As an investment analyst, I often have friends and relatives asking the same question: Is there someplace I can earn a safe, secure but decent yield these days?

I’m gratified to be able to answer promptly.


[ad#Google Adsense 336×280-IA]The Fed’s zero-interest rate policy has rewarded investors at the expense of savers.

But some ultra-safe vehicles yield much more than others.

And for those willing to stick their necks out a little bit, there are some attractive total-return opportunities out there with a decent yield attached.

At The Oxford Club’s Private Wealth Seminar in Beaver Creek, Colorado, last week, I detailed 17 of them. Here are a few.

According to, the highest post-intro money market rate in the country is offered by MySavingsDirect: 1.25%.

That’s not terribly exciting, I know. However, many money markets around the country are yielding less than a tenth as much. If you have your money sitting on the sidelines, you might as well earn what you can.

There are also several institutions offering one-year CD rates of 1.25%. And EverBank currently offers the nation’s highest rate on a five-year jumbo CD: 2.31%.

EverBank is a name you can trust. After all, how many online banks have an NFL stadium with a swimming pool named after them? (For an important verification, click here.)

With the Fed itching to take short-term rates up a notch, I wouldn’t go too far out on the yield curve right now. But you can earn a 2.34% yield on 10-year Treasurys, 2.77% on 20-year Treasurys and 3.1% on the 30-year guy.

Your next step up is short-term corporate bonds. The yield is currently 1.85% on the Vanguard Short-Term Corporate Bond Fund (Nasdaq: VCSH) – which is largely immune to rising rates – or 2.73% in the Vanguard Intermediate-Term Corporate Bond Fund (NYSE: BIV).

In the buttoned-down world of bond funds, low expenses generally reign. And Vanguard is the king in this department.

Junk bonds expose you to credit risk, but yields are considerably higher here. The iShares High-Yield Corporate Bond ETF (NYSE: HYG), for instance, yields 5.46%.

Surprisingly, emerging market bonds yield less. The iShares Emerging Markets Bond ETF (NYSE: EMB) currently pays 4.42%. However, most of its holding are government guaranteed and dollar denominated, so you won’t have much in the way of daily currency fluctuations.

If you feel as I do that rates will begin to normalize over the next couple years, it wouldn’t be a bad idea to plunk some money in a prime rate fund.

These funds invest in senior, fully secured bank loans to corporations that are tied to the prime rate. The advantage here is they let you capture higher rates immediately. The iShares Floating Rate ETF currently yields 4.42%. (I’ll warn you, however, that these funds can turn volatile if the economy goes south.)

If you’re in a high tax bracket, be sure to own munis. The SPDR Barclays Municipal Bond ETF (NYSE: TFI) currently yields 2.4%. It may not sound like much, but if you’re in the top tax bracket that is equivalent to a 4% taxable yield.

Convertible bonds are another good choice, but most investors don’t own them because they don’t understand them. These are corporate bonds that can, under preset terms, be converted into the common stock of the issuer.

They yield less than other corporate bonds because of the conversion feature, but they are safer than equities since the yield supports the price if the stock goes down. A good choice here is the SPDR Convertible Bond ETF (NYSE: CWB) with a current yield of 4.35%.

Here’s another higher-yielding investment that most investors don’t own: preferred shares. A preferred stock is one that has a higher claim on the assets of a corporation in the event of a liquidation. It also has a dividend that must be paid out before dividends to common stockholders. (However, these shares do not have voting rights.)

The best selection here is the iShares US Preferred Stock ETF (NYSE: PFF) with a current yield of 6.14%. No other preferred stock ETF has its size or low expense ratio, so this is the obvious choice in this category.

To earn a higher yield than this in publicly traded investments you have to venture into riskier areas, like real estate investment trusts (REITS), common stocks or master limited partnerships.

I’m not saying some of these aren’t good investments – they are – but you would be ratcheting up the volatility.

The yields on these safer investments won’t get your mouth watering. But if you feel stupid holding low-yielding investments right now, consider something important.

You will have plenty of cash to put to work in the next market downturn. And history demonstrates that bear markets make foolish cash investments suddenly appear brilliant.

Good investing,



Source: Investment U