If there’s one trap I’ve seen investors fall into time and time again, it’s “chasing yield”: getting pulled in by a high dividend yield and not digging deeper to see if that payout is really sustainable.
An asset class that’s collapsed in 2020—and is now on the verge of vanishing completely—is a classic example of the dangers of getting distracted by a high current yield.
The investments in question are called exchange-traded notes (ETNs), some of which held out the promise of mid-double-digit yields. Unfortunately, these funds—which some folks disastrously confuse with their bigger brothers, exchange traded funds (ETFs)—came with a catch that’s now sending their values to zero.… Read more
Recent Comments