- What Is an ESG Bond?
ESG bonds are an investment choice for those seeking to build their portfolios with investments that have a positive impact on the world. ESG investments focus on companies with high environmental, social, and governance standards. A financial advisor could help you create a financial plan for your ESG investment goals. What Is ESG Investing? ESG stands… read more…
- Want Tax-Exempt Income? BlackRock Says This Fund Could Offer You a High Yield
The global investment management company BlackRock says that a sharp sell-off at the beginning of 2022 pushed down the value of municipal bonds and municipal closed-end funds. But now, lower valuations and higher yields could create an opportunity for investors… read more…
- What Are Exempt-Interest Dividends?
Exempt-interest dividends are a class of mutual fund distribution that are not subject to federal income taxes. They’re uncommon, if not relatively rare, and only apply to specific funds that invest in asset categories like qualifying municipal bonds. When analyzing mutual funds or bonds as a potential investment, it’s best to make sure your financial… read more…
- What Are Variable Annuity Subaccounts?
Variable annuities let people to put money into mutual funds, including stock funds, bond funds and money market funds, so the principal has the potential to grow but still enjoy certain tax advantages. Each fund in a variable annuity is called a subaccount. Here’s what you need to know about variable annuity subaccounts, their nature,… read more…
- Reporting C Corporation Dividends to Shareholders
When C corporations pay dividends to shareholders, the transactions get reported to both the shareholder and the Internal Revenue Service using Form 1099-DIV. This form gives the amount of the dividend as well as the classification of the dividend, which is important for determining how it will be taxed. Here’s what you need to know… read more…
- How to Make $1,000 a Month in Dividends
Dividend investing offers a powerful strategy for building wealth and generating passive income over time. By purchasing shares in companies that regularly distribute a portion of their profits to shareholders, investors can create a steady stream of cash flow without selling their underlying assets. This approach appeals to those seeking financial stability and long-term growth,… read more…
- What Is Dividend Recapitalization?
Publicly traded companies sometimes issue quarterly dividends to reward investors. In contrast, private equity firms sometimes issue special dividends. They may do this by raising capital through a dividend recapitalization. There are several reasons a company may pursue a dividend recapitalization,… read more…
- What Is a Guaranteed Investment Certificate (GIC)?
A guaranteed investment certificate (GIC) is a financial product that offers low-risk and a guaranteed rate of return. Don’t confuse it with a guaranteed investment contract, which also uses the same GIC acronym. Guaranteed investment certificates are sold by Canadian banks, credit unions and other financial institutions and can be insured by the Canadian Deposit… read more…
- When Do Savings Bonds Mature?
Savings bonds offer a way to start investing in a particularly low-risk, low-cost fashion — making them the favorite investment vehicle of grandparents and grandchildren everywhere. Savings bonds are easy to buy from the U.S. Treasury and reach maturity after 30 years. The two types of bonds currently being sold, Series EE and Series I,… read more…
- How Stable Value Funds Can Protect Retirement Savings From Volatility
Stable value funds post high yields with relatively low risk, and your retirement plan could already be invested in this asset class. MetLife says that more than eight in 10 defined contribution plan sponsors offer stable value funds as an option to preserve capital, and retirement savers would do well to consider adding this asset… read more…
- Cashing Out a 401(k) After Leaving a Job
The IRS established the 401(k) as a tax-advantaged plan for employees, but in an era when people change jobs far more often than they used to it also has created some confusion. What do you do with this account, that’s supposed to grow over decades, when you change employers? There are a few common options.… read more…
- Understanding How Foreign Bonds Work
The United States is a magnet for investors all over the globe. According to the 10th-anniversary edition of the Venture Capital (VC) & Private Equity (PE) Country Attractiveness Index, the U.S. ranks No. 1 among 125 countries in attractiveness to VC and PE asset class investors. For savvy investors, though, looking outside of the U.S. may… read more…
- What Is Residual Dividend Policy?
