. I like Con Ed. Other growing utilities that are safe and have a great dividend history.
SPEAKER 1: How do people find out more about it and how do they work this into the portfolio? What do they do?
CHLOE: Well, I recommend that you check out any sort of dividend source and look for stocks with a good history of dividend growth, a good history of no dividend cuts, and for REITs and MLPs, there’s lots of resources online, you can do some research. I recommend all three types of investments and a lot of other things in my newsletter, Cabot Dividend Investor.
SPEAKER 1: Thanks very much Chloe, appreciate it. Thank you for joining us on MoneyShow.com.