# Yield

Yield is the income return on an investment, expressed as a percentage of the investment's cost or current market value. It includes interest payments (bonds), dividends (stocks), or distributions (funds), but not capital gains.

## Why it matters

Yield tells you how much cash income an investment generates without selling it. Retirees and income-focused investors rely on yield to cover living expenses. However, chasing high yield can be dangerous — unusually high yields often signal that a bond issuer is in financial trouble or a stock's price has dropped due to fundamental problems.

Example:

A bond purchased for $1,000 that pays $40/year in interest has a 4% yield. A stock trading at $50 that pays $1.50/year in dividends has a 3% dividend yield.

## How Ray helps

Ray can calculate the income yield across your investment accounts. Ask to see your portfolio's cash return.

Terminal:

`$ ray "how much dividend and interest income did my investments generate this year?"`

## Related terms

[APY (Annual Percentage Yield)

APY is the real rate of return on a savings or investment account, accounting for the effect of compounding interest.](/content/learn/apy/index.html)

[Compound Interest

Compound interest is interest earned on both your original principal and on previously accumulated interest.](/content/learn/compound-interest/index.html)

[Diversification

Diversification means spreading investments across different asset classes, sectors, and geographies to reduce the impact of any single investment's poor performance on your overall portfolio.](/content/learn/diversification/index.html)

[Portfolio

A portfolio is the complete collection of your financial investments — stocks, bonds, mutual funds, ETFs, real estate, and other assets.](/content/learn/portfolio/index.html)

[Capital Gains

A capital gain is the profit you earn when you sell an asset for more than you paid.](/content/learn/capital-gains/index.html)