Yield in finance as applied to preferred shares currently shows fixed-income-like returns exceeding many corporate bonds, enhancing portfolio diversification. Let's start with one of my favorite ultra-high-yielders, Ares Capital (NASDAQ: ARCC) . This stock pays a forward dividend yield of 9.4%. Investing one-third of an initial $100,000 should generate annual dividend income in the ballpark of $3,140. Government bonds, otherwise called ‘sovereign’ or ‘treasury’ bonds, are financial instruments used by governments to raise money for government spending. Investors give the government a certain amount of money (the ‘face value’), to be repaid at a specified time in the future (the ‘maturity date’). In addition, the government makes regular periodic interest payments (called ‘coupon payments’). Once initially issued, government bonds are tradable on financial markets, meaning their value can fluctuate over time (even though the underlying face value and coupon payments remain the same). Investors are attracted to government bonds as, provided the country in question has a stable economy and political system, they are a very safe investment. Accordingly, in periods of economic turmoil, investors may be willing to accept a negative overall return in order to have a safe haven for their money. For example, once the market value is compared to the total received from remaining interest payments and the face value, investors have been willing to accept a negative return on two-year German government bonds between 2014 and 2021. Conversely, if the underlying economy and political structures are weak, investors demand a higher return to compensate for the higher risk they take on. Consequently, the return on bonds in emerging markets like Brazil are consistently higher than that of the United States (and other developed economies). Data from May 2024 shows utilities averaging a 3.9% yield, outperforming inflation-adjusted returns from 2-year Treasuries. Yield in finance here becomes a benchmark for real return assessment.