High Yield ETFs - Truths, Lies, And VDs
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- Опубликовано: 18 июн 2024
- As always, nothing I say is financial advice, nor am I a financial adviser. Do your own research and invest wisely. This is just me sharing my opinions and thoughts.
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I took a position with TSLY and CRSH. Here is my concern. The day the stocks go Ex-dividend they drop instantly by the amount of the div. Even through the two balance themselves out on the day-to-day swings intrinsically, do they still have the ability to balance out the NAV erosion of the div payment? I'm not sure it's as good as it seems. Hoping it works out. We'll see. I am happy with the results of AMZY.
No. Both CRSH and TSLY will have NAV erosion like they all will. These funds are for cash flow, not growth. The point of CRSH is to keep the dividend yield steady, not protect the NAV erosion.
ULTY NAV has been an absolute brick even with that yield!
Check out the above DOOrGunner !
Ethan, thank you for all the information that you provide to us. This is my first bull run and I do plan on converting funds into ETFs.. along with your information and homework on my end, I hope to make some wise investments
Ethan, but even if they're not getting their initial return in 2 years, they're still eventually getting all their initial return eventually once they have reached the amount they spent on the fund. Income funds aren't for growth of return, but for current income.
Spot on!
Does this guy realize you pay capital gains taxes!? Nothing is tax free. Weak argument.
Also, highest federal tax bracket is 37%. It's a huge exaggeration to use 50% tax. Effective rates please!
I totally agree and after that it's free money
Another hater who doesn't understand the logic.
Good info, thanks and Happy Holidays
So happy to find your channel. You're the realist one I've found in years on RUclips. I was sold on ulty and now my blood pressure is up watching it like a baby with asthma.
A lot of these guys are saying they don't care about the NAV, that is your Net Worth gentlemen! And someone who is financially responsible partly bases purchases (especially luxuries i.e. vehicles) in relation to their net worth. Not very smart!
I hear you but, their view is seeing it as income and when we discuss a persons income, it is generally spoken of as the gross amount because of the uniqueness of everyone’s situation. I believe this is why they state it as they do.
NVDY im in
Ethan I would like to thank you for all of your great content and wisdom you share with the community. You are an asset! As far as these high yield ETFs I agree with you 100%. I believe they are garbage. Your point regarding taxes is spot on. Also to consider is the declining dividends. Most of these ETFs have dividend erosion in addition to NAV. Tsly for example has a $2.00 dividend at first and now is down to $.65. Plus add in a reverse split and your shares being cut in half it actually may take 6 to 8 years to recover. These ETFs are a total scam.
The dividend bull hands down is the best when it comes to high yielding investment. His videos are excellent.
Do your research and don't believe everything you hear. Your goals and strategies are personal... there's no ine size fits all. And BTW, leave taxes out of it. You make money, you pay taxes...
Taxes are always a consideration, it can really help if you find a good balance of investing in tax advantages accounts like a ROTH IRA, Traditional IRA, HSA or 401k so that you have different buckets to pull from at retirement. Regular taxable brokerage accounts are still needed so that you have some funds available before retirement age but all to often people don't take advantage of wealth building with tax advantaged accounts. Even for taxable accounts, if you never sell your holdings you never have to pay taxes, worst case just borrow against the holdings you have and generally the interest payments are cheaper than paying taxes on realized gains.
You are correct. Thank you for making this video. I pay taxes too and I’m getting tired of this BS with high yield ETFs.
Qdte and xdte have had a stable nav too bc Nvidia has been lifting up the market and it pays every week so it doesn’t devastate the nav with a monthly payment dip.
I’m so far very happy with Q and XDTE, adding to my positions regularly. Only defiance fund I’m in and like is SPYT
In: TSLY, TSLP, CRSH, AMZY, NVDY, SVOL,MSFO, YMAX and MAG, CLM, CRF, (drips at NAV) FEPI, AIPI, QQQI, SPYI, AMZP, GOOP, and a few others and other closed end funds. Two of my best performing closed end funds have been NBXG and SRV
It was a buying opportunity for BCHG and LTCN yesterday. Will buy more if we go lower and you are 100% correct with these high yielding ETFs. I never bought into them due to NaV erosion. Thanks for the videos. Keep them coming
Hey Ethan, I wanted to ask you, why don't you put your stocks in a Wyoming LLC instead of individual to deter anybody from trying to sue you and also so if anybody tries to sue you it will be more difficult?
