A. Due to the low interest rate environment, lots of investors seek higher yields from "safe investments", however, below are some bad options.
High-yield Junk Bonds
There are a lot of promotions of low credit quality bonds and bond funds (junk bonds) right now, however, investors seem to forget what happened in 2008, when the average high yield bond funds tanked 28%, at the time when investors needed fixed income to act as shock absorber.
Dividend Stocks
Dividend stocks are no safe heaven as well, just recall General Motor, Eastman Kodak, and large banks used to be "safe" dividend stocks and looked at their historical performances. In 2008, large-cap value funds lost more than the 37% S&P 500 lost.
MLPs
Even just 5 years ago, when Master Limited Partnerships were promoted heavily as "a safe toll-taking business", the JPMorgan Alerian MLP Index ETN (AMJ) has lost about 31% over the 3 years that ended in Sept 15, 2017.
The truth is the current bull stock market will come to an end, when it ends, those safe heaven investments will lose principal, no where need to be made up by the little "income" from them.
In our next blog post, we will discuss some truly safe investments with appropriate returns.