More people are retiring from the workforce than at any time during our nation’s history. As such, this group—the baby boomers—need income, so they look to their dividends, but finding significant yield from their investments is a challenge.
The significance of significance of impact dividends on returns while helping retirees meet their financial objectives cannot be overstated. Yet, now, with a record number of people approaching their retirement years, both the yields of dividends of the S&P 500 and of Treasury Bonds have reached levels many investors consider unsatisfactory.
Meanwhile, the demand for dividend income continues to rise, resulting in higher valuations over the long-term for those businesses that pay dividends.
In the quest for higher dividend yields, many investors are beginning to look beyond the U.S. into global markets. Some investment opportunities in both developed and emerging market nations are producing dividend yields in excess of 3%. Did you know that going back to 2001, dividends have equated to more than 50% of average annual total returns in developed markets?
But those are just stocks. What about global bonds? They can also perform a significant role in your overall portfolio? An increase in the flow of global capital has given rise to a vast selection of fixed income investments. A carefully planned investment strategy that includes global bonds can afford those nearing retirement the chance to invest in these expanding opportunities.
In summary, the growth of international securities paying dividends, together with the expanding selection of global bonds offers investors potential income benefits when included in a carefully constructed portfolio.