With interest rates in this country showing no signs of moving higher any time soon, investors continue to search the stock markets for investments that offer decent cash flow at a reasonable risk.
Finding yield isn’t difficult. It’s the risk part of that equation that often trips up investors.
Consider the energy sector. Two years ago, there were many companies that were paying dividends of 5 per cent and more. Most looked solid and secure, and they were – as long as the price of oil stayed above $100 (U.S.) a barrel. When the bottom fell out, the revenue these companies depended on to pay off investors fell dramatically. Most energy companies were forced to cut or even eliminate their payouts. Share prices fell across the board. What appeared to be a safe source of cash flow suddenly turned sour.Report Typo/Error
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