How to make the most of the Goldilocks era for income

Picture this: my folks retired about five years back, ready to kick back and enjoy the fruits of their hard-earned savings stashed away in their super fund. But here's the kicker - just as they were preparing to settle into their golden years, interest rates had begun to nosedive and by April 2020, they were practically scraping the bottom of the barrel.

Suddenly, their steady stream of income dried up faster than a puddle in the desert. Not keen on rolling the dice with riskier investments, they played the waiting game. Then, bam! The bond market, usually a safe bet, blew up in 2022. 

That left my folks scratching their heads, and I bet plenty of you were in the same boat. Where on earth could they find some decent income without playing financial Russian roulette?

Things have changed dramatically since the volatility of 2022 and investors - particularly income investors - no longer have to reach for returns. In fact, there is a meaty range of returns available across traditional income products. For example;

• High-interest savings accounts are offering intro rates of 5.35%
• TD’s are offering 5.25% over 6, 9, and 12-month period
• Many income funds have delivered between 8-13% over the past 12 months, as can be seen in Livewire's Fund Funds feature

But before you start counting your cash, there's a catch. Sure, 5%+ on a TD sounds juicy, but with inflation sitting comfortably above 3%, you're barely scraping half of that in real terms. As my colleague Hans Lee found out in a recent chat with a financial advisor, cash is basically going backwards after inflation and taxes take their cut.

Whilst the reach for income might be over, new questions have cropped up. Over the past 12 months, Australian stocks have rallied more than 14%, global stocks more than 19%, and even alternatives have delivered a solid 10%. While income is back, so is growth. 

So, forget the old dilemma of where to find income. Now, it's all about figuring out which income stream suits you best, considering the risk, and how much of your portfolio should be devoted to it.

Livewire’s Income Series is back for 2024 and we plan to ask and answer all those questions and more. We will be speaking with the biggest names in income investing to find out where they are finding compelling opportunities. 

Below are some of the features of Livewire's 2024 Income Series;

• A look at the most consistent dividend payers across the ASX and ETFs.
• A fixed income panel exploring how you can make the most of the Goldilocks era for fixed income.
• Two wealth managers share their tips for building portfolios in the current environment and the standout opportunities across asset classes. 
• Exclusive Rules of Investing podcast with the master of franked dividend investing, Dr Don Hamson from Plato Investment Management
  
• 10 expert interviews uncovering the best income opportunities from a range of asset classes.
• A list of funds to generate income across asset classes and styles.