JEPI is beating both SPY and SCHD with dividends reinvested this year. I think there is a role for dividend funds that are low in volatility during more volatile times like now.
If you didn't say it I would have. This guy kind of missed the boat. With the S&P 500 PE ratio at historic highs the chance of the market, staying flat or trending down is high.. the specific area where he said this fund would do well.
Indeed, for the income investor like a retiree with a short horizon and/or who's withdrawing regularly, there may be a role for funds like these with a small allocation. Over the long term they are almost certainly suboptimal. YTD performance is of no concern to me right now in my own personal investing horizon. We'll see what the future holds.
And for people looking to add an income high yield component into their portfolio regardless of age. You can reinvest into jepi or put it into other funds or use the income in a high interest savings account at 4.05% through Wealthfront for a reserves account.
JEPI/JEPQ is about a quarter of my portfolio, reinvesting the dividends mostly into QQQ and VOO, I figure this way it gives me more money to buy dips and amplify dollar cost averaging. I'm also worried about a prolonged period of flat returns like in the 70's, so I figure it is a decent hedge in that situation.
I believe the S&P will tank some time in 2023. At that time I will assess JEPI's NAV and dividend payout. I've been watching this fund for the past couple years and think that it is a potentially great fund for income investors for the long haul.
I bought 100k if JEPI and I get +/-1000 a month and in use those funds to buy calls and play the market and pay for my car. So far I had it for a year and I love it. Idk why you say I ya not a good investment. I think I’m missing something. Maybe I need to speak to an advisor.
Hey Dan, thanks for the comment. If it's working for you and helping you stay the course, that's great! I think I spelled out my case for why I'm not a huge fan of these funds, but you may find some extra commentary in my recent blog post helpful in understanding my position on covered call ETFs: www.optimizedportfolio.com/covered-call-etfs/#conclusion-are-covered-call-etfs-a-good-investment
It is a bad idea to buy JEPI in a bear market since its upward potential is clipped by the call option, and it DOES NOT protect on the down side. Chasing yields is like chasing a mirage.
Not true, it's the opposite of what you're saying. I have 30% Jepi, 30% SCHD, 30% Apple and 10% Google. Almost everything goes down in a Bear Market or stays flat. Out of those 4 holdings, I have 150k in Jepi, and it's the only thing that is paying me 1,500 a month right now. The entire year is almost over, but I have an extra 16k do the position. You want Jepi in a Bear Market; it's called realized vs unrealized gains.
@@Particle_Ghost I do not agree. If the index JEPI uses rises, the call option will call it away. But if the index keeps dropping, there is no floor. You will not be able to take advantage of bear market rallies with JEPI and you pick up all the downside.
@@TeluguJhari Once again, the clear difference between realized versus unrealized gains. It's okay if you disagree, but I'll just keep getting paid, it's business as usual.
@@KungPowEnterFist Thank you for your reply. I could be wrong, but I don't think what you are saying is accurate. From my reading, it seems the ELNs have risks that those buying the ELNs could default or JPM could default. I will fully admit that I do not understand the ELNs very well, but they do have "counterparty risk." From the Summary Prospectus "In addition, since ELNs are in note form, ELNs are subject to certain debt securities risks, such as credit or counterparty risk. Should the prices of the underlying instruments move in an unexpected manner, the Fund may not achieve the anticipated benefits of an investment in an ELN, and may realize losses, which could be significant and could include the Fund’s entire principal investment. Investments in ELNs are also subject to liquidity risk, which may make ELNs difficult to sell and value. A lack of liquidity may also cause the value of the ELN to decline. In addition, ELNs may exhibit price behavior that does not correlate with the underlying securities. The Fund’s ELN investments are subject to the risk that issuers and/or counterparties will fail to make payments when due or default completely. Prices of the Fund’s ELN investments may be adversely affected if any of the issuers or counterparties it is invested in are subject to an actual or perceived deterioration in their credit quality."
@@johnblecha4428 I can't tell if this is sarcasm or not. If it is you may want to indicate that more clearly. If not, what specifically is misinformation? I literally quoted the Summary Prospectus...
