Income Insights

Yields on junk bonds are relatively low now and prices are likely to fall further because of spillover from the troubled mortgage market.

For income, investors are better off with high-yield vehicles linked to the stock market or to energy prices. For stock-oriented exposure, convertible bonds and preferreds that can switch into common stock are the best choices.

For energy-related income, Canadian oil and gas trusts are appealing. And if oil prices stay anywhere near current levels, those oil and gas trusts are likely to continue to pay hefty dividends.

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