A low interest rate environment is taking a toll on investors.
Almost half (42%) who name income generation as their primary investment objective are unsatisfied with portfolio returns, finds a new CIBC poll. And only 10% are completely satisfied.
Despite the concern, 54% of income investors in low-yielding products aren’t considering moving funds, with 52% citing “too risky” as the reason.
“Fear is driving the decisions of many investors,” says Steve Geist, president, CIBC Asset Management. “As a result, they have stopped taking an objective look at their investment options and are simply parking their money in low-yielding products – but ones that often guarantee a return that’s less than inflation.”
He adds, “When you combine this extended period of rock-bottom interest rates with the fact that people are living longer after they retire, you reach a point where you need to consider a new investment path.”
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Here are some tips:
- Diversify fixed-income investments. A managed approach that spreads investments across a number of different types of fixed-income assets, such as corporate and global bonds, can yield better results.
- Move up the risk spectrum. You can generate additional yield for your portfolio by moving into high-yield corporate bonds, REITs, or dividend stocks.
- Use specialized expertise. Professional money managers can evaluate risk and identify the most favourable investment opportunities