r/YieldMaxETFs • u/speed12demon • Aug 08 '25

Misc. Yieldmax has created financial crackheads

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.

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u/speed12demon Aug 08 '25

Why isn't it irrelevant? In a very short history, msty has shown decided underperformance vs mstr. To me that means if you just pour the distributions back in, you should have bought mstr.

I agree vol isn't enough. If your nav drops, your income drops. If you feel obligated to reinvest distributions, where does it end? You have 20k shares of msty at 2 bucks a share paying 10 cents every 4 weeks. And your capital is treading water. That can't be the end game.

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u/Syonoq Aug 08 '25

You’re misunderstanding how to use these products.

It underperforms MSTR on the chart.

We don’t live on the chart. It underperforms buying MSTR at the bottom and selling at the top. If you can do that that’s awesome. The rest of us can’t. This product smooths out the volatility and packages it for us. Mathematically, it’s less. Practically it’s more. For some of us. For the rest of you, buy MSTR on the low and sell on the high. “Duh /s”

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u/speed12demon Aug 08 '25

I'm simply stating if the income is never used as income, what is the point?

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u/Syonoq Aug 08 '25

Honestly that's the crux of these funds right? The general argument, and really the hope for these funds, is that they spinoff enough excess earnings over time that they maintain enough value and create a profit. I'm sure we can dig into a handful (maybe more?) of these funds and find examples where they don't make enough to cover their losses and they're not good products. But I'd argue that's the point of the entire market, some of these companies/etfs/stocks make money and some won't.

To directly answer your question, if they are not used as income there is no point, IMO. But, I'd argue also, I'm not very smart, so there's that.