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How to avoid the pitfalls of annuity, bond, and stock dividend investing for income.
Investing for income is one of the most pursued investment strategies and its a pursuit of more science than art. Understanding and avoiding the six biggest mistakes when investing for income outlined in this guide should help you in maximizing the returns you can safely and reliably achieve. Hopefully, this guide will give you a few new tools in your quest for income.
You will learn
- 6 of the most common mistakes when investing for income
- The downsides of annuities
- Effective ways to estimate dividend yield on stocks
- How to avoid long-term interest rate risk on bonds
Mistake: Buying a Risk Stock for Dividend Income
Dividends cuts tend to not only lead to lower expected income, but also a decline in a share price. To avoid this mistake, choose stocks of companies with rising earnings, or are undervalued.
Mistake: Buying a Bond Impacted by Rising Interest Rates
Bonds with maturity dates far in the future, are vulnerable to rising interest rates. The longer the maturity, and higher the coupon, the greater the risk.
The guide "6 Biggest Mistakes When Investing For Income" was written by Carson Cole, the founder of NUKU, and a professional investor with over 25 years of fixed income experience in bonds. Carson has led investment research groups at two major investment banks and also founded a firm, DebtTraders, that specialized in the trading of high yield bonds. NUKU Asset Inc. is an investment management firm and an SEC-registered Investment Advisor.
