Thanks for watching! Here are some follow-up videos: Three-Fund Portfolio [The BEST Portfolio!] ruclips.net/video/R81Z-obeB3s/видео.html Asset Allocation Explained [Modern Portfolio Theory]: ruclips.net/video/QTgvWPAihIc/видео.html Investment Risk Tolerance Explained: ruclips.net/video/upI3bpHXAdY/видео.html Should You Invest in International Stocks? ruclips.net/video/vd_KcudZo3U/видео.html
I own all three funds QYLD; JEPI and NUSI. They are part of other investments which include growth stocks, dividend growth stocks and international stocks. I am 82 years old and enjoy the income of these call option holdings. They would never be 100% of my portfolio. I am also more heavily invested in real estate income producing properties. Your points are well taken and are relevant to someone building their investments.
Thanks for sharing Clifford! It sounds like you have a solid portfolio and are a successful investor. It seems reasonable to me to have some exposure to such funds if you like the income. I've been thinking about getting into RE investing. I bought a house that can cash flow near Seattle (east side) and am living in it. I am thinking about buying another to move into with owner financing and renting this one. How have your properties been doing for you?
Great video! Let me know if you ever want to do a livestream on my channel or yours together. I'm getting a Boglehead vibe, which is nice (but rare) on RUclips.
Here’s the secret: Holding a fund like QQQ isn’t going to pay your bills. Your capital gains mean squat to the handyman fixing your sink. The solution is to hold both in various ratios depending on your income needs. Also when your are like 82 and there is a market crash you won’t have time to wait for the recovery, you will be forced to sell your shares at a loss just to cover your expenses. Total return isn’t everything.
Hi Dominik, at 15:52 I show an alternate portfolio that takes equal distributions from the portfolio. This alternate portfolio delivered a better return with less risk over the time period. A market crash will most likely affect QYLD similarly, but there haven't been prolonged market crashes to compare against. In any event, the future may differ from the past, but a portfolio consisting of stocks/bonds can deliver comparable monthly income. Thanks for watching!
@@nickdoyle-achievefinancial2464 I know, the 4% rule. It means you’re selling off your portfolio for 25 years after which there is nothing left. Income funds can (theoretically) go on indefinitely if the cost basis is low enough. You never sell and can give the portfolio to your children so they can build up even more income. I agree, QYLD should not be your only holding and there are better income vehicles out there. My personal preference is a mix of dividend growth like SCHD and immediate income like these funds. But I would never bet the farm on pure growth just for a possible higher total return. Markets can stay flat or even decline for a very long time.
Nick, you had quite a lot to say about the YLD funds, but NUSI still seems like a pretty solid fund. Can you be more specific regarding why it isn’t? 🤔
NUSI is fairly new, but I believe it will have similar characteristics to the other covered call funds (with exception of the puts, which will usually expire worthless and once in a while pay off - no free lunch, this is priced in). NUSI has a very high expense ratio, constantly trades options which will have many trading fees that don't show up in the expense ratio, and exposure to active management (80%+ of which underperform the market). In general, I don't believe options strategies add value to a long term investor. If they did, you would see more active management outperforming index funds. The funds surely offer some degree of less risky investment approach (capping upside and downside) with a currently high dividend. However, I believe a three-fund portfolio with comparable risk measures will be more efficient, with better risk-adjusted returns. Surely I could be wrong, but you're fighting an uphill battle of fees and active management with covered call / options collar funds. Thanks for watching and sorry my thoughts on the YLD alternatives weren't as detailed.
@@nickdoyle-achievefinancial2464 I do take your point regarding the uncertainty of the option strategy as a tool to add value over the long haul. The thing I’m the most keen on NUSI for is the built in down side protection coupled with a pretty solid dividend. I’m not saying that it performs flawlessly when the market is red, but I have seen it perform as well as any bond or gold fund. I’m curious to know if you favor a more tried and true method to achieve down side protection, or is it just par for the course with you? I’m aware the three fund portfolio has the bond component for the record. I suppose you might argue that this is all the protection investors would need. I just thought I’d ask you directly. For clarity’s sake you usually provide pretty solid financial information and I definitely value your opinion on the matter. I am subscribed to your channel and I regularly “smash” the thumbs up button for the RUclips algorithm as you suggest. 😏
The downside protection in NUSI does seem attractive. I do tend to think the more traditional way of de-risking, with bonds, will be more efficient. However, both strategies could be successful. If you like the fund and it makes you feel more comfortable, that may be worth more than a possible marginal increase in efficiency. Sticking with your investment plan and risk tolerance is more important. Thanks for your support, I appreciate it! 😀
This video is another growth is better than income argument. Clearly you do not understand the role of these income etfs which is high CURRENT income. For older folks needing money for bills to pay every month focusing on potential growth over the next ten years is not the most rational thing to do. People have been conditioned to expect the same returns we have been having in this crazy bull market forever. The reality is that the long term average market returns are actually less than the yield of QYLD.