I do own JEPI. I think it is a great dividend income covered call ETF. Yes, I do think income investing is important. I am not looking to avoid taxes, this is the best time to pay with all the inflation and possible increases in the coming future. The tax rate is only likely to increase. I would also prefer to have a lot of income to buy more shares of VOO with the dividend I make from income stocks. For example; Would you rather invest on a 50k per year income, or with a 60k annual income? Income investing increases your budget for stock investing (in my opion).
Not sure if you're retired or not, but the tax rate for most retirees - for whom this fund is probably most suitable - is much lower than when they were working. If you're not retired and you want more shares of VOO, buy more shares of it with your paycheck. As I've noted many times, it makes little sense to buy a covered call fund and then just reinvest its distributions. The situation you describe is simply mental accounting. Best of luck.
I want to stay in the market while the bear market continues and I find $JEPI to be a really good option since it protects me from volatility and it provides a monthly dividend. When I feel like we’ve hit bottom I can always sell JEPI and buy growth Feel free to give me some pointers… I’m probably missing something
JEPI does not "protect" from volatility. Market timing also tends to be more harmful than helpful; what will be your indicator for when you "feel like we've hit bottom?"
@@OptimizedPortfolio I’d say we hit bottom when the fed (U-Turns) and interest rates lower. When a company or fund that’s “too big to fail” collapses Or when real state hits the floor and funds start scooping up all the for closures I might not get the perfect bottom but I feel we have a lot more pain to go through it doesn’t feel that scary yet. And JEPI doesn’t have crazy swings even if the stock loses 10% of value the dividend will wash that and I would have money ready to be invested again. I’m not saying I’m right but I feel that’s what I’m comfortable with (there’s no safe investment rn)
@@OptimizedPortfolio people who work everyday in the market with the latest tools and research can't reliably tell you when the markets reaches a bottom or a top. Time is the best factor in successful investing.
What about using JEPI to pay down Mortgage? Maintain capital while hedging inflation with low interest debt? Also like your take on the Buy, borrow, die strategy. Thanks!
@@bighurtt terrible idea as if saving for retirement you do not at that time need an "income" etf .... when you retire you use your retirement account to purchase jepi and the n live of that income etc... Anyone saving for retirement in the future have no business buying jepi and if they do that they really have no clue about finance.
I find ESG to be rather pointless for investment. Id invest in sin stocks for a profit. And the 1% could care less. Even B.G. owns Berkshire halfway stock. Which the ETF owns Occidental Petroleum in its potfoilo.
I would rather the income and not just rely on growth hoping the market always goes up and even if the market goes up theirs not near the income that jepi generates. The dividends of voo are not anywhere near the yield of jepi.
I don’t know why this guy talks about JEPI or DIVO when he’s not even a dividend income investor. Life made easy is made with this ETF that brings cash flow or can be used as a long term blanket for retirement. Yes I think there are stocks in the S&P that are worth owning as they have more potential to grow, however, dividend income and reinvestment is the key to early retirement or more income. Just my opinion
Thanks for watching and for the comment, Kerry, but this is like saying you don't play football so you shouldn't be talking about the game on Saturday... And no, "dividend income and reinvestment," albeit arguably useful logistically, are not really the "key" to anything, particularly early retirement, in which case that likely just means a larger tax bill on the way there. I explained this idea in more detail here: www.optimizedportfolio.com/dividends/ If it works for you and allows you to stay invested more easily, go for it. Best of luck.
