Since 2009, the efforts of the Federal Reserve and other global central banks to keep interest rates down have been an essential driver of the capital markets. With the Brexit news causing even more uncertainty and leading to a broad flight-to-quality, the historically low interest rates will probably stick around for some time.
Some deals might be too good to be true, and when it comes to investing, a healthy amount of skepticism is important in order to differentiate the deals from the duds.
With persistently low rates right now, yield-starved investors have been looking for more ways to boost their returns. The 10-year Treasury yield is hovering around 1.5%, and equities offering yields of 5% or more have become even more attractive in this environment as a result. Should investors just take the plunge then and expect a big return with these investments?