News that the Reserve Bank has moved to cut cash rates to 1.75% today has lifted the S&P/ASX 200 (Index: ^AJXO) (ASX: XJO) 1.8% by late afternoon as investors respond to more stimulus for the local economy.

Moreover, many investors will again turn to the share market for better returns given that cash savings rates currently sit around just 2.5% – 3% and are set to head lower.

The yield chase is already seeing fast-rising share prices for popular income stocks like Sydney Airport Holdings Ltd (ASX: SYD) and Transurban Group (ASX: TCL). They’re up 2.6% and 2% respectively to record highs this afternoon.

However, it’s no use locking in a 4%-5% yield if the value of your capital falls a quarter over the next 12-24 months, and these infrastructure businesses already trade on sky-high valuations due to their popularity.

Smart income seekers would be better off considering less popular shares on more reasonable valuations, as these offer the best mix of yield and capital preservation or appreciation in the years ahead. Below are four to consider.

Magellan Financial Group Ltd (ASX: MFG) is an international equities manager that will benefit from an Australian dollar set to trend lower on the back of today’s rate cut. Selling for $21.90 it offers a fully franked dividend yield around 4.5% if you annualise its most recent interim dividend payment of 51.3 cents per share.

Platinum Asset Management Limited (ASX: PTM) is another founder-led international equities manager. Analysts are forecasting 35 cents per share in dividends this financial year, which means it yields a fully franked 5.8% when trading for $6.06 today.

Wesfarmers Ltd (ASX: WES) is the conglomerate behind Coles supermarkets and the Bunnings Home Improvement businesses. Both are on a strong growth trajectory and Wesfarmers offers a fully franked yield of 4.7%, with shares selling for $43.60 today.

Telstra Corporation Ltd (ASX: TLS) is the dominant telecommunications provider in Australia that still trades on a sensible valuation despite the chase for yield. It should hand out at least 31 cents per share this financial year and yields a fully franked 5.6%. It also recently announced it is looking to hand back another $1.5 billion in excess capital to shareholders.

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Motley Fool contributor Tom Richardson owns shares of Magellan Financial Group.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.