Adding income-producing assets to portfolios can provide steady cash flow and mitigate equity market volatility. Dan Tolomay, chief investment officer at Trust Company of the South, recently discussed the importance of these assets with U.S. News & World Report. He explains that rising interest rates have allowed investors to reduce equity exposure in favor of income-generating assets, thereby lowering portfolio volatility.
Bonds offer stable income and lower risk than stocks. Investors can choose between individual bonds or bond ETFs.
Dividend-paying stocks, issued by financially stable companies, are less volatile than growth stocks. These stocks allow investors to reinvest dividends to purchase additional shares.
Master limited partnerships (MLPs) in the energy sector offer high yields.
Real estate investment trusts (REITs) offer high dividend yields and portfolio diversification. REITs are a great way to invest in real estate without owning property, and, in the multifamily sector, are currently promising due to limited new construction.
Annuities provide a steady income stream, making them suitable for retirement. Lower-cost fixed annuities offer guaranteed lifetime income.
Click here to read the entire U.S. News article. And, if you have any questions about income-producing investments and how to incorporate them into your portfolio, please get in touch with our team.
