INVESTING Earn Up to 9% on Your Money

Yields on many fixed-income investments have plunged, but turmoil in the bond market has created new opportunities.

- ANDREW TANZER

IN ADDITION TO TAKING A VAST HUMAN TOLL, the coronavirus pandemic has mercilessly infected virtually every corner of the investment world. As markets plunged and seized up, the Federal Reserve dropped its short-term interest rate to zero and began injecting trillions of dollars into the financial system to shore up credit markets and keep money flowing to beleaguered companies, households and local governments. Yields on 10- and 30-year Treasuries plummeted to record lows, and yields briefly turned negative on some short-term T-bills. // In a dash for cash, even safe assets such as municipal bonds and high-grade corporate issues tumbled in value. Sellers who needed to raise cash—mutual fund managers facing fund redemptions, investors who suddenly needed funds to meet margin calls, heavily indebted hedge funds forced to unwind positions—sold assets willy-nilly, without regard to valuation, zeroing in on the investments that were liquid and easily disposed of.

And therein lies an opportunity for income-starved investors, who can now find yields on assets such as high-quality stocks, real estate investment trusts and high-yield bonds that were unavailable in recent years. Use this guide to help you navigate through this new landscape.

Note that, compared with previous years, we have dropped two investment categories: foreign bonds and master limited partnerships. Given currency risks, investors are not compensated with high-enough returns in international bonds (yields on many foreign sovereign bonds are negative). As for MLPs, lower corporate tax rates, thanks to recent changes in the tax code, have made the MLP structure less compelling for investors. And the fortunes of many are tied to the battered energy sector.