Hi Joseph, I made the argument that one should look at the overall risk and return characteristics of their portfolio, instead of optimizing purely for a monthly dividend. Starting at 14:05 I said "I think it's a mistake .. for a retiree to have such a high exposure to stocks, especially a concentrated bet on innovation. If you spent decades working to finally retire, you don't need to take on so much risk." so I agree with much of your point. The alternative I showed at 15:58 delivered a better risk adjusted return than QYLD since 2014, with equivalent monthly distributions. The future may be different from the past, but I don't agree that QYLD is a free lunch with returns in excess of the market long term. Thanks for watching!
I like most of your videos, but I think you need to do a bit more study on covered call ETFs, Nusi is more of a bond replacement. It attempts to cap the up and downside to 10% , while earning a big dividend; thus, good for retirees who don't want to sell their holdings. Jepi has downside protection, through a very sophisticated means. When we take a 50% hit, your comparisons just might fall apart. I hold both index and covered call ETFs. VOO and VTI are fine, but I don't want all of my money there. I am retired, and have plenty of time to study the market. (And since am forced to withdraw from my IRA, I am reinvesting it all, since I don't need the income). I have made a lot of money by swing trading, so our philosophy is quite different, but I think we will both do well Good luck, and take care.
Thanks for the feedback Bob, I appreciate it! There are certainly characteristics that can be attractive to a retiree. I think there is extra uncompensated risk in these funds (equities have historically offered the best risk-adjusted return), but time will tell. At least most people aren't going all-in and hold them as part of a broadly diversified portfolio, so they will likely be successful regardless. Best wishes!
![Why I Am Not a Dividend Investor [SCHD ETF Analysis]](/img/1.gif)
Thanks for watching! Here are some follow-up videos:
Three-Fund Portfolio [The BEST Portfolio!] ruclips.net/video/R81Z-obeB3s/видео.html
Asset Allocation Explained [Modern Portfolio Theory]: ruclips.net/video/QTgvWPAihIc/видео.html
Investment Risk Tolerance Explained: ruclips.net/video/upI3bpHXAdY/видео.html
Should You Invest in International Stocks? ruclips.net/video/vd_KcudZo3U/видео.html
I own all three funds QYLD; JEPI and NUSI. They are part of other investments which include growth stocks, dividend growth stocks and international stocks. I am 82 years old and enjoy the income of these call option holdings. They would never be 100% of my portfolio. I am also more heavily invested in real estate income producing properties. Your points are well taken and are relevant to someone building their investments.
Thanks for sharing Clifford! It sounds like you have a solid portfolio and are a successful investor. It seems reasonable to me to have some exposure to such funds if you like the income. I've been thinking about getting into RE investing. I bought a house that can cash flow near Seattle (east side) and am living in it. I am thinking about buying another to move into with owner financing and renting this one. How have your properties been doing for you?
Great video! Let me know if you ever want to do a livestream on my channel or yours together. I'm getting a Boglehead vibe, which is nice (but rare) on RUclips.
Excellent video; very informative. I learned a lot from this video. Thank you so much Nick.
Glad you learned something, thanks for watching!
Here’s the secret: Holding a fund like QQQ isn’t going to pay your bills. Your capital gains mean squat to the handyman fixing your sink. The solution is to hold both in various ratios depending on your income needs. Also when your are like 82 and there is a market crash you won’t have time to wait for the recovery, you will be forced to sell your shares at a loss just to cover your expenses. Total return isn’t everything.
Hi Dominik, at 15:52 I show an alternate portfolio that takes equal distributions from the portfolio. This alternate portfolio delivered a better return with less risk over the time period. A market crash will most likely affect QYLD similarly, but there haven't been prolonged market crashes to compare against. In any event, the future may differ from the past, but a portfolio consisting of stocks/bonds can deliver comparable monthly income. Thanks for watching!
@@nickdoyle-achievefinancial2464 I know, the 4% rule. It means you’re selling off your portfolio for 25 years after which there is nothing left. Income funds can (theoretically) go on indefinitely if the cost basis is low enough. You never sell and can give the portfolio to your children so they can build up even more income. I agree, QYLD should not be your only holding and there are better income vehicles out there. My personal preference is a mix of dividend growth like SCHD and immediate income like these funds. But I would never bet the farm on pure growth just for a possible higher total return. Markets can stay flat or even decline for a very long time.
