Yield is the income earned from an investment, most often in the form of interest or dividend payments. Yield is one of the ways in which investments can earn money, with the other being the eventual closing of a position for profit.
Yield will often be expressed as a yearly percentage of either the value of the original investment or of its current market value.
The two assets that are most commonly associated with yields are equities and bonds.
Equity yields are usually given as a percentage of the current equity price of a company. That means that an investor who sees the value of their shares increase will see a greater return on their investment if dividend levels remain constant.
Bond yields can be given as either a percentage of the bond price when it is issued, a percentage of the current price of the bond, or an estimate of what the bond’s yield will be if it is held to maturity.
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