The Quest for Yield

In today's market, finding investments that offer solid returns is becoming more difficult. Bond yields have dropped significantly, and other fixed-income options are no longer appealing. Global interest rates have steadily declined over the past few years, with some countries even facing negative rates.

Central banks, including the Federal Reserve, have kept interest rates low to stimulate economic growth, and they’re unlikely to change this until inflation rises. However, consumer price inflation remains in a prolonged disinflationary phase (more on that in upcoming articles). The reality is that low interest rates are here to stay.

This creates a tough dilemma for investors: either accept more risk to chase higher yields (such as junk bonds), or seek alternative options beyond the public markets.

Historically, commercial real estate has offered strong returns and growth opportunities. While there are still pockets of potential, the influx of institutional capital has driven up values in many real estate sectors, pushing yields to record lows.

Eight years ago, a friend approached me, asking for advice on how to secure a strong yet safe yield from a modest inheritance. He wanted to rely on passive income to support his family. At first, I thought, “Good luck!” But after some reflection, I realized there was an ideal solution – investing in Real Estate Notes.