With the Federal Reserve announcing another rate cut on Wednesday, investors may be looking for fresh income opportunities. The Federal Open Market Committee said it was slashing the federal funds rate by 25 basis points, or a quarter percentage point. Yields on short-dated assets, like money market funds and Treasury bills, are expected to follow. “If you’re still sitting in a lot of cash, extending duration now makes sense, because that reinvestment risk looks to be greater than the duration risk at the moment in the markets,” said Kathy Jones, chief fixed income strategist at Schwab Center for Financial Research. That said, you don’t want to chase higher-yielding assets simply to bring in more income. “Don’t just blindly extend out your risk,” said Michael Hans, chief investment officer at Citizens Wealth. “There’s a difference between extending out on the yield curve and locking in rates versus thinking through, ‘Am I just going to stretch for high-yield corporate credit? Am I going to stretch for emerging-market debt when credit spreads are really tight?'” High-quality bonds Jones and Hans both like high-quality fixed income in this environment. For instance, investment-grade corporate bonds are “not a screaming buy” right now because spreads are tight, but they are fine for long-term investors who are looking for income, Jones said. “Corporate profits are still near all-time highs — they deteriorated a little bit from the peak, but still very strong,” she said. “Cash flows among these companies are strong, and we don’t have a lot of worries about defaults or tremendous volatility.” Jones also likes Treasurys and agency mortgage-backed securities, which are backed by the government and can provide more yield than Treasurys. Core bond funds are another way to invest across the high-quality spectrum. Investors should have about 80% of their fixed-income allocation in core bonds, whether in a fund or individual bonds, Jones said. For those willing to take more risk, they can then add non-core bonds like high-yield or preferred securities, she said. “The reason you hold fixed income is generally to be income and capital preservation and diversification,” she explained. “If you go into a lot of high yield or other riskier sectors, you’re actually increasing the correlation with equities and that skews your portfolio allocation.” Hans believes core bonds are well posited to deliver strong returns. “We’re coming off the back of what I would tell you is a great year for traditional fixed income, for credit oriented fixed income,” he said. “All the historical data, the best indication of future rates of return in high grade fixed income is starting yields and the current starting yields are still very strong relative to where we’ve been.” Right now he specifically sees opportunity in asset-backed securities for their durability and consistent cash flow. “We are in an environment where we still think the macro is in good shape, but we really want to be cognizant of the fact that traditional rates are going to continue to grind lower, spreads are really tight,” he said. “So where are there areas that you can actually see a consistent or higher degree of rate without a material uptick in risk? That’s why asset-backed lending.” Municipal bonds For investors in higher tax brackets, municipal bonds can also make sense right now. Munis are exempt from federal tax and, if the holder lives in the state in which the bond was issued, free of state tax. “You could go a little bit longer on the yield curve and get a bit more and the way of income,” Jones said. Certified financial planner Marguerita Cheng , CEO of Blue Ocean Global Wealth, likes to invest in municipal bonds for her wealthier clients, particularly those in high-tax states like California. She looks for bonds that are high quality, insured and free of the alternative minimum tax. Most munis are not subject to AMT, which is applied to high-earning taxpayers who may otherwise use a number of deductions to reduce their tax liability. Cheng likes to build muni bond ladders, which means staggering the maturity dates of multiple bonds. “I diversify with regard to region, and then, of course, maturity and quality,” she said. CD ladders Those who may be risk averse or are looking for a place to park cash for less than 18 months may want to consider certificates of deposit, said Cheng, a member of the CNBC Financial Advisor Council . She specifically likes building ladders, which means staggering the maturities of different CDs. “I find six months, nine months, 12 months is a sweet spot,” she said. “In a decreasing rate environment, this is a very good strategy, because you are maintaining liquidity [and] you are also diversifying against interest rate risk. Dividend stocks Investors can also turn to dividend-paying stocks to pick up some extra income. The assets can also help stabilize portfolios during times of uncertainty and high valuations, Morgan Stanley said in a note Monday. “When growth slows and interest rates fall, stable, higher-yielding dividends become more appealing as cash and fixed income options lose their allure,” strategist Todd Castagno wrote. Cheng likes to focus on companies that have a history of consistently paying dividends. “They can provide a reliable income stream as well as the potential for capital appreciation,” she said. For example, energy, health care and utilities can perform better because if the cost of borrowing is lower, they can have more consistent cash flow. Dividend exchange-traded funds are also a way to get exposure. The S & P 500 Dividend Aristocrats ETF , for instance, is composed of companies that have grown their payouts for at least 25 years. NOBL 1Y mountain S & P 500 Dividend Aristocrats ETF year to date. Whatever you choose to bring in more income, make sure your portfolio remains diversified, Cheng said. Also, don’t worry about being too late to make a move, she said. “The Fed has had some rate cuts, but you didn’t miss the boat,” she said. (Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here .)