Glossary
Yield
Yield is the income return on an investment, expressed as a percentage of the investment's cost or current market value. It includes interest payments (bonds), dividends (stocks), or distributions (funds), but not capital gains.
Why it matters
Yield tells you how much cash income an investment generates without selling it. Retirees and income-focused investors rely on yield to cover living expenses. However, chasing high yield can be dangerous — unusually high yields often signal that a bond issuer is in financial trouble or a stock's price has dropped due to fundamental problems.
Example
A bond purchased for $1,000 that pays $40/year in interest has a 4% yield. A stock trading at $50 that pays $1.50/year in dividends has a 3% dividend yield.
How Ray helps
Ray can calculate the income yield across your investment accounts. Ask to see your portfolio's cash return.
$ ray "how much dividend and interest income did my investments generate this year?"Related terms
APY (Annual Percentage Yield)
APY is the real rate of return on a savings or investment account, accounting for the effect of compounding interest.
Compound Interest
Compound interest is interest earned on both your original principal and on previously accumulated interest.
Diversification
Diversification means spreading investments across different asset classes, sectors, and geographies to reduce the impact of any single investment's poor performance on your overall portfolio..
Portfolio
A portfolio is the complete collection of your financial investments — stocks, bonds, mutual funds, ETFs, real estate, and other assets.
Capital Gains
A capital gain is the profit you earn when you sell an asset for more than you paid.