skill of making yield

[J_]

Most of you, I suppose, are using their savings to get a yield.
For the last year the yield (on my money assets) I have made was about 3,5%. For the last 15 years I have never had a year with a negative yield or loss, and it was never lower than this year. I know that others invest in other financials than me, I do only deposits and spread them out over several banks so that my deposits are guaranteed by the dutch government. A very save and simple way to invest, but I suspect, that it will be not delivering the best yield. To investigate this I ask you (co forum members) to react and give your yields over the last year and if possible the last (15?) years. I like to learn.

[stand@desk]

When it comes down to it, Yield is just one part of a total return. The others being re-invested dividends or DRIPs and capital gains. All three contribute.

Yield is nice for peace of mind cause it feels like you are earning something, but it's total return that matters the most.

I like to have a mix of different types of investments, one's that yield, one's that are lowest cost index etc. Using tax deferred accounts for the highest taxed type of investments. My priority in investing is to stay in the game for the long run, not to go big or blow-up. Everyone will have their own level of risk tolerance.

If one was looking for maximum efficient yield I would suggest an ETF that is diversified enough that it won't go bankrupt (across several sectors not just a single sector) and re-invest or DRIP the distributions (in a down market) or take the distributions in cash in an up market and be prepared to hold the ETF for a long duration.

My two cents. Disclosure: I am a novice to intermediate level investor.

[A Life of FI]

By yield I assuming you are meaning return the total return (dividends/interest received plus capital gains) - I don't have my returns for the last 15 years but for the last 5 years they 8% on average and 9% over the last 12 months.

[J_]

@A Life of FI and stand@desk
thanks for your answers
Yes by yield I mean the total net return on one's saved investments in "financials" . So real estate (bricks) excluded.
In the current market I see my yield shrink (to zero), therefore my question to get an idea what other forum members make on their money.
I am happy with a yield of about 6%, so the results of Life of FI are more than good for me. I have already saved enough and live FI, but perhaps I grow old and is it wise to get some better yield than I currently make.

[Gilberto de Piento]

My checking account pays 2% and is FDIC insured against loss.

My retirement fund is mostly VFFVX. According to Vanguard it made 12.69% in the year ending 9/30/2014 (most recent available). The yield is highly variable depending on the time period you look at. It isn't insured and the money can disappear if the market drops. If you chase yield you will likely introduce risk.

[TheFrugalFox]

Of course, you need to also include inflation when comparing yield. I have grown my capital by 25% in around 2 years, but inflation in South Africa runs at around 6.5% per year. And as the rand has depreciated against the dollar if I worked it out in dollars it would also go down.

[Riggerjack]

Oddly, I checked this today. 18.6% YTD in my 401k. That is a little unusual, but I am very aggressive in my 401k investments. 100% is invested in stock index funds, individual stocks, and REITs. The REIT is up 34% this year, after a few years of slow gains, but it has been a good year for stocks, too.
Last year was around 12%, and the year before. I've done well most years, but that's because I was liquidating my 401k in 2008-9 just as everything was tanking. That is not financial acumen, I just had another project worth taking the penalty to withdraw the funds.
I am sure there is a nasty correction in my future, but that's what aggressive investment gets you.
I haven't calculated return on real estate. It is hard to figure until you sell, or at least pay off the mortgage.

[WillS]

LINE is making over 10% right now. Took a huge hit due to oil prices recently; A year or so ago it was yielding 9% but I stayed away b/c of the leveraged balance sheet and exposure to oil prices. Good thing! But now oil price changes are more likely to be positive, so in a way this is a positive carry call option on oil. But it is still risky because I think they 'need' the oil price recovery to happen fairly soon to avoid further decrease in the share price (of 10% or more), and it looks like it might not happen soon enough. Anyway, this is something I've got my eye on. I think, maybe later.

[BlueNote]

Yield can be sub categorized four ways:

1. Interest
2. Rents
3. Dividends
4. Price appreciation aka capital gains

There's mountains of information published about all of those methods of "making yield " .

Generally speaking there's always a risk free rate of yield available to any investor. Many people use US federal government debt yields as a risk free rate because it's as close to a sure thing as you can possibly get. Bank deposits are imho virtually the same as risk free as long as you're covered by deposit insurance.

Generally speaking if you pursue yields higher than the risk free rate you become subject to risk. The higher the yield the more risk/uncertainty for the average investor.

Time does funny things to investment risk. Inflation is often the mortal enemy to the person who invests for the long term at the risk free rate. However inflation is usually immaterial over short periods and thus bank savings is often the best place to park short term cash. However over longer stretches (10 year or more) investments like stocks tend to average out much better than bank interest. Stocks are very volatile in the short term though so time is an important consideration.

Anyways I'm going to stop before I end up writing an investment text book on my phone or something..

[fiby41]

I posted a similar question 1.5 months ago and didn't get one single decent reply. Instead the thread devolved into something else altogether.

Thanks for starting this thread.

Interest: 4.5%

Inflation: 8%

Real interest: -3.5%

[Riggerjack]

Wow!where are you that you have 8% inflation?

Don't take it personally, many people have issues with posting specific numbers when talking finance.

Me, I have an entirely different set of issues...

[fiby41]

!ncredible !ndia.

CPI is only an indicator though. The basket of goods they use to calculate it may not be the basket of goods we ERE folks are interested in.

Yes, I realised that people might have privacy issues with sharing private data. But nobody here knows anybody else IRL. Except jacob, no one else uses their real names here anyway. Jacob shares every financially important details w.r.t. ERE and even personally identifiable details on the about pages. This is a very specific and topic focused site so there is no way that information can be misused and jacob is as safe as any of us anonymouses. Anyway, whatever the people prefer...

[fiby41]

@Riggerjack: What are your issues? Your SO/spouse, friends, family, next of kin or co-worker(s) know your forum username?

[bad_LNIP]

One thought I had with this is trading options, primarily income generating stuff like covered calls/cash secured puts. I think you can generate income, although it takes some skill/knowledge to do so.

I think you can make a decent yield plus get the benefits of diversification/avoid single stock risks, by doing this on large, liquid ETF's like IWM or SPY or DIA.

1% per month shouldn't be too difficult