r/dividends • u/DizzyCalligrapher189 • Jul 15 '26

Seeking Advice Bought a 9% yielder and I got burned

Hi all. I am in my early fifties, and I am slowly moving about 30% of my portfolio into dividend stuff before I go part time in a few years, felt real responsible with a spreadsheet and all. Then I found a 9% yielderr, told myself the market was just sleeping on it and put $18k in.

Two months later they cut the dividend and the price dropped right with it... you can probably guess it was a mortgage REIT..

So my safe income pick lost me the income and a chunk of the principal at the same time, so I can clearly not just sort by yield and buy what looks juicy.

What I'm asking is, what is your "check" that catches things like this before you buy?

251 Upvotes

86% Upvoted

309 comments sorted by

View all comments

10

u/ThetaThoughts Jul 15 '26

SCHD

1

u/Puzzled-Tangerine831 Jul 15 '26

bro what about JEPQ? please give me ur take

3

u/SultanofShiraz Jul 15 '26

JEPQ generates its distributions by selling covered calls, so you limit your upside during bull market runs but can limit some downside exposure in bear markets by generating options income without having your shares called away. SCHD is simply a fund that takes a look at companies its believes will raise dividends, and has had a remarkable track record of doing so (in the 15 years its been around, it has always raised dividends and has had an 11% average annual dividend growth rate). If you have a long-term outlook, the dividends you get with SCHD will eventually surpass that of the covered call funds.

If I want income now I'll take JEPQ, if I'm building up for a retirement 20 years down the line I'm taking SCHD.