Yield is the income earned from an investment, most often in the form of interest or dividend payments. Yield is one of the ways in which investments can earn a trader money, with the other being the eventual closing of a position for profit.
Most often, yield will be expressed as a yearly percentage of either the value of the original investment, or of its current market value.
The two assets that are most commonly associated with yields are shares and bonds. Share yields are usually given as a percentage of the current share price of a company. That means that an investor who sees the value of their shares increase will see greater return on their investment if dividend levels remain constant.
Bond yields can be given as either a percentage of the bond price when it is issued, a percentage of the current price of the bond, or an estimate of what the bond’s yield will be if it is held to maturity.