Covered calls convert spikes into income. I think it would require the right formulas by themselves. Dividend investing is the best long term due to compound interest. That is why I am in JEPI. But by itself it is not the best at it. I have 50% UUP, 20% JEPI and 30% SCHD for the compound entry point. Dividends get bought back and it goes right into it. Since they are trying to curb commodities through interest rates, it makes sense to own the index that tracks the value of the US dollar. Crypto is increasing the US dollar too due to stable coins as well as a spike in oil. SO owning an index of the US dollar makes sense and when it goes down, stocks tend to spike as well as bitcoin and QQQ. SO it is a perfect indicator for wealth. Compound interest is the value of JEPI but the objective can only be done as there is a cap in option premiums. It is what you go into in Market tops. and sell at market bottoms but it isn't the best asset for that. Market correlation with stocks and bonds have broken it in this environment and so there are a lot of unique strategies that have to be employed in order to hit the Fed pivot point. No one is buying calls when everyone thinks it is the new lehman bros. So this is a call option play and if there is a lot of call options being sold, then this works, but individual investors should be able to gain a lot of implied volatility protection from these and QYLD's and others security in options due to this. Bear market it outperforms and in a bull market it under performs. It isn't the best asset class though because their strategies are exploitable for traders who could easily time their trades accordingly in these large caps and get cheaper and less risky call options due to this. VIG is a far better and more stable income generator but the most important thing is that you want the lowest taxes possible and dividends don't do that. Capital gains does so that is the tax scheme that investors should focus on if they can but dividend is taxed for that very reason. If I were to create a financial product, it would be a compound interest fund where it is the SP500 but instead of gaining dividends the dividends are used to buyback and increase the holdings of said stocks in the portfolio. So like SCHD but it reinvests without the taxes that regular dividends create until a target date in the future where it will pay out the dividends at that date and beyond. ETFs need to be more focused on tax protections more so than that. JEPI's strategy of low volatility companies is what makes the dividend seem sustainable. The best way to profit too is to write a covered call for these types of companies and have it be the expiration on or near earnings and/or sell the option the day of earnings as option interest is at its highest during those times. That would seem to create the most value for that fund but I think their strategy is working well and it came out at a decent time. I would say this is perfect for income but not income growth as I think that amount will stay flat. SCHD would be the income growth so if you want 2% now annually or 8-10% now, it would make sense. I think this is perfect for income as like TLTW will likely be next year due to stagflation but who really buys options on TLT? I mean I guess it would be a good play for fed meetings. Especially when they finally pivot. I guarantee you options abound there.
Just to clarify, remember that covered calls cap the upside, so they quite literally mute "spikes," and the historical success of dividend investing seems to be rooted in providing naive exposure to equity risk factors like Value and Profitability; nothing to do with "compound interest." Stocks do not pay "interest," and share price compensates for dividend payments; they are not free money. I don't focus on yield and would rather simply sell shares as needed for "income," but I can see how yield-focused strategies appeal to retirees. Thanks for the thoughtful comment and for watching.
JEPI is beating both SPY and SCHD with dividends reinvested this year. I think there is a role for dividend funds that are low in volatility during more volatile times like now.
Agree.
If you didn't say it I would have. This guy kind of missed the boat. With the S&P 500 PE ratio at historic highs the chance of the market, staying flat or trending down is high.. the specific area where he said this fund would do well.
Indeed, for the income investor like a retiree with a short horizon and/or who's withdrawing regularly, there may be a role for funds like these with a small allocation. Over the long term they are almost certainly suboptimal. YTD performance is of no concern to me right now in my own personal investing horizon. We'll see what the future holds.
@@OptimizedPortfolio in the long run jepq still beats voo and schd by a mile. With drip. Jepq outperforms voo. 1k shares give you insane dividends.
@@Fumbiii16 JEPQ launched 5 months ago...
Good video- refreshing perspective. An actual review
Thanks!
I like and have both JEPI and DIVO and SCHD. I use it now to pay bills and for living expenses. They are good for retirees.
Thanks for sharing!
And for people looking to add an income high yield component into their portfolio regardless of age. You can reinvest into jepi or put it into other funds or use the income in a high interest savings account at 4.05% through Wealthfront for a reserves account.
I love Jepi and divo, but i am retiring in 5 years so i am bumping my income as much as i can without compromising the original capital
Thanks for watching!
JEPI/JEPQ is about a quarter of my portfolio, reinvesting the dividends mostly into QQQ and VOO, I figure this way it gives me more money to buy dips and amplify dollar cost averaging. I'm also worried about a prolonged period of flat returns like in the 70's, so I figure it is a decent hedge in that situation.
