Finding a suitable return on your wealth can be difficult these days.
Especially with the RBA leaving the nation's cash rate at just 2 per cent last week, with many pundits suggesting further cuts are imminent.
Analysts from Australia and New Zealand Banking Group (ASX: ANZ), for instance, think they'll hit 1.5 per cent in 2016.
Coincidentally, ANZ thinks the two cuts will occur in February and May – the very same months the RBA cut interest rates this year.
Others suggest the next bout of stimulus will be provided as soon as Melbourne Cup Day.
I'm not sure whether to put too much weight behind that last forecast.
To begin with, consumer confidence rose 5.1 per cent in the week ended 11 October, according to the latest ANZ-Roy Morgan survey, possibly thanks to Malcolm Turnbull's recent appointment as Prime Minister.
Glenn Stevens and his fellow board members seem keen to prolong another interest rate cut for as long as possible. They'll likely use any snippet of encouraging news as reason to delay.
You see, interest rates are already at record lows and the RBA needs the ammunition in case conditions do worsen. For instance, if commodity prices fall further or if China's economic growth continues to deteriorate.
The difficulties of finding a decent return
Low interest rates are fantastic for families trying to pay off their mortgage but they're terrible news for most retirees, and those individuals who need the interest income to live off.
With most term deposits offering between 2 or 3 per cent, it's hardly enough for those people to get by… especially when you consider the taxes incurred on the income, or the inflation that eats away at the overall returns.
That's why a lot of investors have looted their bank account and shifted cash to their brokerage accounts… desperately seeking companies paying fully franked dividends.
Five years ago, that meant investing in companies like Commonwealth Bank of Australia (ASX: CBA) and Telstra Corporation Ltd (ASX: TLS).
Shares of both companies had been beaten down by the cane that was the Global Financial Crisis, offering an opportunity for investors to pick up two great companies at sublime prices.
Better yet, they offered solid, fully franked dividend yields.
In fact, had you bought shares in both companies early in 2009, you'd be boasting a gain of around 310 per cent and 155 per cent respectively, including dividends.
Given these enormous returns, members of Andrew Page's Motley Fool Dividend Investor service might find it odd that neither of those companies has made it to his list of "buy" recommendations.
Why? Because no company is a buy at any price.
At their current valuations, Andrew simply believes there are far greater opportunities to choose from.
Particularly now that, according to The Australian Financial Review, the banks could be forced to cut their dividend payout ratios – possibly to just 50 per cent – to meet tougher capital requirements.
Had that applied in the 2015 financial year, Commonwealth Bank would have paid out roughly a $2.80 dividend per share, fully franked, instead of $4.20 per share.
To put that into perspective, investors could have been looking at a 3.8 per cent yield, rather than the 5.6 per cent yield being offered today.
Westpac (ASX: WBC), ANZ and National Australia Bank (ASX: NAB) are all in a similar boat.
They're not the kind of returns investors in bank shares are accustomed to, yet they could become a reality in the not-too-distant future.
The best investment you'll ever make
Investing in the stock market is clearly riskier than stashing your money away in a savings account. But at the same time, it may be necessary to bolster your income when interest returns are so poor.
Thankfully, that risk can also be somewhat mitigated by investing in companies with solid foundations, reasonable growth prospects and a reliable dividend yield.
In fact, these are the very companies Andrew Page seeks to uncover for members of Motley Fool Dividend Investor.
It is this approach that helped him unearth Australian Pharmaceuticals Industries (ASX: API) in January this year. Members who followed Andrew's advice at the time have nearly doubled their initial investment in the time since.
Notably, Andrew currently views the company as a "hold", meaning it mightn't be the best place for new money.
But, there are plenty of other great companies he loves at today's prices…
In fact, at 4:30pm AEDT this afternoon, Andrew will email his members detailing his Best Buys Now stock recommendations.
These are the two companies already on his list of "Buy" recommendations that he believes offer the most compelling opportunity today!
For a small fee of just $99 for a 12-month subscription to Motley Fool Dividend Investor, you can also gain instant access to every single stock ever recommended by Andrew. Better yet, a subscription is likely tax deductible.
With interest rates set to remain low for the foreseeable future, it could well be the best investment you ever make!
