Irish financial system

Short-term risks to the Irish financial system remain high. The international financial environment has experienced tighter credit, rising forbearance, capital flight from some vulnerable euro area countries and, especially for these countries, a diminishing pool of unencumbered assets to draw from for collateralised borrowing. Monetary policy has been eased aggressively by many central banks and unconventional policies are being pursued. This has...

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Why Investors Should Skip Top Dividend-Yielders

Income investing used to be easy. A retiree who plunked $1 million into 10-year Treasury notes during the past half century locked in, on average, a yearly income of around $67,000. But with interest rates at record lows, that same investment recently paid less than $15,000 a year. Some investors are looking to stocks with high dividend yields to recoup this lost income. Standard & Poor's 500-stock index yields 2.2 percent, but its top 50 stocks, by dividend, yield an average of 5.5 percent. That's enough to turn that $1 million...

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Time to Buy Into Real Estate?

To most people, U.S. real estate still stinks. More than a third of all mortgages are under water, with their holders owing more than their houses are worth. Home prices continue to fall in many areas of the country, and thousands of foreclosed homes are still waiting to be sold. Yet an investor no less than Warren Buffett recently said that if he could, he would buy up a couple of hundred thousand single-family homes. To Buffett and others with short memories or long time horizons, the investment opportunity created by the housing bust...

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The income illusion

With interest rates at all-time lows, investors are desperate for yield. But focusing only on income can often lead to a bad outcome. Investors have a lot to worry about these days but if you’re trying to live off the proceeds of your portfolio, one concern trumps all others: low interest rates. As of mid-August, 10-year Government of Canada bonds were paying about 1.8%, not even enough to outpace inflation. “I feel for people,” says Alan...

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