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Hey, Yield-Starved Investors: What Are You Doing?

Saturday - 4/20/2013, 5:00pm  ET

Bonds and bond funds trade at some of the lowest yields on record. Why are investors putting up with measly yields? Partly because inflation is so low, and partly because they're frightened of everything else in the investment world.

But low yields in bonds has spilled over into stocks, too. Traditional dividend dynamos like Altria and Verizon have seen their share prices spike and their yields fall in recent years as the hunt for income grows vicious.

What are yield-hungry investors getting themselves into? I asked Charles Schwab chief investment strategist Liz Ann Sonders. Here's what she had to say (transcript follows):