First, the Great Depression was finally becoming faint memory, as was its record of destroying stockholders while handing deflationary gains to fixed-income bonds.
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Some of the products peddled by fund managers, such as split-capital trusts, and now high-income bonds, which guaranteed income but not, alas, the return of the principal, have also been tainted by scandal.
Read Richard Lehmann and pocket 8% yields and big capital gains in fixed-income with bonds, convertibles, preferreds and MLPs.
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Most investors hold a sizable chunk of government debt in their bond portfolios, for safety more than the income the bonds generate.
Things like that could be something as simple as non-traded real estate investment trusts, or secured floating-rate income, as opposed to fixed income or bonds.
Secure your retirement with income from bonds, preferreds and convertibles.
However, income from muni bonds doesn't count as investment income when calculating the surtax.
Click here for instant access to Forbes-Lehmann Income Securities Investor for dozens of fixed-income buys in corporate bonds, MLPs, income trusts preferreds, and convertibles.
The annual income from the bonds, if held, will be taxed higher as ordinary income.
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In a world where Federal Reserve zero-interest-rate policy has made it impossible to earn any real yield the 10-year Treasury rate is well below 2% on standard-issue bonds, the income payout on high yield bonds (the polite term for junk) is proving too hard to resist.
So if trust income is a mixture of dividend, capital gain and tax-free income (from muni bonds or principal), the ordinary income must be used up before the payout can be taxed as gain, and gain must be used before the payout can be tax-free.
The low interest rates are bad for American investors on a fixed income that are dependent on U.S. Treasury bonds for income.
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Currently, 38 states exempt interest on their own municipal bonds from state income tax, but tax revenue on bonds from other states.
For fixed-income investments like bonds and Treasury bills, inflation is of course a huge threat.
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Interest income on these bonds is not taxable, giving them a distinct advantage in the financial marketplace.
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Concentrate on the differential in the income yields between bonds and stocks.
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Generally, it makes sense to own income-generating bonds in tax-deferred accounts.
What this means is that when the income generated by bonds falls, as it has been doing, any pension fund would theoretically have to hold massively more of those bonds to meet the cost of future pension payments.
Bonds, whether they are municipal, government or corporate bonds, can also provide for compounded growth opportunities when the income received from the bonds is reinvested.
Institutional investors can buy bonds for capital gains, but retail investors buy bonds for income.
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Stop buying assets that throw off taxable income, like junk bonds and shares of Verizon.
Second, if you're looking to bonds for income, don't reach for yield.
The ECB said its interest income earned from Greek bonds last year helped boost its 2012 net profit by more than a third.
It won support from its bondholders only when it agreed to ring-fence its London airports and to use their assets and income to back new bonds.
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But, there are other types of bonds and income-oriented investments that can be utilized to diversify a portfolio and mitigate risk that will continue to perform well in this environment.
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Details are sketchy, but the idea is to tax these nonresidents on their income from stocks, bonds, capital gains and dividends if they spend at least 60 days in Minnesota a year.
Obviously, as people get older they grow keener on investments that produce a reliable stream of income (eg, bonds from creditworthy issuers) than on investments that take years to produce capital growth (eg, most shares).
In this scenario, investments that focus on income generation such as bonds tend to do well as the fixed payment streams that are delivered to investors are worth more, while more growth-oriented investments are negatively impacted by slower growth.
Still, with the Federal Reserve buying bonds and pushing down yields on all fixed-income investments, investor appetite for junk bonds may continue unabated even if the opportunity for price appreciation is limited.
The income approach to evaluating real estate is similar to the process for valuing stocks, bonds, or any other income-generating investment.
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