Displaying items by tag: income investing

After bottoming in April, the stock market has staged an impressive rebound, but Stifel strategist Barry Bannister warns the rally may not last due to stretched valuations. He predicts the S&P 500 could fall as much as 15% to 5,500 but advises investors to stay in the market with a more defensive stance. 

Bannister highlights high-yield dividend stocks as a classic hedge, offering steady income and stability in uncertain conditions. Ellington Financial stands out with an 11.5% yield supported by strong earnings and diversified mortgage-backed investments. 

Meanwhile, Dorian LPG, a global liquefied petroleum gas carrier, offers an 8% yield with analyst support despite recent earnings volatility. 

Finsum: Dividend stocks exemplify how income-focused strategies can help investors weather potential downturns while still capturing meaningful returns.

Corebridge Financial has launched Power Select AICO℠, a new index annuity developed in partnership with Market Synergy Group, featuring a unique Additional Interest Credit Overlay (AICO) that can boost earnings by up to 200%. The product offers exposure to major indices like the S&P 500® and Nasdaq-100®, along with fixed interest options, while providing 100% downside protection against market losses. 

Unlike traditional index annuities, the overlay allows for enhanced accumulation during weak markets, though it comes with a 0.80% annual fee and a cap on the maximum overlay benefit. 

Executives say the design helps investors diversify and accumulate assets regardless of market conditions, while still offering protection during downturns. The contract guarantees are backed by American General Life Insurance Company, a Corebridge subsidiary, though withdrawals may carry tax implications and early withdrawal penalties. 

Finsum: With its combination of growth potential, protection, and innovative crediting structure, index annuities are perfect for retirement savers seeking balance between safety and upside.

As of June 2025, the Federal Reserve has maintained its key interest rate, creating a rare window for investors to take advantage of elevated yields at the short end of the bond curve. 

With short-term yields currently exceeding those of intermediate maturities, ultrashort bond funds have emerged as an efficient way to earn income without assuming significant duration risk. These funds, which typically hold maturities under one year, offer a balance of liquidity, low volatility, and competitive returns. Among the top active strategies is Pimco’s Short-Term fund, which combines nimble credit allocation with disciplined risk management, avoiding complex securities and leaning on deep market expertise. 

For investors seeking tax-efficient income, Vanguard’s Ultra Short-Term Tax-Exempt fund delivers high-quality municipal bond exposure with an ultrashort duration, making it a smart pick in rising rate environments. 

Finsum: These strategies give investors a way to capture attractive yields while staying agile amid ongoing rate uncertainty.

Total annuity sales reached a record $432.4 billion in 2024, marking a 12% increase from the previous year and the third consecutive year of growth. Despite strong overall performance, declining interest rates in late 2024 led to a 13% drop in fixed-rate deferred and income annuities, as investors shifted toward products with higher growth potential. 

Traditional variable annuities saw their first annual increase in three years, rising 19% to $61.2 billion, fueled by strong equity markets and product innovation. Experts anticipate continued strength in annuity sales for 2025, and variable annuities could have another positive year’s annuities. 

LIMRA attributes this sustained demand to growing consumer interest in investment protection and guaranteed retirement income. Final industry rankings for 2024 will be released in March after earnings reports are completed.

Finsum: This could be the play for income investors worried about rising rates but need some upside exposure in 2025. 

(New York)

“Cheap dividend” is a welcome phrase for many advisors. Income investments are precious, especially as clients age, but inexpensive and good-performing dividend funds are not quite as easy to find as one might expect. With that in mind, here are few names to consider: the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD), the Oppenheimer S&P Ultra Dividend Revenue ETF (RDIV), and the Wisdom Tree US Quality Dividend Growth ETF (DGRW). The first two average just under 4% yields and have fees well under 40 bp. The Wisdomtree fund seeks dividend growth names, has lower yields, and costs 28 bp.

FINSUM: We are fans of the high dividend and low volatility approach, so quite like the Invesco fund here. LeggMason also has another good option with that theme, LVHD.