Personally there’s only two of these YieldMax funds I would consider holding, AMZY and MSFO. My go-to funds are SPYI and QQQI though.
TSLY and CRSH share same problem - NAV erosion is real for both as they aren't able to recover their ex-dividend drop fully due to the capping of gains and they each participate in most of the capital losses when the underlying goes against them. So when TSLY is down due to TSLA going down, CRSH won't increase enough to offset that, and vice versa.
Right on Ethan. I tried the IWMY, JEPY, and QQQY ETFs by Defiance and loved the monthly dividends but soon realized that I was losing overall. I got out but it sure cost me. Keep the great videos coming.
what about cony after Aug. or sept? You will be getting free shares and free div. forever even after taxes
Dude! Hahaha…spot on funny video! You know what else is stupid? Buying a HY ETF because it pays week 3? Dumb!
Seriously... if you pay your bills monthly you should always have a buffer of money in your checking account so that getting paid weekly should never be a factor. Why pick worse investments just to get paid at a different time of the month, crazy!
This is not stupid. The point is to not have to wait an entire month when you need money fast. The purpose of YIELDMAX is "income". So you don't sell the shares, you live off the dividends.
@@ElCangri137 so you’d buy an ETF because it pays week 3 at 10%? Dumb!
@@Chris-ew9mh fact!
@@ElCangri137 If you are living paycheck to paycheck probably worrying about when you get paid in a month is less important than getting a 3 month buffer of cash in your checking account. People need to get their lives in order! 🤬
Nice update Boss! Thanks what about YMAX?
Hello Ethan! You inspired me to reconsider even continuing to build my CONY position and reallocating those funds, are there any YieldMax funds you’d feel are safe to hold for years? I heard you mention liking MSFO etc.
Thank you Ethan
Great video Brother Ethan , I had been wondering about this since your Sandwich video . I like to study long and hard and well in advance so that when the time comes , I don't have stop and figure it out ! Have a Blessed Day ! Just a guy on an island ! BTW , I would not be watching all of your videos if you bought a bunch of Lamborghini's !
Your spot on as usual ethan
You are Right. No One talks about the TAXES!!! That's why when I go into the high yield funds the dividends will only come from my Roth IRA.
Most people who I've seen talk about them say to pay your taxes. I've seen quite a few people make tax specific videos
Get'em Ethan! I'm with you. Always...what's the bottom line (after all expenses and taxes).
Great video
Also, these vehicles are not for growth … I have put together a small “High-Yield” ETF portfolio to be akin to an annuity for an income vehicle during my retirement. For that it works, IMHO 😊
This is why i went into grayscale. In Aus we have great dividends on the Asx,
Or may look at property,,,
But lets see next year, after us stock data Does the US have franking credits? In Aus uts great for tax
What about SPYT?
In Canada there is the RRSP where all dividends and gains are tax-free until you decide down the road to take money out. SO that's a good way of doing high yield funds.
It's even higher taxes in countries outside the US. We get double taxed on some stocks. Luckily most countries have a "Tax agreement" with the US so for dididends from ETFs located in the US we pay 15% tax in the US but another x amount when we get the money into ours brokage account. Like in Denmark we have a 27/42% tax depending on the amount you've earn from stock in a year. Anything earned below ~ $8700 is taxed 27% where everything above that to the end of the year is taxed 42%. So having 300 shares of CONY will yield around that amount before taxes. If you have other stocks besides that the yield will be significantly lowered when you hit that $8700 mark.
I got out of ETFs like TSLY, ULTY, and the defiance ETFs because of this. I may consider them in an IRA where you're not taxed on the distributions. Right now I have a little in SVOL, FEPI, and YMAX. I'm still in CONY and plan to be out of CONY next year, but I have limit orders on my shares so if it spikes I can hopefully make some profit.
You are correct
so u dont pay taxes normally? huh?
QDTE and XDTE have been performing pretty well and their index options are taxed better from what I understand.
Sounds like you should move into a better tax situation. Fair points though, but there are ways to make it work.
I would take 7% 6% all day.
