A:
Once investors know the approximate due dates and yields of their holdings, they can do a few simple calculations in a spreadsheet or other program to calculate thier income. Here is a breakdown of the due dates for some common fixed-income sources:
-
Bonds & CDs – Government, corporate, and municipal bonds tend to pay their interest semiannually, but exactly which months will depend on the individual issue. Information about specific bond coupons can be obtained from account statements or from a broker or advisor directly. The same semiannual schedule also applies to certificates of deposit (CDs) from a bank or other institution.
-
Money Market & Mutual Funds – Many fixed-income mutual funds and exchange-traded funds will pay their income monthly. The exact amount distributed each month will vary based on market conditions, but a current yield figure can be found online or through a broker and used to calculate a pro-rated amount that will be sent to your account each month.
- Stocks – Common stocks that pay dividends typically distribute this income once per quarter, or four times per year. Yield figures for stocks can also be found through many media outlets or through a financial advisor. Companies generally try to increase their dividends over time, but most do so slowly, and so investors should assume a relatively constant yield over short time frames. Preferred stocks may pay their dividends quarterly or monthly, but the dividend rate is typically locked in at issuance.
A hypothetical portfolio could look like this on an income estimation spreadsheet:
| Portfolio A | ||||
| – | Market Value | Annual Yield | Annual Income (est.) | Payment Schedule |
| Bond Mutual Fund | $60,000 | 3.50% | $2,100 | Monthly dividend |
| CD at local Bank | $50,000 | 4.50% | $2,250 | June, December |
| Money Market Fund | $20,000 | 2.75% | $550 | Monthly dividend |
| Stock ABC | $15,000 | 2% | $300 | Mar, June, Sept, Dec |
| Stock XYZ |
Where can I get bond market quotes?
July 7, 2024
No Comments
How do I use the holding period return yield to evaluate my bond portfolio?
July 8, 2024
No Comments
What are some examples of financial markets and their roles?
July 8, 2024
No Comments
Are high-yield bonds better investments than low-yield bonds?
July 7, 2024
No Comments
How safe are money market accounts?
June 30, 2024
No Comments
What is the difference between yield to maturity and holding period return yield?
July 7, 2024
No Comments
To what extent are utility stocks affected by changes in interest rates?
July 7, 2024
No Comments
Which investments have the highest historical returns?
July 7, 2024
No Comments
How Does a Person Gain From an Investment?
July 8, 2024
No Comments
Why companies issue debt and bond?
July 7, 2024
No Comments
All Rights Reserved | |||