Cash is king, particularly in periods when the stock market is on the decline. But even in times of stock market prosperity, lots of investors look for yield out of their investments. It becomes even more important the closer you get to retirement. After all, generating income and at the same time protecting what you already saved is a top goal during your golden years.

While chasing yield can be a dangerous game for investors, there are ways to boost the amount of income your investments throw off without compromising your risk tolerance or your nest egg.

From shifting your bond strategy to shorter term investments to investing in dividend paying stocks, here’s three ways to get more yield out of your investments. (For related reading, see: Finding the Best Yields.)

Dividend Paying Stocks Can Provide Yield

A sound financial plan gives investors exposure to different investments and asset classes, and should at least include stocks and bonds. It can also encompass alternative investments like real estate. Within those segments there are opportunities for investors to boost the amount of yield they generate.

Take stocks for starters. Investors looking for yield have a few ways to achieve that. One of the most popular ways is to invest in dividend paying stocks. Companies that pay dividends reward their stockholders by making cash payments, usually quarterly or annually. Typically, blue chip companies pay dividends to their shareholders and while the yield isn’t huge, it does provide investors with a low-risk way to get income from their investments.

But the old stalwarts aren’t the only companies paying dividends. There are also growth companies that reward their shareholders—often with a high yield payout. However, it does comes at a price. The higher the yield, the more risky the investments often are. (For more, see: Introduction to Dividends: Investing in Dividend Stocks.)

Investors who want to get more yield from their investments can shift some of their stock portfolio toward dividend paying stocks, being mindful that they aren’t overexposed in one area of the stock market. If you don’t want to own individual stocks, purchase one of the multitude of mutual funds that invest in dividend paying stocks for you.

Preferred stocks are similar to common stocks, but unlike common stocks they pay investors a dividend. Preferred stocks are appealing to investors because of their bond-like qualities. Investors get a regular dividend and a stock whose price is stable and doesn’t change. In a rising interest rate environment, a preferred stock is going to get hit, which is why sticking with short-term fixed income investments is a way to protect yourself if the Federal Reserve continues to raise interest rates. (For more, see: The Impact of the Fed Interest Rate Hike.)

Get Riskier With Your Bonds

Bonds are going to be a part of most investment plans, particularly for investors nearing retirement. They are attractive because they generate income and provide a safe, low-risk way to get income. Sure, you aren’t going to get rich with the yield on bonds these days, but there are ways to enhance your strategy to increase the income the bond investments generate.

Take your holdings for example. If you find yourself with a portfolio of ultra-safe government bonds then consider shifting some of your dollars to riskier things like corporate bonds and even high-yield ones. No one is saying pour all your money in high yielding junk bonds and cross your fingers, but increasing your risk tolerance, even incrementally, can increase the amount of yield you get. It's also wise to keep your eye on fees because they can easily eat away at your returns.

REITs Can Diversify, Generate Yield

Diversification is the best way to protect your nest egg and that means going beyond just stocks and bonds. For investors who want both diversification and more yield, real estate can be the answer. Real estate investment trusts, or REITS, are publicly traded companies that invest in real estate and are required to distribute 90% of their earnings to their shareholders in the form of dividend payments. They are also attractive because they don’t trade in lockstep with stocks and bonds, so when the markets are tanking REITS can often be a safe haven. 

When it comes to investing in REITs investors can either buy shares of individual REIT companies or purchase an REIT fund. But just like with any other investment that generates income, investors have to be aware of their tax exposure and if possible keep their income-generating investments in tax advantage investment vehicles like a 401(K). (For more, see: How to Analyze Real Estate Investment Trusts.)

The Bottom Line

Generating income out of your investments isn’t that easy to do in a low interest rate environment, but there are still ways investors can achieve more yield. Investing in dividend paying stocks, considering putting some money into a REIT or REIT fund, or shifting your bond strategy to include corporate and even high-yield bonds—all the while paying close attention to fees—can go a long way in increasing your yield.

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