Great strategy. I'm doing this same
I'm doing this exact strategy, plus my wife income is commission based so it's nice to know there's a monthly income coming in, if needed
Thanks for sharing!
I believe the S&P will tank some time in 2023. At that time I will assess JEPI's NAV and dividend payout. I've been watching this fund for the past couple years and think that it is a potentially great fund for income investors for the long haul.
Thanks for the comment, Pete.
Thank you! Very informative video!
Thanks, Theo!
Is it better than the traditional 60/40? Cant compare to SPY, but I dont need it for that....
Two completely different things.
Doesn't it outperform S&P when you reinvest the dividends?
It hasn't so far.
@@OptimizedPortfolio thank you :)
I bought 100k if JEPI and I get +/-1000 a month and in use those funds to buy calls and play the market and pay for my car. So far I had it for a year and I love it. Idk why you say I ya not a good investment. I think I’m missing something. Maybe I need to speak to an advisor.
Hey Dan, thanks for the comment. If it's working for you and helping you stay the course, that's great! I think I spelled out my case for why I'm not a huge fan of these funds, but you may find some extra commentary in my recent blog post helpful in understanding my position on covered call ETFs: www.optimizedportfolio.com/covered-call-etfs/#conclusion-are-covered-call-etfs-a-good-investment
I own JEPI, JEPQ, QYLD, DIVO, DJIA, NUSI & SCHD.
I own all these but DJIA. I am looking for an opportunity to dump NUSI and buy more RYLD or XMRI. I need the income for retirement
Thanks for sharing, Jack!
It is a bad idea to buy JEPI in a bear market since its upward potential is clipped by the call option, and it DOES NOT protect on the down side. Chasing yields is like chasing a mirage.
Same question
Not true, it's the opposite of what you're saying. I have 30% Jepi, 30% SCHD, 30% Apple and 10% Google. Almost everything goes down in a Bear Market or stays flat. Out of those 4 holdings, I have 150k in Jepi, and it's the only thing that is paying me 1,500 a month right now. The entire year is almost over, but I have an extra 16k do the position. You want Jepi in a Bear Market; it's called realized vs unrealized gains.
@@Particle_Ghost I do not agree. If the index JEPI uses rises, the call option will call it away. But if the index keeps dropping, there is no floor. You will not be able to take advantage of bear market rallies with JEPI and you pick up all the downside.
@@TeluguJhari Once again, the clear difference between realized versus unrealized gains. It's okay if you disagree, but I'll just keep getting paid, it's business as usual.
@@Particle_Ghost As I explained, remember you're not getting anything "extra" and that "income" is just mental accounting.
I think any discussion of JEPI should include talk about their ELNs and the potential risks that come with them.
Good point
The risk with ELN's are that the US Government will default on its debt. JEPI selling off will be the least of your problems in that case.
@@KungPowEnterFist Thank you for your reply. I could be wrong, but I don't think what you are saying is accurate. From my reading, it seems the ELNs have risks that those buying the ELNs could default or JPM could default. I will fully admit that I do not understand the ELNs very well, but they do have "counterparty risk."
From the Summary Prospectus
"In addition, since ELNs are in note form, ELNs are subject to certain debt securities risks, such as credit or counterparty risk. Should the prices of the underlying instruments move in an unexpected manner, the Fund may not achieve the anticipated benefits of an investment in an ELN, and may realize losses, which could be significant and could include the Fund’s entire principal investment. Investments in ELNs are also subject to liquidity risk, which may make ELNs difficult to sell and value. A lack of liquidity may also cause the value of the ELN to decline. In addition, ELNs may exhibit price behavior that does not correlate with the underlying securities. The Fund’s ELN investments are subject to the risk that issuers and/or counterparties will fail to make payments when due or default completely. Prices of the Fund’s ELN investments may be adversely affected if any of the issuers or counterparties it is invested in are subject to an actual or perceived deterioration in their credit quality."
@@johnblecha4428 I can't tell if this is sarcasm or not. If it is you may want to indicate that more clearly.
If not, what specifically is misinformation?
I literally quoted the Summary Prospectus...
