As they say, you shouldn’t “Fight the Fed.” Income seekers know this old adage all too well. During the recession, many traditional sources of income – bonds, CDs and money market funds – dried up as the Federal Reserve cut interest rates to spur growth in the economy. In order to not fight the Fed, this meant finding higher yields and income in other sectors. Real estate investment trusts (REITs), master limited partnerships (MLPs), utility stocks and even closed-end funds were on the menu and became staples of many portfolios.
That strategy worked well for roughly a decade. Investors feasted on these high-yielding security types until recently when the Fed began to raise rates.
However, they may get to feast on high-yielding stocks once more. With the Fed pausing rate hikes, high-yielding stocks are once again attractive for income seekers.
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