Economics and Business Professor Quoted in "U.S. News"

May 1, 2018

By Jeff Brown, Money Magazine

Saint Anselm College assistant professor of economics and business Jennifer Wells Kelber is quoted in U.S. News. (The article follows in part.)

Income Investors Face Risk, Reward

Professor Jennifer Kelber, Ph.D.
Assistant Professor Jennifer Kelber, Ph.D.
Bonds are generally safer than stocks, but carry risks. These tips will help find the right combination.

Investors can look for steady income in many places. The most common are bonds, which pay interest through coupons, and stocks which pay dividends.

In both cases, earnings are measured with "yield," a year's income divided by the security's current price. That makes it easy to compare. Stocks in the Standard & Poor's 500 index currently yield an average of just under 2 percent, while the 10-year U.S. Treasury note yields nearly 3 percent.

But the two types of yield are really quite different, and experts say it's hazardous to fixate on yield alone, even if income is the investor's chief goal. Stocks are more volatile, and bonds, though considered safer, can lose money, too.

"An income-focused investor should hold a portfolio of both bonds and high-quality dividend-paying stocks," says Jenny Kelber, assistant professor of economics and business at Saint Anselm College in Manchester, New Hampshire.

"The breakdown between the two asset classes is a decision that depends upon individual investor goals and risk tolerance," she says. "Further, market timing is notoriously difficult. It's generally wise to follow a buy-and-hold strategy."

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