Yield
The income return on an investment, expressed as a percentage of the investment's cost or current value.
Definition
Yield is the income generated by an investment over a specific period, expressed as a percentage. Different types of yield include: current yield (annual income divided by current price), yield to maturity (total return if a bond is held until maturity), dividend yield (annual dividends divided by stock price), and SEC yield (standardized 30-day yield for funds). In bonds, yield moves inversely to price — when bond prices fall, yields rise, and vice versa. The yield curve plots yields across different maturities and is a key economic indicator. An inverted yield curve (short-term yields higher than long-term) has historically preceded recessions.
Related Terms
Dividend Yield
The annual dividend payment divided by the stock price, expressed as a percentage.
InvestingBond
A fixed-income debt instrument where an investor loans money to an entity for a defined period at a fixed interest rate.
EconomyInterest Rate
The percentage charged by a lender or paid by a borrower for the use of money over a period of time.