So much is happening in so many places--from
Then again, high-quality bonds, both taxable and tax-free, and high-yielding stocks, including utilities and real estate investment trusts, have begun the year in fine form. There has also been some good news on the energy front: Even as their profits slide because of the collapse in oil prices, energy giants such as
On the fixed-income side, I grant that many bonds are expensive. How could they not be when the benchmark 10-year Treasury bond yields just 1.9%? Yet my fellow Kiplinger's columnist
It's a different story if you're seeking steady income. A 1% yield for 10 years just doesn't cut it. You can get as much in an insured online savings account ().
Happily--and this is my primary message this month--you can do better than a 1% yield without taking extraordinary risks. Naturally, you'll have to go beyond the bank for better cash returns. As always, I strongly advise against tearing up any successful income plan because of transitory news events. A broadly balanced collection of dividend stocks, high-quality bonds, and securities that pass along energy and real estate income is as sensible a strategy today as it was last year.
We offer four worthy holding tanks for your cash--three mutual funds and one exchange-traded fund--listed in descending order of current yield. Each pays you monthly. I suggest putting 25% of your short-term, low-risk money in each.
Vanguard Short-Term Bond ETF (BSV; yield, 0.9%; one-year return, 1.2%) tracks an index of government and corporate bonds with one- to five-year maturities. It pays a hair less than 1%, but on any given day, the yield can climb above 1%. Because it's an ETF, you can get in and out of it during the trading session. Annual expenses are a rock-bottom 0.10%.
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Jeffrey R. Kosnett is a Senior Editor, Kiplinger's Personal Finance magazine.