Generating Income Tips 2017 By Prestige Wealth Solutions

The 2008 / 2009 financial crisis resulted in cash rates falling and remaining close to zero, bond rates have collapsed and this has forced those already in retirement to identify alternative methods to generate an income moving forward to manage their annual expenditure year after year.

In 2010, the high quality government bonds being offered provided a reasonable income yield with low risk and therefore were an ideal income solution. But in 2013 these started to fall. This situation is worsening and many of the government bonds are now offering a negative yield as a result.

How to Secure That Necessary Four Percent

Securing the essential four percent needed requires risky investment strategies, the expected risk has doubled to what it was in 2010. The increased risk isn't detrimental yet, which is based on generated income, but is bound to shock investors in the near future.

One of the options that is considered less risky is thirty seven percent cash with sixty three percent in high yielding corporate bonds. This portfolio would have resulted in a capital loss of twenty two percent during the 2008 / 2009 financial crisis.

Investor behavior is having an impact and while higher volatility is associated with higher returns, this isn't always guaranteed to be the case. As you can imagine trying to maintain a long term investment when portfolios weaken is impossible.

It is a fact that losses are felt twice as much as gains and investors panic in advice regarding their lost positions. This tends to result in a more damaging behavior with pensive or high volatility strategies.

Professional Advice

We at PWS believe that clients who are looking at risky investment opportunities seek the guidance and assistance of professional financial advisors who are knowledgeable and experienced in the industry and can direct clients to making the best decisions to meet their unique annual financial needs moving forward.