Good job thanks
Thanks for watching Ebrahim!
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You're welcome, thanks for watching!
@@nickdoyle-achievefinancial2464 anytime
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Nick, you had quite a lot to say about the YLD funds, but NUSI still seems like a pretty solid fund.
Can you be more specific regarding why it isn’t? 🤔
Nusi is the only one I'm buying, would love to hear his reasons for why it is bad as well.
NUSI is fairly new, but I believe it will have similar characteristics to the other covered call funds (with exception of the puts, which will usually expire worthless and once in a while pay off - no free lunch, this is priced in). NUSI has a very high expense ratio, constantly trades options which will have many trading fees that don't show up in the expense ratio, and exposure to active management (80%+ of which underperform the market). In general, I don't believe options strategies add value to a long term investor. If they did, you would see more active management outperforming index funds. The funds surely offer some degree of less risky investment approach (capping upside and downside) with a currently high dividend. However, I believe a three-fund portfolio with comparable risk measures will be more efficient, with better risk-adjusted returns. Surely I could be wrong, but you're fighting an uphill battle of fees and active management with covered call / options collar funds. Thanks for watching and sorry my thoughts on the YLD alternatives weren't as detailed.
@@nickdoyle-achievefinancial2464 I do take your point regarding the uncertainty of the option strategy as a tool to add value over the long haul.
The thing I’m the most keen on NUSI for is the built in down side protection coupled with a pretty solid dividend. I’m not saying that it performs flawlessly when the market is red, but I have seen it perform as well as any bond or gold fund.
I’m curious to know if you favor a more tried and true method to achieve down side protection, or is it just par for the course with you? I’m aware the three fund portfolio has the bond component for the record. I suppose you might argue that this is all the protection investors would need. I just thought I’d ask you directly.
For clarity’s sake you usually provide pretty solid financial information and I definitely value your opinion on the matter.
I am subscribed to your channel and I regularly “smash” the thumbs up button for the RUclips algorithm as you suggest. 😏
The downside protection in NUSI does seem attractive. I do tend to think the more traditional way of de-risking, with bonds, will be more efficient. However, both strategies could be successful. If you like the fund and it makes you feel more comfortable, that may be worth more than a possible marginal increase in efficiency. Sticking with your investment plan and risk tolerance is more important. Thanks for your support, I appreciate it! 😀
This video is another growth is better than income argument. Clearly you do not understand the role of these income etfs which is high CURRENT income.
For older folks needing money for bills to pay every month focusing on potential growth over the next ten years is not the most rational thing to do.
People have been conditioned to expect the same returns we have been having in this crazy bull market forever. The reality is that the long term average market returns are actually less than the yield of QYLD.
Hi Joseph, I made the argument that one should look at the overall risk and return characteristics of their portfolio, instead of optimizing purely for a monthly dividend. Starting at 14:05 I said "I think it's a mistake .. for a retiree to have such a high exposure to stocks, especially a concentrated bet on innovation. If you spent decades working to finally retire, you don't need to take on so much risk." so I agree with much of your point. The alternative I showed at 15:58 delivered a better risk adjusted return than QYLD since 2014, with equivalent monthly distributions. The future may be different from the past, but I don't agree that QYLD is a free lunch with returns in excess of the market long term. Thanks for watching!
I like most of your videos, but I think you need to do a bit more study on covered call ETFs, Nusi is more of a bond replacement. It attempts to cap the up and downside to 10% , while earning a big dividend; thus, good for retirees who don't want to sell their holdings. Jepi has downside protection, through a very sophisticated means. When we take a 50% hit, your comparisons just might fall apart. I hold both index and covered call ETFs. VOO and VTI are fine, but I don't want all of my money there. I am retired, and have plenty of time to study the market. (And since am forced to withdraw from my IRA, I am reinvesting it all, since I don't need the income). I have made a lot of money by swing trading, so our philosophy is quite different, but I think we will both do well Good luck, and take care.
Thanks for the feedback Bob, I appreciate it! There are certainly characteristics that can be attractive to a retiree. I think there is extra uncompensated risk in these funds (equities have historically offered the best risk-adjusted return), but time will tell. At least most people aren't going all-in and hold them as part of a broadly diversified portfolio, so they will likely be successful regardless. Best wishes!
Bob, seems you are taking a lot of risk.