Investors who purchase Dell shares today and hold for a $ 13.65 take - private price would stand to earn 1.6 % on their investment over six months, or about 3.2 % annualized, which is very
good in a low interest rate environment.
As many fixed income investors have
discovered in the low interest rate environment of the past several years, opportunities to achieve better levels of income exist, but thoughtful consideration of the potentially higher risks associated with the hunt for better yield is essential.
But there is also some thinking to be done about how monetary policy considerations should factor in financial stability issues, and the role that macroprudential policies might play in addressing system - wide
risks in a low interest rate environment.
One of the oldest tricks in the game is to offer a high current yield, where the yield can get curtailed through early prepayment (
typically in low interest rate environments), or some negative event that forces the security to change its form, such as when a stock price falls with reverse convertibles.
Asked why they would want guaranteed income, respondents said it provides extra protection should they live to a ripe old age (35 %), peace of mind (31 %), the ability to budget with confidence (29 %), maintaining a comfortable lifestyle (27 %) and receiving a higher payout than what savings accounts and certificates of deposit (CDs) are currently
paying in this low interest rate environment (24 %).