Is jepi dividends qualified?
No
Any covered calls options ETFs do not seem like good investments. If they are, why haven't they been popular in the past?
I agree, Louis, at least for young investors with a long time horizon. But in fairness, this type of product has only existed for about 9 years.
I do own JEPI. I think it is a great dividend income covered call ETF. Yes, I do think income investing is important. I am not looking to avoid taxes, this is the best time to pay with all the inflation and possible increases in the coming future. The tax rate is only likely to increase. I would also prefer to have a lot of income to buy more shares of VOO with the dividend I make from income stocks. For example; Would you rather invest on a 50k per year income, or with a 60k annual income? Income investing increases your budget for stock investing (in my opion).
Not sure if you're retired or not, but the tax rate for most retirees - for whom this fund is probably most suitable - is much lower than when they were working. If you're not retired and you want more shares of VOO, buy more shares of it with your paycheck. As I've noted many times, it makes little sense to buy a covered call fund and then just reinvest its distributions. The situation you describe is simply mental accounting. Best of luck.
Jepi sounds awesome!
Thanks for watching, Brett!
I want to stay in the market while the bear market continues and I find $JEPI to be a really good option since it protects me from volatility and it provides a monthly dividend. When I feel like we’ve hit bottom I can always sell JEPI and buy growth
Feel free to give me some pointers… I’m probably missing something
JEPI does not "protect" from volatility. Market timing also tends to be more harmful than helpful; what will be your indicator for when you "feel like we've hit bottom?"
@@OptimizedPortfolio
I’d say we hit bottom when the fed (U-Turns) and interest rates lower.
When a company or fund that’s “too big to fail” collapses
Or when real state hits the floor and funds start scooping up all the for closures
I might not get the perfect bottom but I feel we have a lot more pain to go through it doesn’t feel that scary yet.
And JEPI doesn’t have crazy swings even if the stock loses 10% of value the dividend will wash that and I would have money ready to be invested again.
I’m not saying I’m right but I feel that’s what I’m comfortable with (there’s no safe investment rn)
@@OptimizedPortfolio people who work everyday in the market with the latest tools and research can't reliably tell you when the markets reaches a bottom or a top. Time is the best factor in successful investing.
@@skipperx5116 Agreed
JEPI is even better in a Roth account , no taxes when you use it for income.
Thanks for watching!
What about using JEPI to pay down Mortgage? Maintain capital while hedging inflation with low interest debt?
Also like your take on the Buy, borrow, die strategy. Thanks!
May be worthwhile.
@OptimizedPortfolio just a strategy we have been talking about 👍
Is the fact that income is mostly ordinary..... a bad thing for retiree
That's why you buy it in a retirement account, not a taxable account.
@@bighurtt terrible idea as if saving for retirement you do not at that time need an "income" etf .... when you retire you use your retirement account to purchase jepi and the n live of that income etc... Anyone saving for retirement in the future have no business buying jepi and if they do that they really have no clue about finance.
I find ESG to be rather pointless for investment. Id invest in sin stocks for a profit. And the 1% could care less. Even B.G. owns Berkshire halfway stock. Which the ETF owns Occidental Petroleum in its potfoilo.
Agreed
This stock is good for people who are going to retire soon
Maybe. Maybe not. In any case, JEPI is a fund, not a stock.
I own JEPI 😁
Thanks for watching!
It looks like JEPI dividend fluctuates alot
Indeed
Seems better than QYLD because the QYLD dividends keep decreasing. But, no, I don't own either one.
QYLD is trash, who cares if you get 14% annually if it’s perpetually losing value
Thanks for watching!
These covered calls options ETFs should be treated like annuities. At least you can get your money back
Thanks for watching!
I would rather the income and not just rely on growth hoping the market always goes up and even if the market goes up theirs not near the income that jepi generates. The dividends of voo are not anywhere near the yield of jepi.
As explained, JEPI still relies on the market going up ("growth") over the long term, and "income" and dividends are just mental accounting.
