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Investor Update

Thursday, May 28, 2026

How an Investment's Yield Can Break

By Charles Rotblut, CFA

What breaks a particular investment’s yield is part of the three-question stress test I will share during the AAII Income Investing Seminar. An interruption to the income stream or a significant decrease in the stream’s inflation-adjusted value are both ways a yield can “break.”

The stress test itself is a framework for evaluating the riskiness of income-generating investments. These risks cluster into a few categories across asset types. They include deterioration in the issuer’s ability to pay, interest rate moves, structural features like call provisions and inflation-eroding fixed payments.

This week, I share ways that the yields of stocks, bonds and other assets can break as a preview of the seminar.

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