In search of yield

It’s interesting to observe the change in the investment landscape.  With reduced interest rates, the desire for higher yielding shares has increased.  Share prices for banks have increased and, as a result, the yield on these stocks has fallen.  Other stocks that have not enjoyed capital growth to the same extent have become more attractive from a yield perspective.   With the decline in value in the resources sector, some traditionally lower yield mining stocks such as BHP today has a projected yield of 5.43% fully franked. This is not to say that anyone should go out and buy BHP (or any other mining stock).  It is possible that the projected yield may not be sustainable.  Diversity in a portfolio is the biggest protection we can have to any changes in the investment landscape.  It is important to have diversity across asset classes i.e. Australian shares, International shares, property, infrastructure, alternative assets, fixed income and cash.

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