Posts: 1,863
Threads: 35
Joined: Jan 2016
Reputation:
6
(08-09-2021, 07:58 AM)fenders53 Wrote: (08-09-2021, 07:17 AM)ken-do-nim Wrote: This morning I learned about the Covered Call ETFs: https://finance.yahoo.com/news/etf-battl...00549.html.
So, I think all of JEPI, QYLD, NUSI, and RYLD have merit. The video points out that NUSI will do the best in a down market.
They are less risky than some of your other income candidates. They actually employ about half the strategy I use in the income section of my portfolio. If the market is flat to slightly up they will do well. An index like VOO will trounce them over time though. As appropriate throw up a comparison graph of the index they track and look back 10 years.
VOO is also at $407 a share so can buy a hell of a lot more of NUSI 
NUSI has a 7% yield where as VOO is only 1.34%
I'm not debating with you but you , and no one said NUSI was in the same class with VOO. Totally different investment. But you can own both, as I do. Have owned VOO since $114.
Not to mention NUSI is less then a year old so you really cant compare the two.
And if NUSI were to stay at these levels and I just collect the dividend here I'm quite happy collecting that nice payout.
Posts: 6,404
Threads: 47
Joined: Aug 2018
Reputation:
68
08-10-2021, 09:35 AM
(This post was last modified: 08-10-2021, 09:36 AM by fenders53.)
(08-10-2021, 09:23 AM)divmenow Wrote: (08-09-2021, 07:58 AM)fenders53 Wrote: (08-09-2021, 07:17 AM)ken-do-nim Wrote: This morning I learned about the Covered Call ETFs: https://finance.yahoo.com/news/etf-battl...00549.html.
So, I think all of JEPI, QYLD, NUSI, and RYLD have merit. The video points out that NUSI will do the best in a down market.
They are less risky than some of your other income candidates. They actually employ about half the strategy I use in the income section of my portfolio. If the market is flat to slightly up they will do well. An index like VOO will trounce them over time though. As appropriate throw up a comparison graph of the index they track and look back 10 years.
VOO is also at $407 a share so can buy a hell of a lot more of NUSI
NUSI has a 7% yield where as VOO is only 1.34%
I'm not debating with you but you , and no one said NUSI was in the same class with VOO. Totally different investment. But you can own both, as I do. Have owned VOO since $114.
Not to mention NUSI is less then a year old so you really cant compare the two.
And if NUSI were to stay at these levels and I just collect the dividend here I'm quite happy collecting that nice payout.
Enough of your poor people talk.
There are other ways to buy SPY and that wasn't really the point. I'll type it slower for you this time lol. When you buy anything that is indexed based it's not a terrible idea to take a look at what it does over time vs the index, and especially during times when all hell breaks lose. What are you gaining or giving up? I am not knocking NUSI. It's pretty much the same strategy I use for about 1/3rd of my port. In this case my solution would be to own both.
Posts: 1,631
Threads: 54
Joined: Oct 2020
Reputation:
6
In fact I have VOO (no leverage), SPUU (double leverage), and SPXL (triple leverage) to capture the S&P 500! And as you'd guess, the dividend shrinks as you add leverage:
(VIG: 1.78%)
VOO: 1.30%
SPUU: 0.66%
SPXL: 0.13%
But in my situation, the Income part of my portfolio is needed to produce dividends to supplement my monthly budget (for the two paycheck months, not the three*). If I didn't have that requirement, I probably would focus more on growth, and stocks that I'd pick up would have to at least be on par with SPUU.
* I get paid every other Friday. That usually means two months of the year are 3 paycheck months, but there's this crazy payroll leap year that comes around like once every 11 years where there are 27 Fridays in a year, not 26, which can result in 3 three paycheck months. In 2027, I will get 3 paychecks in January, July, and December.
Posts: 6,404
Threads: 47
Joined: Aug 2018
Reputation:
68
Somewhat off topic but this zero interest rate thing is a double edged sword. It's probably responsible for the last 10-20% gain in our equity holdings. Imagine yourself a 70yr old retired woman. Your spouse just passed away and you have your SS, maybe half his pension, and that $100K you had in a CD that gave you a few hundred extra a month now gives you $20. It forces risk taking if you even know how to do it. You can buy the SPY at clearly high historical valuations just to get back half your former CD yield.
Posts: 1,631
Threads: 54
Joined: Oct 2020
Reputation:
6
08-10-2021, 01:37 PM
(This post was last modified: 08-10-2021, 01:37 PM by ken-do-nim.)
