Exploring stable sources of income as interest rates rise

RISK-AVERSE investors worldwide, who traditionally park their money in bonds, have been struggling since the 2008 financial crisis to earn a healthy income as interest rates remained at rock-bottom.

As the US economy emerged from a rough winter and Europe shook off a temporary bout of deflation, government bonds nose-dived as investors demanded higher interest rates on some of the world's safest bonds. In many cases, the government bonds fell more sharply than riskier debt issued by lower-rated governments and companies. This is the opposite of what normally happens - less risky government bonds are seen as safe havens in times of uncertainty.

The contrarian occurrence - possibly caused by interest rates on the safest debt being extremely low - has turned traditional income-investing on its head. With the Fed preparing to lift its benchmark interest rate some time later this year, investors need to look for sources of regular income which are likely to better navigate rising volatility while preserving the value of their investment.