It is always interesting to read reports about companies because perspective is different. As an individual you may have access to low-interest rates (hopefully you do) but one of your credit vehicles is a credit card and people use them with their rates in the 20% category. A few days ago in one of the newspapers a journalist wrote about a company in debt and used the term sky-high interest rates – the company’s debt was 8.5 to 12.5%. If this company could either pay down the debt or refinance it at lower rates, there could be smoother sailing for it. The company is in a field which is needed but how the product is needed is changing rapidly and no one really knows how it is going to end up which is the reason why interest rates are higher than average.

Linking to dividend paying stocks, it was not so long ago interest rates were closer to 5% and so were bond yields, with the great recession from 2008 people have accepted or become very use to low-interest rates or low federal reserve rates. This can be a great thing and hopefully it will allow the economy to move forwards and employment will continue to fall. In planning for the future, interest rates or yield rates are taken as a bench mark measure achieve. If you can receive 5% or more on a low risk investment it is highly worth doing. If it takes achieving a 10% return, then generally risk is going to pay a significant role – it is generally hard to achieve a 10% return year after year. On dividend paying stocks, that is why you hear total return – dividends plus capital gains. In a good year, both will add to a good low risk return and some years easily beat the averages while being a low risk.

There are more questions than answers, till the next time – to raising questions .