Found some Mass. bonds (because it's my home state, so tax-free for both federal and state) yielding 6.43% just now, with expiration date of 2029-05-01 and with credit rating of AA+

http://massachusetts.municipalbonds.com/bonds/issue/914440KJ....

Also can also buy some REITs with annual high-dividend yield of 17% such as AGNC or NLY. These are a bit riskier due to fluctuating principal out on the open equity market. However, can mitigate this risk by owning ITM calls prior to ex-dividend dates and capture also run-up profits.

Can you actually buy them at that price? Don't they get auctioned off, and so that the actual yield is lower? From reading that web page it looks like the effective yield was only 4-4.5%

UPDATE: as svachalek points out, the 4-4.5% is not even the right yield. That is 4.5% interest per year, but if you pay $110 for the bond, you will only get a principal returned of $100, so the effective yield-to-maturity is even lower.

Thanks for sharing a specific example. Could be an interesting investment. At the same time, you have to weigh out the other risks such as Mass. being one of the most in debt states in the country.

http://www.usgovernmentspending.com/state_debt_rank

I can't see the details on this because I'm not going to set up an account, but in general don't believe the yield; you want to see the yield-to-worst.

http://www.forbes.com/sites/rickferri/2012/07/19/the-yield-t...

Could you explain the second part of your comment... I'm not sure I quite understand what you're saying. Wouldn't owning calls hurt you when the stock price likely falls post-ex-dividend? I'm pretty new to options trading...

Also, are you speaking from experience with your hypothetical? If so, I'd be interested in discussing some other things further.

>> can mitigate this risk by owning ITM calls prior to ex-dividend dates

Don't forget to mention that those calls aren't cheap.

Leveraged closed end bond funds are an option to get close to 6% with the added benefit of diversification (but the disadvantage of management fees, but the 6% yield are AFTER subtracting the fees): http://cef.morningstar.com/quote?t=FCUSA0004E&ops=&p...

Personally I have a diversified portfolio that yields about 6%, with corporate junk bonds (US and emerging market), emerging market sovereign bonds, business development companies, REITs, mREITs, and international high dividend stocks.

This stock/bond chart blew my mind. The bigger question is how long high bond rates will last?

http://www.businessinsider.com/t-rowe-price-us-equity-outloo...