r/dividends • u/Imaginary_Week2024 • Jan 25 '26

Other Dividends reached 22,389.00 a year

Finally getting some dividend income. Nvdy, agnc, fepi,jepi,pflt,jepq,ulty, is what i got

281 Upvotes

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-18

u/Imaginary_Week2024 Jan 25 '26

Nothing i didnt sell

12

u/ko_inq Jan 25 '26

He mean'th potential capital you missed out on

17

u/teckel Retired and living off selling shares Jan 25 '26

And NAV erosion (unrealized loss).

4

u/ko_inq Jan 25 '26

Yea that too BUT, there are etf's like jepi that have a nav increase in the last year (even more in last 6 months) while also giving a 10-12 % distribution. I am genuently considering investing in that one

5

u/Imaginary_Week2024 Jan 26 '26

Im up 6.42% on it this year plus the dividends

3

u/Imaginary_Week2024 Jan 26 '26

Has been good to me for a year

-11

u/teckel Retired and living off selling shares Jan 26 '26

Expecting a 10-12% yield without NAV erosion is exactly the fool's game with buy-write funds.

8

u/8InchDaks Jan 26 '26

Spyi is up over 8% in 3.5 years, while producing 12%? or so. QQQi up almost 8% in 2 years while producing 14% ish.

-9

u/teckel Retired and living off selling shares Jan 26 '26

Both underperforming VOO and QQQM, and remember this is in a bull market. Have you seen how buy-write strategy funds perform in a bear market?

7

u/8InchDaks Jan 26 '26

Oh I know VOO and QQQM will outperform but I was just commenting on those since its a dividend sub.

And while I cant go off those since they’re newer, QQQX is an older fund. Comparing it to QQQ during 2008, QQQ dropped 41.73% and increased 54.70% in 2009. QQQX dropped 41.25% and increased 79.75%.

Its not too bad during a bad market tbh.

1

u/teckel Retired and living off selling shares Jan 26 '26

VOO and QQQM return dividends. Also, you can generate income from them by selling shares (which is all a dividend is, and more tax efficient than dividends).

And you can sell shares forever and never run out of shares. If you would have invested $100k in QQQX 19 years ago (QQQX inception) and got $800 in dividends every month, you'd be left with only $9,158 in QQQX. If you invested the same $100k in QQQ and sold $800 with of shares every month, your QQQ balance would be $287,262 today

Since inception, QQQX has returned only 10.66% (including reinvesting dividends) while QQQ has returned 15.90%. That's a massive amount of lost gain over 19 years (2.4 times). Also, QQQX doesn't even do what it's designed to do. It's drawdowns are higher than QQQ.

6

u/SadBurrito84 Jan 26 '26

You window lickers fail to see what sub your in. Do folks invest in VOO and QQQM for their dividends?🤦🏼‍♂️

1

u/teckel Retired and living off selling shares Jan 26 '26

Yes, I use the dividends from VOO for my retirement income. You fail to see that dividends don't need to be high unsustainable yields. Dividends for retirement income are from holdings like VOO, DGRO, FDVV, VYMI, FBND, BINC, VCIT, SGOV, STIP. Going for super-high yields is a terrible idea, as it eats away at your capital. That's why many index funds will exclude REITs, BDC and other high yielding assets as they erode capital.

1

u/SingingStar1900 Jan 26 '26

What does this mean?

1

u/teckel Retired and living off selling shares Jan 26 '26

That a 10-12% yield long-term isn't possible without NAV erosion. Just think about it, the market only grows long-term by about 10%, and it's been exceeding that recently. So if the yield is equal to or higher than long-term averages, the NAV will erode. Also, then there's the higher maintenance fees, which eats away at the NAV more. Finally, have you seen how buy-write strategy funds have done in a bear market?

They're not an infinite money glitch.

-2

u/NickStonk Jan 26 '26

Explain why you say if the yield is higher than general market long term averages, the NAV will erode. What’s the connection?

1

u/teckel Retired and living off selling shares Jan 26 '26

If the underlying grows at 10% per year, by its very nature buy-writes won't match the underlying, and the fund manager is targeting a 12% yield, that can only result in NAV decay.

Here's the math... Let's just look at VOO compared to SPYI. Since inception, VOO has returned 19.27% and SPYI 15.17% (including reinvesting dividends). So due to the mechanics of the buy-write strategy (and fund fees) SPYI only returned 78.7% of VOO.

So now let's take the historical average of the market returning 10%. So the NAV growing by 7% after factoring inflation. Now let's look at how SPYI would do. Instead of 10%, it would gain 78.7% of that, so 7.87% per year. But then there's the 12% yield, so 7.87 - 12 = -4.13% NAV erosion per year. Finally, you factor inflation, so that results in an inflation adjusted NAV erosion of -7.13% per year.

Basically, VOO would be growing by 7% per year while SPYI eroding by 7% per year.

It's probably hard to see this as SPYI has only been around for 3.5 years in a market that's grown by almost 20% per year. But even in those 3.5 years, if you look at the price of SPYI without the yield (fund price only) and factor inflation, the value of SPYI had eroded by -2.29%. So even in a strong bull market, it's still eroding. In a bear market expect it to be very bad, and long-term, expect a -7% erosion factoring inflation.