This time last year, the Fed was promising four rate hikes over the next twelve months. The “smart money” crowd (via Fed Funds futures prices) was betting on two. And both parties were too aggressive as we saw just one rate hike in 2016.Today we have Yellen & Co promising three hikes in 2017, while the futures markets say just two. Given their track records, I’m inclined to take the “under” on both predictions. But it doesn’t really matter if we see one rate hike or two (or even three) next year. The income investments I like best have already been discounted well in excess of their rate hike risk.
In many cases, you can boost your dividends by 100% to 150% simply by trading in your common shares for the preferred variety. However they are complicated to buy (Series what?), so you may be tempted to take a logical shortcut and purchase an ETF. After all, funds like the iShares S&P U.S. Preferred Stock Index Fund (PFF) and the PowerShares Preferred Portfolio (PGX) pay 6.7% and 6.5% respectively and provide you with one-click diversification.
Source: Investor Place
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