Carl Icahn's company pays a massive 27% dividend yield.
A little more than a year ago, this $14 stock paid double that amount.
It also used to be over $50 a share.
High yields are a lot like Kamala Harris. They present themselves as the solution to all your problems. But ask it one question, and it falls apart like wet paper.
But like Democrats, not all high-yield investments are bad.
In fact, you'd be hard-pressed to build a high-quality retirement portfolio without a significant holding of high-yield assets.
But the key is understanding which high-yield investments will grow your wealth and which ones are ticking time bombs.
After all, there are far better ways to secure consistent, high yields -- and I'm about to show you one we uncovered that yields 11.1% guaranteed for life.
However, to understand what makes this particular investment so attractive, we need to explain the four main reasons why most high-yield investments are problematic. | | | SPONSORED CONTENT Have You Seen This $11 Trillion 'Tech Strip?' While many folks today are wondering what to do with their money… a revolutionary "sheet" of new technology has quietly sparked an $11 trillion tech revolution.
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Click here to see how anyone can profit fast. | | | 1. High Yields Don't Guarantee Growth
A fat dividend check feels amazing. But does it mean your investment is actually growing?
Not necessarily.
There's often a tradeoff between capital appreciation and large dividend payouts.
Take preferred shares, for instance. They typically pay higher dividends than common stocks, making them appealing to income-focused investors.
But here's the catch: preferred shares usually lack the potential for significant price appreciation.
They're like the reliable old car that gets you from point A to point B but never wins any races.
While you're collecting steady dividends, your principal might be stuck in neutral -- or worse, losing value due to inflation.
Imagine pouring a significant portion of your retirement savings into preferred shares. Over time, you receive consistent dividends, but when you look at your portfolio, it hasn't grown.
And then one day, you're hit with a significant unplanned expense, forcing you to draw down on your principal.
Now, you have less money in your account and smaller distributions.
In fact, when you factor in rising living costs, you might actually be falling behind.
High yields without capital gains can leave your retirement fund stagnant, eroding your purchasing power over time.
Instead of settling for stagnation, think about a strategy that delivers high, steady yields with real growth potential.
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Click here now for the full story. | | | 2. Sky-High Yields Can Signal Imminent Trouble
An eye-popping dividend yield, like with Icahn's stock, can be a red flag.
When a company's stock price drops, its dividend yield rises -- sometimes dramatically.
This often happens when the market expects the company to cut its dividend due to financial trouble.
Take General Electric (GE) as an example. A few years back, GE's dividend yield spiked as its stock price plummeted.
Tempted by the high yield, investors bought in, expecting shares to rebound while receiving a healthy quarterly payout.
But soon after, GE slashed its dividend -- not once, but twice. The stock continued to slide, and investors suffered significant losses.
The high yield wasn't a golden opportunity; it was a distress signal.
Before chasing a lofty yield, it's crucial to dig deeper and ask the critical questions: - Is the company struggling?
- Do they pay the dividend from cash flows or borrowed funds?
- Is the dividend sustainable?
If the answers to any of these questions throw up a red flag, you might be stepping into a value trap that could decimate your investment.
Fortunately, there's a way to collect income that's not tied to a shaky stock price or a company's financial woes.
And let's just say, it feels pretty awesome not worrying about dividend cuts and market slides that could wipe out your retirement. | | | Will 'Electionomics' Affect Your Trades? It's election season and some stocks are about to absolutely shock Wall Street.
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See The Forecasts for the Top 3 'Electionomics' Stocks > | | | 3. Not All Yields Are Created Equal: Beware of Tax Traps
High yields can come with hidden strings attached -- especially when it comes to taxes.
Take master limited partnerships (MLPs), for instance.
These companies offer generous yields. But the income they distribute isn't classified as ordinary dividends; it's considered a return of capital.
Here's why that matters: - Tax-Advantaged Accounts Aren't Safe Havens: Holding MLPs in IRAs or 401(k)s can trigger Unrelated Business Taxable Income (UBTI). If your UBTI exceeds $1,000, your retirement account could owe taxes, undermining the benefits of tax deferral.
- Complex Tax Filing: Holding MLPs in a taxable account means dealing with K-1 forms instead of the standard 1099. This adds complexity to your tax return and might require professional help.
With all those tax restrictions, MLPs typically aren't great investments for retirees, though it depends on each individual's situation.
But honestly, wouldn't it be easier to simply enjoy high-yields without all the tax strings attached?
4. Higher Yields Often Mean Higher Risk
There's no free lunch in investing. Higher yields typically come with higher risks.
Junk bonds are a prime example. They offer elevated interest payments to compensate for the increased risk of default. Companies issuing junk bonds are rated below investment grade because they're more likely to face financial trouble.
Today, the default rate on junk bonds is around 4%. A year ago, it was closer to 3%.
During the pandemic, it peaked at around 9%. During the Great Recession, the default rate skyrocketed to almost 15%.
Chasing yields in the junk bond market is like walking a tightrope without a safety net. The potential for higher income isn't always worth the looming risk of capital loss.
Why risk your principal when you can get high, consistent returns from a stable, reliable investment that lets you enjoy the income you want without the stress of market volatility or potential capital losses?
The Path Forward: Secure, Guaranteed Income Without the Pitfalls
So, where does this leave you?
How can you secure the income you need without falling into these traps?
You've seen why high yields don't always mean high returns and how taxes and market fluctuations can eat away at your investments.
How much more secure would your retirement feel if you knew your income wasn't tied to market downturns, tax snags, or dividend cuts?
… An opportunity that provides peace of mind, knowing your income won't fluctuate with market swings and without hidden tax surprises.
We've uncovered a strategy that lets you lock in these benefits with guaranteed, worry-free yields of 11.1%, customized to support your retirement for the long haul.
This strategy allows you to: - Lock in High, Guaranteed Returns: Enjoy annual income yields significantly higher than average dividends, guaranteed for life.
- Eliminate Market Risk: Your income isn't tied to stock market performance or interest rate fluctuations. Even if the market takes a downturn, your income remains steady.
- Simplify Your Finances: No more worrying about stock volatility, dividend cuts, or bond defaults.
- Plan with Confidence: Know exactly how much income you'll receive, allowing you to map out your retirement without guesswork.
- Tailored to Your Needs: This solution can be customized to fit your retirement goals and timeline.
This opportunity won't be available forever, so now's the time to act.
Don't miss your chance to secure this income solution.
With a limited window to take advantage of these exceptional yields, acting within the next 60 days could mean the difference between a stable retirement and one full of financial surprises.
Click here to discover how this smarter strategy can help you achieve the retirement you deserve. | | To Your Wealth,
The Wealth Whisperer Team | | | |
Visit our YouTube Channel - Eagle Investing Network
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