Web Trader MT5
Yield is the income an investment generates, usually shown as a percentage. In simple terms, it tells you how much money you receive from holding an asset, without focusing on whether the asset’s price goes up or down.
Yield is commonly used with bonds, dividend-paying stocks, funds, and sometimes currencies. For bonds, it usually comes from interest payments. For stocks, it often comes from dividends. This makes yield especially useful for investors who want regular income from their portfolio.
Yield is different from total return. Return includes income plus any gain or loss in the asset’s price. Yield focuses mainly on the income side.
Example:
If you buy a stock for $100 and it pays $5 in dividends over one year, the dividend yield is 5%. This means you earned $5 in income for every $100 invested.
A higher yield can look attractive, but it is not always safer. Sometimes, a very high yield may signal higher risk, such as a weak company or a bond issuer that must offer more income to attract investors.
