Displaying items by tag: income

(New York)

The press has a complicated relationship with annuities. On the one hand, some investors love them and the relative predictability they offer, while on the other, there are loads of stories of abuse. That said, they still have utility for investors, and with that in mind, here is a list of some of the best across six different categories. For immediate income, Minnesota Life has some well rated products with good payouts. Penn Mutual Life and Lincoln National Life also have strong offerings. For deferred income annuities there are some other providers to check out, including Symetra Life, CUNA Mutual, Principal Financial, and Guardian Life.

FINSUM: Guaranteed income at certain life thresholds is a valuable proposition for clients, it is the irresponsible way in which they have sometimes been sold that raises issues. This article lists some good candidates.

(New York)

Markets have moved so fast that investors are now once again braced with the question that plagued them for almost a decade—how to get some income in a low yield world. Ten-year Treasuries are now yielding a very weak 2.36%, way down from the 3.2% they reached in 2018. That means investors need a place to park money. High yield savings accounts are still looking like a strong option, while a plethora of dividend funds and dividend stocks now look much more appealing than just a couple of months ago. Yield-sensitive sectors like REITs and utilities also have good outlooks.

FINSUM: The good news for investors is that short-term yields are still high, so it is not nearly as hard to get good yielding, low duration, investments as it was a few years ago.

(New York)

Midcaps are perhaps the least loved of the market cap grouping. Small caps get a lot of attention, as do large and megacaps, but midcaps are a bit “neither here nor there”. That said, they offer some compelling opportunities, and today we will highlight some of those on the dividend front. Midcaps are generally good dividend payers, with 275 of the S&P MidCap 400 paying dividends. Five stocks to look at include: SABER (SABR), Manpower Group (MAN), Webster Financial (WBS), National Instruments (NATI), and j2Global (JCOM). All the shares pay 2% or more in dividend yield.

FINSUM: Megacaps seem to get the least love because they comprise some of the less exciting companies in the market and at first glance don’t seem to have the growth potential of small caps, or the momentum potential of large caps.

(New York)

One of the interesting aspects of the market this year is that the sectors that are doing best are not the ones an investor would naturally expect. For instance, the sector which is blowing away the S&P 500 is utilities. The stocks have been doing so well, they are showing up in momentum oriented funds, which is a rarity. The sector is known for its solidity and stable returns, but right now utilities are hot. Over the last twelve months, utilities have returned 21.2% versus the S&P 500’s 7.3%.

FINSUM: You don’t usually think of utilities getting hot, but because rates are falling at the same time as real estate weakening, utilities are taking a lot of capital that is usually split with REITs.

(New York)

Right now might not seem like the most important time to buy rate-hedged or short duration funds. The Fed is supposed to be on “pause” after all. However, in our view, now might be a critical time to have some rate hedged assets in the portfolio. The reason why is that yields have pulled back strongly from just a couple of months ago, including yesterday, but given the fact that it is almost purely the Fed which has caused the sharp reversal, rates could swing just as wildly higher if their comments, or economic data, changes. In other words, the bond market looks overbought right now because of Fed comments, but it could easily snap back to where it was in December in violent fashion.

FINSUM: We think this is a time for caution on rates and yields given how strongly the market has reversed over the last couple of months.