Down on us and not in a good way 😂😂😂
I wonder how you would do if you went opposite options strategy on these ETF’s over the same time period.
That’s probably what they’re doing with these synthetic ETF’s. I tried these a few years ago with LABD & LABU . Even going in on both, it’s hard to get profits.
Go FEPI, AMZY, SPYT
Excellent choices along with Q and XDTE
You can protect yourself by taking distribution cash and buying puts to be consistently lowering your cost basis
What are taxes for Grayscale gains ?
Yes, exactly. I can't believe the RUclipsrs talking up Defiance as if they're so great because they're based on the indexes. They truly don't know what the hell they are talking about or understand the strategy. The chart tells me all I need to know. I take a small position on every single fund when it first comes out, if it starts losing, I sell it. If it starts winning, I buy a little more. Simple. I agree about CONY, but what do you think about hedging with puts on COIN? I figure you can own a lot of CONY and hedge with just a few puts on COIN.
In Canada we have a product called a TFSA { tax free savings account.}
Within the fund you can hold anything you want Gains and dividends are tax free even when you take money out .
Just take into consideration the 15% witholding tax on these funds held in TFSA
Good points. What I hear from people, it is more about the cash flow than about NAV. The danger obviously is if the ETF closes down, liquidates, what have you.
Truth
You also can look at you can take your dividend from you high yield, and in invest in ( pep) or (jnj). Don't forget the buy low and sell high? Have fun. Keep it simple.
NVDX and OAKMX are the moves after LTCN moves
I think at the end if the day the people that are attracted ro these super high yield etfs are ones that dont have enough money to live if they used traditional etfs. Someone in your situation what is the point...use a buy and hold strategy, if your use dividends have qualified etfs. This will help you to stay in a lower tax bracket.
Another strategy the suoer rich use is buy borrow die strategy...
One of the biggest LIES is people are telling others you get double the dividend when a Reverse Split happens. People actually think when QQQY (.80 cent average div) reverse splits they will receive $1.60 per share for their dividends. Absolute BS.
I hoping tsla makes cone back a bit then I'm selling out of tsly with hopefully a minor loss. Maybe this robot taxi boosts stock a bit then I'm out!
So even after all that paying taxes, compounded holding long-term or something you like you still walking away with a profit
Schd, dgrw, dgro are superior in regard to wealth amassing. The high yield funds are only useful for investing on margin and/or loans. Tax efficiency is highly individualized but if you are using the banks money, its no factor.
Margin can be a good tool at the start of a bull market, but if the market takes a down turn it can quickly amplify your losses along with adding interest payments as well on the borrowed money. Use wisely.
Why would they pay capital gains tax when their NAV has no capital gain appreciation? 😂
The cost basis goes down like I said idiot
why do you think coinbase will crash early 2025?
Because cycle and winter season you set a limit order and get out
who cares? if you were in last year, you are getting 100% back in Aug. hold down few more months for taxes. You get free shares and div. by Dec. forever
Ya got them all copying you now Ethan. All the basement yieldmax youtubers are now in their cars hoping for likes....Next will be them sitting up in bed in their drawers saying I was about to go to bed but I really wanted to get this out...lol...wth
Just think if you believe can get paid back in 2 years regardless of NAV erosion but then realize you have to pay taxes on all those dividends and are using margin equal to actual cash which effectively doubles the moves up or down. Oh boy the pain train is coming! I would only dabble in high yield etf's in tax advantaged accounts, using them in taxable accounts with margin maxed out on etf's that follow something as volatile as Bitcoin is just playing with fire. 🔥👹
Our only hope involves Elon’s compensation package providing him incentives to push the stock back up.
the worst NAV erosion is giving your wife 3k per month out of your portfolio.What and FN Simp Beta Boy.You cant make that up bro.
I’m still learning about investing but would be very interested in margin explanation. Mr TSLY doesn’t seem fazed about how high his margin in in comparison to his actual contributions. Last time I checked his margin was higher than his contributions. At what point will he be given a margin call if at all?
@joet3682 No one, but you care about margin. 😂😂 Giving 3K out of the portfolio is the biggest issue...
What is FIAT? Is that an ETF also?
Hopefully you are trolling, but if you aren't it refers to traditional government issued currency versus cryptocurrency.
