"The only thing that gives me pleasure is to see my dividends coming in."John D RockefellerIn a world of diminishing yields on the most popular savings vehicles, investors need to consider more innovative investment strategies.Since the beginning of the credit crisis in late 2007, interest rates on government bonds, certificates of deposits, saving accounts, mortgage-backed securities, insurance annuities, fixed income funds and money market funds have been in an almost constant state of decline.'Easy money' policies implemented by the major countries' central banks designed to backstop their plunging economies succeeded in saving the world but produced the unwelcome side effect of punishing savers.Most recently, the US Federal Reserve cited a dismal nine percent unemployment rate and declared they will hold short-term interest rates near zero for 'an extended period of time'.While sharply rising interest rates can be troublesome for bond markets in the short run, an extended low rate environment can be even worse.A prolonged period of ultra-low interest rates adds to the savers dilemma creating what might be considered the most challenging era in history for yield-seekers at just the time when a large bubble of developed-world citizens are quickly approaching retirement.However, even though many fixed income securities are offering only miniscule yields, significantly better returns may still be found on certain less popular and perhaps less understood sectors of the market.The old saying 'when the going gets tough the tough get going' may just have been written for today's economy.Clearly, the latest string of anemic economic data presented a stark reminder that the global economic recovery continues to be bumpy and well below trend. Perhaps the most challenging issue on the table today is too much debt; the world's largest economies still have way too many IOU's out to various trading partners. The US, UK, Japan and euro zone are all at, or are expect to soon be in hock by up to 100 percent or more of their respective Gross Domestic Product (GDP) levels - ratios almost never seen before. To some extent, the Greek drama and related credit crisis in peripheral Europe was a necessary public wake up call. Some governments got the message and have begun to move forward with planned austerity measures designed to balance bloated budgets and start paying off debts.Economists are watching the Greek situation with keen interest as the country may be an extreme example of fiscal irresponsibility but their plight is certainly not unique. In fact, the country that birthed democracy might just be considered the latest casualty in the ongoing 'deleveraging' of the old world governments which have essentially been living off publically financed credit cards. Within the past couple of years, fiscal fireworks in Dubai, Iceland and California each broke with a slightly different spin but are all symptomatic of the ongoing trend towards global deleveraging. More will follow suit and the belt tightening will likely go on for many years to come. Stricter public policies will crimp developed country growth prospects adding further support to the case for low interest rates.What's a Saver to Do?One good thing about Wall Street is that the past two decades of creative capital market underwriting have generated a big basket of investment products leaving investors with more than a few options. But the downside to the plethora of products is the difficultly in understanding and choosing between them. In the most basic sense, there are four ways to increase return and/or income levels. Investors can purchase lower quality assets, buy securities maturing at longer dates in the future, invest in smaller, less developed markets or allocate a greater portion of their savings to more volatile asset classes such as stocks and commodities with the hope that these markets keep moving up. Each of these directions has advantages and drawbacks which ultimately come down to tradeoffs between current income, future growth, liquidity and safety. After setting one's time horizon for needing funds, risk tolerance and personal preferences, an educated investor would be wise to consult with a reputable investment manager to see which strategy makes the most sense for them.Strategic ApproachesIn my experience a holistic, balanced portfolio approach produces some of the best results. While many fortunes have been made on the back of one of two winning assets, just as many fortunes have been lost in this same way - especially during the last two severe market downturns. A better strategy is to consider an overall plan which participates in those market sectors with the best potential and then to allocate funds with managers doing well within their sphere of competence. Furthermore, an investor should to look beyond the most popular sectors such as the S&P 500 and Barclays Aggregate bond averages in this environment keeping an eye out for managers who consistently turn up bargains even during the most challenging times.A few examples of often overlooked asset classes include preferred stock shares, hybrid and convertible bonds, subordinated debt and high dividend-paying common stocks.To start with, preferred stock and hybrid securities are closely related and although they generally do not share the highest credit ratings of the issuer, they currently provide some of the best yields on the market today.For example, several of the largest and strongest global financial institutions have recently issued preferred stock at rates of over six percent without any withholding tax penalties to offshore investors. Similarly, most subordinated debt instruments offer relatively high yields in addition to some principal upside with growing and financially stable companies.Although they are among the most attractive subsectors on a risk-reward basis, high dividend-paying equities are often neglected due to their generally stodgy and boring perception. Cheerleaders for electric utility companies seldom win the top time slots on CNBC. Yet when the markets fall apart, dividend-seeking investors tend to hold on the shares rather than dumping them with the rest. For this reason, many of the highest dividend payers have less than half the volatility of the overall market. Surprisingly, our in-house research at LOM shows that the big payers actually beat the broader market over time. Importantly, this trend is especially pronounced during times of low interest rates - such as we have now. The tortoise beats the hare!This month LOM is launching the Stable Income Fund, a unique product to Bermuda designed and managed to take advantage of the some of the foregoing market opportunities. The fund will pay a set interest rate determined at the beginning of each year in addition to having some growth potential to protect against inflation.This commentary is for information purposes only. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument, investment product or service. The information contained herein, has been compiled from sources believed to be reliable, but no representation or warrant, express or implied , is made by Lines Overseas Management Limited or any of its affiliates or representatives, as to its accuracy, completeness or correctness. Readers should consult with their Investment Advisor if such information and or opinions would be in their best interest when making investment decisions. LOM is licensed to conduct investment business by the Bermuda Monetary Authority.