(08-10-2021, 10:29 AM)fenders53 Wrote: Somewhat off topic but this zero interest rate thing is a double edged sword. It's probably responsible for the last 10-20% gain in our equity holdings. Imagine yourself a 70yr old retired woman. Your spouse just passed away and you have your SS, maybe half his pension, and that $100K you had in a CD that gave you a few hundred extra a month now gives you $20. It forces risk taking if you even know how to do it. You can buy the SPY at clearly high historical valuations just to get back half your former CD yield.
Excellent point. I really, really wanted to put my Emergency Fund into a CD Ladder* because they are so cool, but alas the interest rates just make it not worth it.
* If you don't know what a CD Ladder is, it is when presumably the longer the CD term, the better the rates are, and you put 1/5th of your money into a 1 year CD, 1/5th into a 2 year, 1/5th into a 3 year, 1/5th into a 4 year, and the remaining 1/5th into a 5 year. One year later, the 1 year CD comes due. If you need the money, great, it's there for you. If you don't, reinvest as a 5 year CD. Now every year, you have 1/5th of your money becoming available should you need it, but all of your money is eventually locked into the 5 year best rates.
******
On the biotech front, I have to admit I made a terrible mistake in selling LLY earlier this year, and I need to reacquire it asap. They have the only treatment for Alzheimer's Disease available, and the market is huge. It has already started to get very high, but I think there is tons of room to grow. And unlike Moderna, Eli Lilly is a DGI stock 
Posts: 6,404
Threads: 47
Joined: Aug 2018
Reputation:
68
(08-10-2021, 01:37 PM)ken-do-nim Wrote: (08-10-2021, 10:29 AM)fenders53 Wrote: Somewhat off topic but this zero interest rate thing is a double edged sword. It's probably responsible for the last 10-20% gain in our equity holdings. Imagine yourself a 70yr old retired woman. Your spouse just passed away and you have your SS, maybe half his pension, and that $100K you had in a CD that gave you a few hundred extra a month now gives you $20. It forces risk taking if you even know how to do it. You can buy the SPY at clearly high historical valuations just to get back half your former CD yield.
Excellent point. I really, really wanted to put my Emergency Fund into a CD Ladder* because they are so cool, but alas the interest rates just make it not worth it.
* If you don't know what a CD Ladder is, it is when presumably the longer the CD term, the better the rates are, and you put 1/5th of your money into a 1 year CD, 1/5th into a 2 year, 1/5th into a 3 year, 1/5th into a 4 year, and the remaining 1/5th into a 5 year. One year later, the 1 year CD comes due. If you need the money, great, it's there for you. If you don't, reinvest as a 5 year CD. Now every year, you have 1/5th of your money becoming available should you need it, but all of your money is eventually locked into the 5 year best rates.
******
On the biotech front, I have to admit I made a terrible mistake in selling LLY earlier this year, and I need to reacquire it asap. They have the only treatment for Alzheimer's Disease available, and the market is huge. It has already started to get very high, but I think there is tons of room to grow. And unlike Moderna, Eli Lilly is a DGI stock
Sometime well before you retire it is likely interest rates will rise enough for a ladder to work. Low rates put a stick in my wheel just before retirement. I had this plan where my retirement port would be simplified and all of it would provide a reasonable yield. I'll get to my destination but for now I just have to keep some bonds (ETFs) in short maturity or I'll get killed when rates rise a couple points. Maybe they won't rise but I'm not going to lose 10% on something that only yields 2%.
On a side note it's possible banks may be pressured to pay reasonable interest rates at some point. Paying 0.1% and loaning it out at 50 times that might be OK if the FED wasn't facilitating the game with monetary policy, but they are big time.
Posts: 1,631
Threads: 54
Joined: Oct 2020
Reputation:
6
Just for fun I went and checked my bank (Capital One) to see the current rates.
1 year CD: 0.20%
2 year CD: 0.25%
Savings: 0.40%
3 year CD: 0.60%
4 year CD: 0.65%
5 year CD: 0.80%
At least some of the rows are actually better than Savings; it hasn't been the case for a while.
Posts: 6,404
Threads: 47
Joined: Aug 2018
Reputation:
68
(08-10-2021, 02:55 PM)ken-do-nim Wrote: Just for fun I went and checked my bank (Capital One) to see the current rates.
1 year CD: 0.20%
2 year CD: 0.25%
Savings: 0.40%
3 year CD: 0.60%
4 year CD: 0.65%
5 year CD: 0.80%
At least some of the rows are actually better than Savings; it hasn't been the case for a while.
My mother is rolling one this month. She said she could get 1.75%. I know she has $15K but not sure how long the CD is. Sometimes they are short term at higher rates as they don't want to lock in.
|
