Yield Chasing

Yield chasing is an investment strategy where investors seek higher returns by taking on higher risks. This often occurs during periods of low interest rates or when traditional low-yield investments are not providing satisfactory returns. In an effort to achieve higher yields, investors may allocate their funds to riskier assets or investments.

Investors engaging in yield chasing may turn to various asset classes such as bonds, stocks, commodities, or other investment vehicles in pursuit of higher returns. However, this pursuit of higher yields often involves taking on increased risk, which can lead to potential losses.

When market conditions change or fail to meet investors’ return expectations, those engaged in yield chasing may swiftly exit riskier assets, potentially incurring significant losses. As a result, it’s crucial for investors to exercise caution and consider the associated risks when seeking higher yields. Moreover, maintaining a balance between return expectations and risk tolerance, as well as diversifying investment portfolios, is essential for investors pursuing yield-chasing strategies.