A company’s dividend policy determines how dividends are paid out to shareholders. Companies that follow a residual dividend policy use profits to fund operations first, then pay out any remaining or residual amounts to investors. If you’re investing for dividend income, it’s important to understand how payout policies work. A financial advisor may also be… read more…
- Dividend Capture Strategy: How It Works
A dividend capture strategy involves purchasing stocks before their ex-dividend date, then holding onto them just long enough to receive a dividend payout. This approach is also called buying the dividend. Using a dividend capture strategy could be profitable if you’re investing in stocks that pay above-average dividends. But it’s not for beginners and there… read more…
- A Guide to Income Investment Strategies
Maybe you are looking for a way to build a supplemental income stream during your working years, or perhaps, you’re planning for retirement. Whatever your motivation, this is where income investing strategies can help. An income investing strategy revolves around building a portfolio that generates a steady income. With the right strategy, you can up… read more…
- A Guide to Investing in Dividend Index Funds
Dividend index funds are mutual funds or exchange-traded funds (ETFs) that are indexed to dividend stocks. This is different from an index fund that pays dividends to investors, based on the profits realized by its underlying investments. Investing in dividend index funds can offer diversification, income and a potential hedge against inflation. Understanding how these… read more…
- A Guide to Investing in Dividend Mutual Funds
Investors looking for recurring income should consider investments that offer dividends. Dividend investments offer consistent income, an opportunity for asset appreciation and the potential for favorable tax treatment. Dividend mutual funds invest in stocks that pay investors regular dividends. Let’s break down what they are and how to invest in them. A financial advisor could help… read more…
- Understanding How Fixed-Income ETFs Work
Many investors use fixed-income investments to balance risk and provide regular income. Some investors choose individual bonds, while others invest in bond mutual funds. A fixed-income ETF is another option that invests in a diversified pool of bonds at a… read more…
- How Callable Bonds Work
Bonds are fixed-income investments that can provide some diversification and stability to your investment portfolio. That’s because they are fairly low-risk due to their inherent backing of the government, a corporation or another official entity. More specifically, a callable bond is a bond that allows the issuer to redeem it before it reaches maturity. Callable… read more…
- Understanding How Special Dividends Work
Corporations that pay dividends to stockholders usually make the payouts on a regular schedule, such as annually or quarterly. However, they sometimes opt for special dividends. These non-recurring cash dividends are usually much larger than the regular recurring dividends. Companies may use them to reward loyal shareholders when profits are unusually good, to distribute proceeds… read more…
- What Are Discount Bonds?
Investors often purchase bonds for recurring income and as a hedge against stock market volatility. Most bonds are initially sold “at par,” which means that they’re sold at face value. After the original sale, the value of bonds fluctuates based on interest rates, the credit rating of the issuer and economic trends that affect interest… read more…
- What Are Treasury STRIPS? – Investment Guide
Treasury STRIPS, or Separate Trading of Registered Interest and Principal of Securities, are specialized U.S. government-backed investments designed for long-term financial planning. These securities are created by stripping the interest coupons from Treasury bonds, allowing investors to purchase them at a significant discount and redeem them for full face value upon maturity. Known for their… read more…
- How Do Green Bonds Work?
Green bonds may appeal to investors who want to make a positive impact with their portfolios. These bonds are issued for the purpose of funding projects that support sustainability. The first green bond was issued in 2007 by the European Investment Bank, followed by the World Bank Green Bond in 2008. Since then, the market… read more…
- Investor’s Guide to Debt Securities
During a bull market, investors flock to equity securities to try to earn the highest possible returns. But, the risk inherent in equity securities remains. To reduce risk and achieve diversification, an investment portfolio needs to contain a variety of types of securities. Debt securities add some much-needed diversification to a balanced portfolio. They also… read more…
- Dividend Rate vs. Dividend Yield: What They Tell Investors
Investing in dividend-paying stocks can be an attractive option for those seeking steady income. With a wide range of dividend stocks available, making informed financial decisions requires a solid understanding of how these investments work. Key concepts to grasp include the dividend rate — often simply called a dividend — and the dividend yield. Understanding… read more…