Seeking Alpha

The Asset Allocator: Thoughts On The Quest For Yield (Podcast)

by: SA For FAs
Summary

The quest for income is becoming as salient a concern as it was during the financial crisis of a decade ago.

Much of the market commentary is focused on options that ratchet up risk quite a bit, like high-yield corporate bonds.

Could we perhaps glean lessons by the example of highly sophisticated investors who are also income dependent?

To offer a lay of the risk landscape, I note two possibilities – one low-risk, the other high risk – each with its limitations.

I conclude with two other ideas that definitely boost income, but which require great effort.

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The quest for income is becoming as salient a concern as it was during the financial crisis of a decade ago.

This podcast (5:43) looks at the example of highly sophisticated income-dependent investors – insurance companies – and finds no magical solutions to the quest for yield. We lay out approaches on two sides of the risk spectrum, and find that you must risk something to obtain a yield. There are, however, two other solutions that are sure to boost yield, if the client is willing to do the heavy lifting.