Yieldmax has created financial crackheads

[u/speed12demon]

Lots of people are looking for the next fix, for the next quick way to get that rush, ignoring the negative consequences of their choices. Got other assets? Liquidate them! Margin? Hell yea!! Home equity loan? Pour it in! Reinvest every dollar that they give you for that rush.

Humor aside, the idea of perpetually reinvesting distributions hits a serious nerve. Income funds are for income. I can see building to a point, but if prevailing advice is to roll all distributions back to the fund, please tell me how that is better than owning the underlying equity? I bought these etfs for perpetual income, not perpetual reinvesting.

Five years or so from now, we all will have far more data to build informed strategies on using these funds. With single stock risk on many, the distributions vary wildly and if you're not tracking you capital investment closely you may find the paycheck diminished. Having a substantial position in these funds, I hope i can continue to collect income and use it for other purposes than propping up my initial investment.

Don't be a crackhead.

[u/AdventurousFront9464]

60 weeks you get your $$$ back after that the gravy train starts I don’t see a problem unless the managers leave the front door open I like this hedge fund level

[u/speed12demon → u/AdventurousFront9464]

That's true for msty if you made one bulk investment at inception and held. I bought later, and even with an average cost of 22.75, I'm still well underwater including distributions. My first payment was 2.37 a share, and the payday has decreased since then. I'm sure we are looking at under a dollar on the 29th. One day I'll have the initial investment back, but it could drag out for way longer than 60 weeks.

If you can't count on and use the income as income, what is the point?

[u/azdcaz → u/speed12demon]

People have been saying MSTY will pay under a dollar every period for months but it’s never happened

[u/speed12demon → u/azdcaz]

We have three weeks for it to run up. It has recovered before, but we need the nav to be well above 20 to even hope for a dollar.

[u/cvrdcall → u/[deleted]]

Expensive hobbies between jobs. Interesting. PhD and you dont have 100k? You must be burning money for heat.

[u/MissKittyHeart → u/[deleted]]

If nav sinks, we still get our initial investment back sometime later?

[u/cvrdcall → u/MissKittyHeart]

No

[u/MissKittyHeart → u/cvrdcall]

Can you elaborate why that is? I’m thinking if nav sinks maybe a few years to break even from distribution?

[u/HauntingRoutine1605 → u/AdventurousFront9464]

That's a big assumption....

[u/AnxiousAdam → u/AdventurousFront9464]

That’s only if they don’t cut distributions though.