Investors who are nearing retirement, in retirement, or those just planning for retirement, often consider ways in which one will be able to supplement one’s pension or other sources of retirement income with fixed income solutions.
With bonds now offering extremely low yields, fixed income options in the bond market have largely gone out of favour for many retirees or soon-to-be retirees today.
With that in mind, equity markets and other non-core markets such as real estate are really the primary places aging investors should look for income in the near to mid term. With many housing markets now showing bubble-like characteristics, jumping into a large real estate purchase and piling on a bunch of debt before retirement may not be the best choice.
I would direct investors looking for fixed income exposure, therefore, to the high yield equity markets, and in particular to do some homework on which exchange traded funds (ETFs) serve the needs of a given portfolio the best- there are simply too many to name here.
Picking an ETF for fixed income exposure is probably the way to go for those heading into retirement, as these funds have extremely low management-expense ratios (MERs) and are fully diversified, taking away the need to pick stocks.
Some ETFs have pretty decent yields right now, for those looking to make a quick buck in the near term. Personally, I prefer to focus on ETFs that have dividend growth as a primary metric, as I view growth in dividend distributions as more important, generally speaking, than the yield offered by a given company on a given day.
Invest wisely, my friends.
