The best four high yield investment ideas for 2017

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Stocks that consistently pay dividends are a steady source of income for an investor. PHOTO/FILE
A high yield investment program (hyip) usually gives high return on investment, but it also carries with it very high risks.

Before buying a hyip, you should evaluate how the investment generates its returns and what factors would make those returns dwindle. This way, you will be at a better position to assess your risk tolerance level.

Here are some of the recommendable high yield investments.

1.) Real Estate Investment Trusts (REITs)
Commonly referred to as REITs, Real estate investment trusts are entities that invest in real estate related assets such as business parks, shopping malls, hotels and apartments. REITs pass on part of the rental income to you (the investor). Many REITs trade on national stock exchanges or privately in the over-the-counter market.

2.) High Yield Bonds
Bonds are debt securities issued by companies to raise capital for their own developments. When you buy a bond, you lend your money to the organization that issues it. In return for the loan, the issuer will pay you interest and return the principal amount when the bond matures at a specified date in the future – known as “call date” or “maturity date.”

Most investors prefer to buy high yield bond funds, but you can still make money out of individual high yield bonds.

3.) Dividend Paying Stocks
Stocks that consistently pay dividends can offer a steady source of income for an investor. However, you should keep in mind that if the revenues of the company dwindle the amount of dividends paid out can be reduced or eliminated all together. It is important to invest in stocks that have achieved consistent dividend growth in the past couple of years.

4.) Preferred Stocks
Preferred stocks are equity investments, although they are often compared to bonds because they are highly interest rate sensitive. These stocks pay dividends at a fixed rate and companies are required to pay dividends to their preferred stockholders before any dividend is paid out to ordinary stockholders.