F I SCAL FI TN ESS
MICHAEL J. DONNELLAN M3 Wealth Management
LOW INTEREST RATES AND THE SEARCH FOR YIELD Low yields have made income tough to come by in recent years, and they have sent investors searching for yield and income wherever they can find it. The Federal Reserve lowered the federal funds rate level to near zero in mid-March of this year, affecting interest rates. When thinking about the effect that low interest rates have on investments, the impacts are mixed. Fixed-income investors dislike low interest rates because returns on bonds, certificates of deposit and savings accounts are low. But businesses, home buyers and the stock market prefer low interest rates. With lower borrowing costs, companies can grow and expand more quickly leading to greater profits.
14 | Official Publication of The Ohio Landscape Association
Savvy investors understand that a diversified investment portfolio will typically include bond investments, but given the low interest rate environment, they may not be as attractive right now. Here are a few ways for you to increase your returns and counteract the effect of low interest rates that depress returns on fixed assets. Investors have been challenged to find yield for over a decade The financial crisis starting in 2008 depressed yields and now the pandemic in 2020 crushed them again. continued on page 16
