economy
These are Schwab's top three income ideas for the rest of 2026
Collin Martin of Schwab Center for Financial Research lays out where he sees the best opportunity for income investors right now.
TL;DR
- Selectivity is crucial for investors seeking solid yields in the current bond market.
- Inflation is expected to remain sticky, with the Federal Reserve likely to maintain a patient stance, though a June rate hike is becoming more probable.
- The bond market is expected to continue experiencing volatility.
- Investment-grade corporate bonds offer high-quality income with average yields around 5%, supported by strong corporate fundamentals.
- Consider increasing high-yield bond exposure cautiously, as the market quality has improved and the broad market default risk is relatively low.
- Preferred securities provide yields around 6% and potential tax advantages, with their performance more linked to credit risk and equity markets than long-term interest rates.