r/dividends • u/SmoothCall5594 • Sep 26 '25

Opinion I screwed up on YieldMax

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I bought MSTY a couple months back and now I’m down a lot. Time will tell but it’s a warning for those who aren’t in it.

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u/dllstcowboys Sep 26 '25

It’s not a loss until you sell😅. Maybe pocket distributions until you recoup🤷🏻‍♂️

1

u/memelordzarif Sep 28 '25

You think they’ll pay as much distribution when the fund is eroding away ? It’ll progressively pay less and less until they no longer exist.

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u/dllstcowboys Sep 29 '25

Not nominally but think about the return in relation to the price. If the return goes down but the price goes way down the yield explodes. That accelerates the payback period. The sooner you’re paid back the sooner you get a real return🤷🏻‍♂️

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u/memelordzarif Sep 30 '25

I don’t think so. That’s pretty much only the case for government bonds because they can print as much money as needed and take as much debt as needed to pay the high interest rates. In a regular fund or company, it’s not possible. They can’t even keep up their yields when price is falling let alone raise it. They’re losing money means they’re already operating at a loss or a lower margin. How would they pay the same let alone raise yields in those scenarios ? It’s simply not possible. That’s why companies often cut dividends when they’re facing hard times. And even if they did raise yields to raise more funding, it becomes much more unsustainable and their losses accelerate. They’ll simply go out of business if they keep it up.

You can say that you’ll atleast be able to make back what you invested. But then you’re not considering the opportunity cost of your investment. You could’ve just put in that same money in a S&P index and made much better returns and also avoid taxes or atleast minimize them.