I don’t know why this guy talks about JEPI or DIVO when he’s not even a dividend income investor. Life made easy is made with this ETF that brings cash flow or can be used as a long term blanket for retirement. Yes I think there are stocks in the S&P that are worth owning as they have more potential to grow, however, dividend income and reinvestment is the key to early retirement or more income. Just my opinion
Thanks for watching and for the comment, Kerry, but this is like saying you don't play football so you shouldn't be talking about the game on Saturday...
And no, "dividend income and reinvestment," albeit arguably useful logistically, are not really the "key" to anything, particularly early retirement, in which case that likely just means a larger tax bill on the way there. I explained this idea in more detail here: www.optimizedportfolio.com/dividends/
If it works for you and allows you to stay invested more easily, go for it. Best of luck.
I was interested in JEPI until the ESG nonsense
what is ESG
@@bluesky5587 Environmental, Social, and Governance. www.optimizedportfolio.com/esg-investing/
ESG is very vague. BP meets ESG standards very well. So I hope you’re catching my drift here
PBR !
I don't think bonds are worth our time either.
Why's that?
Covered calls convert spikes into income. I think it would require the right formulas by themselves. Dividend investing is the best long term due to compound interest. That is why I am in JEPI. But by itself it is not the best at it. I have 50% UUP, 20% JEPI and 30% SCHD for the compound entry point. Dividends get bought back and it goes right into it. Since they are trying to curb commodities through interest rates, it makes sense to own the index that tracks the value of the US dollar. Crypto is increasing the US dollar too due to stable coins as well as a spike in oil. SO owning an index of the US dollar makes sense and when it goes down, stocks tend to spike as well as bitcoin and QQQ. SO it is a perfect indicator for wealth. Compound interest is the value of JEPI but the objective can only be done as there is a cap in option premiums. It is what you go into in Market tops. and sell at market bottoms but it isn't the best asset for that. Market correlation with stocks and bonds have broken it in this environment and so there are a lot of unique strategies that have to be employed in order to hit the Fed pivot point. No one is buying calls when everyone thinks it is the new lehman bros. So this is a call option play and if there is a lot of call options being sold, then this works, but individual investors should be able to gain a lot of implied volatility protection from these and QYLD's and others security in options due to this. Bear market it outperforms and in a bull market it under performs. It isn't the best asset class though because their strategies are exploitable for traders who could easily time their trades accordingly in these large caps and get cheaper and less risky call options due to this. VIG is a far better and more stable income generator but the most important thing is that you want the lowest taxes possible and dividends don't do that. Capital gains does so that is the tax scheme that investors should focus on if they can but dividend is taxed for that very reason. If I were to create a financial product, it would be a compound interest fund where it is the SP500 but instead of gaining dividends the dividends are used to buyback and increase the holdings of said stocks in the portfolio. So like SCHD but it reinvests without the taxes that regular dividends create until a target date in the future where it will pay out the dividends at that date and beyond. ETFs need to be more focused on tax protections more so than that. JEPI's strategy of low volatility companies is what makes the dividend seem sustainable. The best way to profit too is to write a covered call for these types of companies and have it be the expiration on or near earnings and/or sell the option the day of earnings as option interest is at its highest during those times. That would seem to create the most value for that fund but I think their strategy is working well and it came out at a decent time. I would say this is perfect for income but not income growth as I think that amount will stay flat. SCHD would be the income growth so if you want 2% now annually or 8-10% now, it would make sense. I think this is perfect for income as like TLTW will likely be next year due to stagflation but who really buys options on TLT? I mean I guess it would be a good play for fed meetings. Especially when they finally pivot. I guarantee you options abound there.
Just to clarify, remember that covered calls cap the upside, so they quite literally mute "spikes," and the historical success of dividend investing seems to be rooted in providing naive exposure to equity risk factors like Value and Profitability; nothing to do with "compound interest." Stocks do not pay "interest," and share price compensates for dividend payments; they are not free money. I don't focus on yield and would rather simply sell shares as needed for "income," but I can see how yield-focused strategies appeal to retirees. Thanks for the thoughtful comment and for watching.
@@OptimizedPortfolio thanks for your input.