The yield is an important key figure for evaluating the return on securities.
It indicates what percentage of the invested capital an investor has earned as a return in a certain period of time. In the case of equity securities such as shares, the yield is referred to as the dividend yield. This is the ratio of the dividend yield to the price of the share. For debt securities, such as bonds, the yield is often equated with the effective interest rate. In addition to the nominal interest rate, interest payments, maturity and repayment dates are also taken into account.
However, there are also differences between the primary market yield and the secondary market yield. The primary market yield is the return that investors can achieve when subscribing to securities. It is set by companies or issuers and is based on market interest rates. The secondary market yield, on the other hand, is derived from the price at which a security is traded on the market. It is thus an indicator of the current demand and supply of a security.
The yield is an important factor in deciding for or against an investment. However, it should be noted that a higher return can also be accompanied by a higher risk. Investors should therefore always consider their personal risk profile and pursue a balanced investment strategy.
