Income Investors Turn Into Globetrotters

A slow American recovery, along with Europe’s problems and a permeating sense of worry means greater interest in income-building assets. In turn, that means lower yields, and in some cases, a money-losing investment on government bonds. That means raised eyebrows over companies’ ability to shell out steady cash. And that means the S&P 500′s dividend yield is near 2%, about a third of its 10-year average.

These days, it’s as much about Mexican debt as Microsoft’s dividend. That’s how PIMCO’s Curtis Mewbourne sees things. I recently caught up with Mewbourne, to determine where the fixed-income money man expects the greatest returns in this topsy-turvy world. Serving as both a portfolio manager and on PIMCO’s investment committee, Mewbourne possess a fine-tuned outlook. Edited excerpts from our conversation: High-dividend paying stocks are a way for us to think about income. That’s a replacement for a portfolio where traditionally we wouldn’t have thought as much about equities. Now a little bit of equities might be a better way to find income than just traditional fixed-income assets, like bonds.

Source: Forbes

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