Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[UteChief]

Originally Posted by Hog's Gone Fishin

That's why I've avoided this thread because of all the idiot comments

How is stating a fact an idiot comment?

[UteChief]

Originally Posted by Hog's Gone Fishin

And it's not deflection because I sold real estate on 12/13 to drop another 100k in to these

Instead of being an insufferable asshole that gets butthurt when people ask questions, show us your financial model over 1, 3, 5, and 10 years.

[Buehler445]

Originally Posted by lewdog

Let's just start with CONY, down 47% YTD.

Yieldmax ETF'S, they will give you a massive dividend but long term your principle amount will go down. The expense ratio on these ETF's are crazy. The expense ratio for many is 0.75-1.0 for every 1k you give them 7.50-10. Every 10k you give them 75.00-100. Yieldmax, covered call, and leveraged ETF's are not a viable long term strategy, especially during a sideways or bear market.


High-income option selling ETFs like CONY often erode principal value, which makes them a poor long-term investment despite high dividend yields. This fund's structure, involving U.S. treasuries and a synthetic COIN position, is an inefficient way to generate yield from option premiums.

Nonetheless thats a pretty impressive return

[lewdog]

Originally Posted by Buehler445

Nonetheless thats a pretty impressive return

These haven't been around long enough to determine a longer term "return." The math here doesn't add up, these are not true dividend stocks. People are going to get smoked on these long term.

[Buehler445]

Originally Posted by lewdog

These haven't been around long enough to determine a longer term "return." The math here doesn't add up, these are not true dividend stocks. People are going to get smoked on these long term.

Regardless, the Cash is in his account.

[lewdog]

High Yield ETFs

Most of those 25% plus ETFs don't own any stocks at all; they are only options. options are risky; and will cut off max gains while leaving bottom exposure wide open.

What about NAV erosion, let's not ignore the math here because you got some "good dividends" for a year. Dividends are not free money! Net asset value erosion refers to the decline of a fund when it distributes more in dividends than it actually generates profit. So with yieldmaxs high distribution rates, it takes a toll on the actual asset value since they're paying out more than what they actually earn.


And in Yieldmax funds that are trading certain strategies there may not be NAV erosion. It’s very simple actually, total return tells the entire story of those funds. If total return is positive then the strategy is working but it won’t work all the time which is why they are generally bad funds for long term holdings.


If you're looking at it from terms of growth (ignoring dividends for a sec), then it's always better to buy the underlying security itself. This way, you get exposure to growth, which would otherwise be capped/limited because of the covered call strategy.

Lastly, everyone here likes some aspect of growth when dividend investing. They of course want dividends to rise but they also want their initial investment to appreciate in value. Look at most Yieldmax funds, the "investment" is NOT rising. This is where yieldmax fails, and why most people should stay away from them.

[lewdog]

Originally Posted by Buehler445

Regardless, the Cash is in his account.

Sure, just the dividends. He won't actually tell us the math on this total return and we all know dividends are NOT free money. So is his principle getting cut in half on a yearly basis to pay out these dividends like CONY mentioned above????.....with that math his account won't last.

[UteChief]

Originally Posted by Hog's Gone Fishin

I'll update you at the end of the year to show you how ignorant you are.

2025?

[Buehler445]

Originally Posted by lewdog

Sure, just the dividends. He won't actually tell us the math on this total return and we all know dividends are NOT free money. So is his principle getting cut in half on a yearly basis to pay out these dividends like CONY mentioned above????.....with that math his account won't last.

Yeah, no clue what he's doing with the proceeds, but if he's reinvesting, he might be doing pretty well.

[scho63]

It is my understanding they are not "owning" long options but opening short puts and calls to collect the sky high premiums and then hedging with a close strike to limit risk.

Can anyone confirm?

[lewdog]

Study these funds very carefully before investing money in them. Run simulations of how much total money you would have (current share price + dividends received) if you had invested $10,000 into them a year or so ago, etc. You might find that the "true yields" are actually lower than the advertised yields as a result of NAV erosion. Also study what would have happened had you simply purchased the underlying stock. Also know what will happen to them in a bear market.

That's all I'm saying.

[DaFace]

Originally Posted by Hog's Gone Fishin

Can you imagine a savings account paying 60% interest.

I honestly just think you're making really bad financial decisions. Not trying to be an ass, but you do realize you're losing money in the account that largely (albeit not entirely) negates your distributions, right?

If you got 60% but your account dropped 47%, you only gained 13% in a year in which S&P500 jumped 28%.

[DaFace]

Originally Posted by Hog's Gone Fishin

I'm in a discord that analysis these daily. Worrying about the way they invest is pointless. They change weekly if not daily. They have evolved since inception to mitigate share price reduction. They are now using more spread options in the weekly portfolio while limiting exposure to downside. There's people in this discord bringing in over 3 mill per month, just incredible.

I honestly just hope you're not being scammed. Best of luck to you.

[UteChief]

Originally Posted by DaFace

I honestly just think you're making really bad financial decisions. Not trying to be an ass, but you do realize you're losing money in the account that largely (albeit not entirely) negates your distributions, right?

If you got 60% but your account dropped 47%, you only gained 13% in a year in which S&P500 jumped 28%.

With CONY it’s showing a 47.5% loss in NAV but a yield of 129.85%. So anyone correct my math. A $100k investment now has a value of $52.5k and received $129,850 in dividends. Dividends are taxed as ordinary income, based on Hog’s previous comment on dividend income assume a 24% tax rate, -$31,164. So the value in 2025 is now $151,186.

While an investment in VOO grew 26.77% and received a 1.22%. Now being worth $127,742.20. I reduced the dividend by 24%, but did nothing to the growth, since it would only be taxed when sold.

It’s an interesting investment.

[lewdog]

I love you Hog. We can disagree.

I agree to not post about yield max ETFs if you’d keep us updated.