INCOME INVESTING: MANY OPPORTUNITIES OUT THERE (FINANCIAL FOCUS)

This "Financial Focus" column is prepared by Edward Jones Investments, headquartered in St. Louis. Jones includes branches throughout the nation, including Cape Girardeau and Jackson.

With a record-setting bull market, it's tempting to think that every investor is looking just for capital appreciation. But many people also invest for income. And, if you're one of them, you've got more opportunities than ever before.

When should you invest in income-producing vehicles? If you're in the early or middle stages of your career, you may or may not actually need the income, but you'll find that income-oriented investments can serve to diversify a portfolio that would otherwise contain a large percentage of growth stocks. As you enter retirement, you may well need investment income to supplement your other financial resources -- Social Security, retirement plan distributions, etc.

In other words, you will probably need different amounts of investment income at different times of your life. But where, exactly, should you put your money? Consider the following:

* Certificate of Deposit (CD) -- CDs promise you a fixed rate of return and guarantee your principal. If you invest $10,000 in a one-year CD paying 5 percent, you will end up with $10,500, before taxes.

* Corporate, tax-free or government bonds -- Bonds also offer a set interest rate. So if you put your $10,000 into a 7-percent bond due in 10 years, you will earn $700 a year. In 10 years, when the bond matures, you will get your $10,000 back. If you choose to sell the bond before the 10 years are up, you may get more or less than your $10,000, depending on current market interest rates.

While no investment is risk-free, your principal is generally safe in quality bonds held to maturity. However, you still risk losing purchasing power to inflation. But some income-producing investment trusts (REITs), also offer the potential for growth, which can overcome the effects of inflation.

* High-quality utility stocks -- Until a few years ago, natural gas and electric companies paid investors steady dividends, but offered less potential for brisk price appreciation. Now, though, many utility companies are investing in non-regulated businesses, which can provide utilities with greater profits, increased earnings -- and higher stock prices.

* Real estate investment trusts (REITs) -- REITs own and manage investment property, such as shopping centers or apartment complexes. REITs are bought and sold on the market, just like stocks.

Apart from choosing different income-producing investments, you can also follow different strategies to maximize your returns. One such strategy is to create a "bond ladder." This simply means you buy bonds of varying maturities -- short-term, intermediate and long-term. When rates rise, you can reinvest some of your maturing short-term dollars into higher-rate bonds. But if rates are falling, you have given yourself some protection locking in higher yields typically offered by longer-term bonds.

By picking the right income-producing investments, you can go a long way toward meeting your financial goals -- now and in the future.

The Southeast Missourian does not recommend that readers buy or sell stocks featured in this column, which is provided for informational purposes only.