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StockCram is not a broker-dealer, investment adviser, or financial institution. All content is for educational and informational purposes only and should not be construed as personalized investment advice. Consult a qualified financial professional before making investment decisions. Past performance does not guarantee future results.Simple Definition
The income return on an investment, usually shown as a percentage.
Why It Matters
Yield tells you what income you're getting relative to what you paid. A $100 stock paying $3/year has a 3% yield. Yield lets you compare different investments - a bond yielding 5% vs a stock yielding 2%. Higher yield usually means higher risk. The 10-year Treasury yield is the baseline that all other yields are compared against.
Key Points
- Dividend yield, bond yield, savings account yield - same concept, different investments
- Yield and price move inversely: when bond prices fall, yields rise
- Yield chasing (buying only for high yield) is risky - sometimes high yield signals trouble
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Related Terms
Common Questions
The income return on an investment, usually shown as a percentage. Yield tells you what income you're getting relative to what you paid. A $100 stock paying $3/year has a 3% yield.
Yield tells you what income you're getting relative to what you paid. A $100 stock paying $3/year has a 3% yield. Yield lets you compare different investments - a bond yielding 5% vs a stock yielding 2%. Higher yield usually means higher risk. The 10-year Treasury yield is the baseline that all other yields are compared against.
Dividend yield, bond yield, savings account yield - same concept, different investments
Yield and price move inversely: when bond prices fall, yields rise
Yield chasing (buying only for high yield) is risky - sometimes high yield signals trouble