I am a personal fan of dividends, whether they come from stock or bonds. They still represent an alternative cash flow that I would normally posses if I invested in a normal stock. The issue with dividends is that they are directly related to two factors that forces theses dividend to be very low at this time. Bond yields are in proportion to the interest rate which is at a very low level. Stocks are the second factor. We are in a recession and most companies do not have sufficient fund to pay a dividend that is above 5%. Don’t get me wrong there are still options that will pay a high dividend from bonds. The risk factors on the other hand out weigh the rewards you may receive from them.

In order to receive the dividend yields that you are all accustom to, greater than 5%, an investor should look into income trusts or Master limited Partnerships. Many of these entities are still able to provide high yields due to their nature. They are not the companies themselves; they are entities that hold income producing assets. These assets may be anything from oil to wood and even real estate in case of MLP. (DO YOUR RESEARCH) What does that mean in normal language? All it means is that these entities are the ones that invest in things that produce a profit. This profit is not held by them, it is distributed to the holders (YOU). Is there risk? of course! The location from where the resource is optioned can be depleted or any number of other things. Even those types of operations are beautiful especial in the energy sector. The higher the price of oil the more they can sell it for. Pipelines (MLP) are a favored choice, people will always need gas. Producers of this commodity pay the entities a fee to use it, so there won’t be a depletion of resources. Income trusts and MLP’s are publicly traded funds that are readily available. Please don’t forget to do your research. Don’t forget to keep in mind that that past performance does not dictate future performance. Good luck and happy profits.