In an era of uncertainty, investors are looking for options to have steady streams of income in different avenues. They aren’t just looking at bonds, they are looking at other options to satisfy their fixed income thirst. A few of these areas of bond alternatives might be familiar while others are a bit more exotic. Max Salk and his peers are certainly looking at different options to minimize risk and maximize performance.
A regular one that individuals may want to take a look at would be a certificate of deposits. Certificate of deposits in this day and era will provide individuals with about 2.70% to 3.10% APY and will require a potential lock-up period that ranges from one year to five years. A few institutions will not require a minimum deposit while others will ask for a $500 minimum deposit.
These institutions vary from Citibank to Goldman Sachs and others.
While these certificate of deposits offer security for a fixed period of time, their interest rates are still relatively low and barely exceed the risk-free rate, where the risk-free rate is at 2.42 for 1 Month and 2.89% for the 30 years. Certificate of Deposits allow for little to no risk and provide similar returns with a bit more upside to investors.
Investors can turn to dividend yielding stocks which may provide yields in excess of 5% but then they would have to account for the risk that they are taking with the underlying equity and the potential that their initial capital might decrease because of the swings in the stock market.
Max Salk is certain to look at all of these situations and weight differences as he learns what these investments can provide to investors like him who work for prominent institutions such as Blackstone Group. Max Salk may look at structured notes, fixed instruments that may provide more options in regard to safety and yields.
Max Salk is looking forward to understanding how these markets will operate while he discusses different strategies with his peers, advisors, and other professionals within the finance field.
These are certainly interesting times and the next few years should be one’s to watch.