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In his 2016 letter to Berkshire Hathaway shareholders, legendary investor Warren Buffett wrote, “Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons.”
The dark clouds so far this decade have been inflation and the resulting high interest rates. The gold raining down has come in the form of cash returns through high-yield investments like dividend stocks and private credit.
Capturing High Yield From Dividend Stocks
Higher interest rates push down the prices of dividend-paying stocks, resulting in a higher yield. If dividend payouts remain consistent or continue growing, investors can essentially “lock in” these higher yields and benefit from price growth when rates come back down.
One high-yield dividend stock that has the potential to provide long-term passive income in addition to price growth is AT&T Inc. (NYSE:T). The company pays a quarterly dividend of $0.2775 per share, which comes out to an annual yield of 6.38%
The three most recent analyst ratings were released from Barclays, Scotiabank and RBC Capital on April 29, 2024, April 25, 2024, and April 11, 2024, respectively, with an average price target of $19.83 for an implied upside of 13.59%.
Stepping In For The Banks
Private credit offers a compelling opportunity in today’s higher-for-longer interest rate environment since investors can earn interest on high interest rate loans. Banks have been tightening their lending requirements, opening up an opportunity for private lenders to step in and make loans. Many of these private lenders pool funds from multiple investors, allowing individuals to receive attractive cash returns while leaving the professionals to service the loans.
The Private Credit Fund from Arrived offers investors an attractive opportunity to earn higher yields by investing in short-term financing for real estate projects. With interest rates reaching 10-year highs, this fund simplifies access to a diversified pool of real estate-backed loans, targeting annualized dividends of 7-9%.
The fund invests in loans used to finance professional real estate projects, such as property renovations, rehabs or new home construction, with loan periods ranging from six to 36 months. The fund emphasizes dividend income and capital preservation, providing investors with monthly payouts and quarterly liquidity options after six months.
Click here to learn more about the Private Credit Fund and invest with as little as $100.
Basecamp Alpine Notes from EquityMultiple offer another compelling high-yield opportunity right now, mainly because of the company’s perfect track record of on-time payments.
Alpine Notes are a powerful short-term cash management tool that also provides the security of institutional-quality real estate. They have a target APY of 9.00% over a 3-month term and a low minimum investment of $1,000.
Interest is accrued and compounded monthly, increasing the effective annualized rate of return. Notes can be automatically rolled over into a subsequent note series upon maturity to allow for further compounding of returns, or you can cash out to put your capital to work elsewhere.
EquityMultiple has issued 61 Alpine Note series to 1,500+ investors and has met all payment and funding obligations with no missed or late interest payments.
Click here to learn more about what makes Basecamp Alpine Notes an attractive high-yield investment.
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This article Warren Buffett Says, ‘When It Rains Gold, Put Out The Bucket’ And These High Yield Investments Are Making It Rain originally appeared on Benzinga.com
Source: finance.yahoo.com