Yes , it should be out in the next couple months . FIAT yieldmax inverse etf for coinbase
Look at HTGC
I think a lot of the YT’rs treat taxation as the afterthought because they’re not qualified to speak to it, and it’s each person’s circumstances (choices) that drive that 2nd part of the investment yield discussion. They should be qualifying their yield comments HEAVILY!
Have you investigated SDIRA’s? I see many tax attorneys and licensed CPA’s (& legal fiduciaries) talking about this on YT (not laypeople with a YT channel). They have public licenses and are legally bound to dispense tax advice, and I’ve seen some decent self-directed IRAs that hold a wallet tied to the financial account of the LLC, so crypto, as well as real estate, stocks, etc. can be directed by the owner of the LLC. I decided it’s not for me (not investing in native crypto, and am investing inside a 401K, so not with the investment to set it up), but I wonder if you’ve talked with a tax attorney about shielding your gains?
if i ever buy one of these, i sell before the dividend. i will only swing trade them. i know that the capital gains tax is there but they outperform the underlying most days. the options strategies work, the payout structure is horrible and the death of these.
I would never own them outside of a Roth IRA.
High yield funds are counting the return of capital as part of the yield. Paying you back your own money is NOT yield. All I want to know is what is the actual options premium income. The fault of the funds lies in the necessity to pay a high dividend every month regardless of options performance. That’s where the erosion happens because they have to pay ROC to give that dividend.
So, are you saying that GrayScale does not have NAV erosion? I saw a share price (not really NAV) of GBTC on 3/13/24 of $65.61, and the current price is $57.65, which is -7.96% in 99 days, or -29.347% per year. And you think this is a good investment. Looks like Grayscale is taking you for you 1.50% in annual fees.
You should probably stay out of crypto
@@EthanInvests@EthanInvests Yeah, crypto always loses money.
They're not worth it man. Underperforms the broad market long term with nav erosion and taxes. If you want 1% a month then just sell 1% of a broad market ETF. 0.333% a month if you follow 4% rule.
You’re pretty funny on Taxes. I hope that you know that US federal tax rates are progressive. You don’t pay 50 percent on the first dollar you make. People should consult a tax accountant or lawyer if you want truthful information on Taxes.
You obviously don’t have much money. Every dollar I make in these is taxed at the highest rates because I already bring in millions before these.
If your in a Roth IRA no “post” taxes 😅
If you’re in a SEP or traditional there are. Do your research
@@EthanInvests why are you being “do your research” not necessary. In my Roth and my wife’s Roth we will not have any tax on the gains … IMHO the IRA is a “huge” ripoff to the investor … fwiw
There is a RUclipsr said that if you don't like TSLY then you don't like all High Yield Dividend etfs. That TSLY fanboy RUclipsr now really want to sell out of his TSLY shares but he can't sell out of it and use the money for a better investment. He would be heavily mocked for being a TSLY fanboy and being a sell out. Lols
I like a lot of what you have to say, but the problem is that you are using extreme examples with your caution. Instead of using TSLY and 50% tax, maybe try something without NAV erosion like YMAX or AMZY and a 20% tax rate. Most investors in these high dividend funds are going to be small to medium sized retail investors with much smaller tax rates. Personally 90% of my high divvy ETFs are in IRAs but the small amount in my taxable account is taxed fairly low. But kudos for your advice not to follow the YieldMax hype masters, especially the naïve one you used as an example in Part 3.
His example is a BS lie!! This guy is a hater cause he hates making money lol
@@mikegringo2320 Not true, and nothing he said is a lie. He was just using worst case scenarios as examples. Which while correct, was a bit misleading to the average YM ETF and tax rate. That’s why I pointed out using different examples would be more appropriate.
ULTY and TSLY are disasters
do not invest highyield etf for 20 months ROI, invest in real estate 20 yrs. ROI and dealing with squatters lol
ULTY is a terrible ETF. Another TSLY.
I sold out of my TSLY position just prior to the stock split. I don’t trust Elon to keep his damn mouth shut. Every time he opens his mouth Tesla/TSLY pays the price.
After receiving his package, Musk just promised a 10x by 2030. 🤷♂️
This guys has got to be the worst trader/investor I’ve come across.
Khmer?