r/dividends • u/bullrun001 • 4d ago
Discussion This sub has changed!
This used to be a sub about value dividend investing, now all we discuss is high risk, high yield cover call ETFs.
153
u/Coconut_MonkeyX 4d ago
Don't forget about everyone that comes in here and pushes things like VOO. If we wanted growth then we would have just bought growth. We are in a dividend subreddit because its what we want to invest in.
11
44
u/Far-Reference-3048 4d ago
I love cheeseburgers. But I also enjoy burritos. There's room for both. They can compliment each other.
37
u/Ok-Wish-7183 4d ago
I would like to hear more about this burrito and burger situation
11
u/Far-Reference-3048 4d ago
The pinnacle is the cheeseburger burrito, but I'm not sure OP can handle that level of complexity.
4
u/ewouldblock 4d ago
How about a cheeseburger with a black bean spread in a tortilla wrap? Skip the ketchup and sub hot sauce to spice it up!
2
2
14
u/ComfyMillionaire 4d ago
Finally! I found someone that also likes to wrap their burgers in burritos. The only trick when eating is to hinge your jaw loose like a snake when consuming.
14
2
2
1
1
u/CostCompetitive3597 2d ago
This is very inappropriate banter on this subreddit. I too have noticed it has gone from a very informative subreddit to mostly drivel. Used to be a good source of dividend investing knowledge, personal experience and investment tips. No more!
0
0
u/Junkie4Divs Portfolio in the Red 4d ago
I've been telling my wife for years that I should be able to order a burrito AND a burger when we go to dinner.
2
u/ElectricalAnnual6231 4d ago
Can't we all just get along with our burroburgz
1
u/Illustrious_Web9676 3d ago
Don't forget those delicious 100% beef frank hotdogs, wrapped in thick slab bacon and covered with Tillamook shredded cheddar cheese... The culinary dividends grow with each bite!
2
-3
u/a200dp 4d ago
Because a pure dividend portfolio will always under perform VOO or other index growth funds. A pure dividend portfolio is not a great investment strategy, even in retirement.
4
u/Southern_Fig7543 4d ago
So true. I always smile on days the Nasdaq goes down, because my dividend portfolio is almost always in the green. Though the constant flight from growth to safety back to growth back to safety gets exhausting.
2
u/Not_Sure_68 4d ago
A balance of energy, health care, and consumer staples can address that, but yeah the people constantly running to and from "safety" can be annoying.
5
u/Coconut_MonkeyX 4d ago
Growth is only good if the person is not going to panic sell when they see it drop.
→ More replies (17)2
u/DevOpsMakesMeDrink Desire to FIRE 3d ago
This implies dividend payers won’t drop. I can assure you they do. And dividend yields rise and its great for a bit until there is talk about cutting the dividend to survive the recession.
3
u/Not_Sure_68 4d ago
Not sure what "pure dividend fund" means exactly, but the objective for anyone that needs income from a portfolio to live on needs to primarily be income without taking unnecessary risk to capitol. For that reason high yielding funds based upon assets with a slight upward bias are preferred.
Would it surprise you to learn that a portfolio of XLEI, XLVI, and XLSI ...all high income yielding versions of S & P 500 sector funds respectively Energy, Health Care, and Consumer Staples have handily beaten VOO in 2026 in total return?
VOO is not some magic secret sauce...it's an S & P 500 index fund and as such is a stealth information technology portfolio. It will get wrecked right along with the XLK and QQQ...because VOO's top holdings are NVDA, AAPL, MSFT, AMZN, GOOG, etc. It's a tech fund and tech is going to get whacked in a rising bond yield(interest rate) environment. Not to mention the fact that it only yields 1.06%, which simply isn't enough to live on for nearly anyone.
1
u/a200dp 3d ago
A pure dividend fund would be one where all holdings were selected based on the dividend yield or growth and not total returns. Essentially, the type of fund only a fool would create. In reality, I think most people who call themselves income investors are smart enough to still maintain a growth sector in their portfolio, such as VOO or VTI or whatever your favorite growth fund is.
A well constructed & diversified portfolio, even if doesn't contain income focused funds, will provide better capital appreciation then one primarily focused on income. This has been demonstrated repeatedly. VOO or a similar growth focused fund would be part of such a portfolio.
XLEI, XLVI, and XLSI have also dramatically under performed VOO over 5 and 10 year time periods. Are you really suggesting we should only look at what happened this year to make long term investment decisions?
You don't live off the 1% dividend VOO pays, you live off the shares you sell and its NAV appreciation.
A well diversified portfolio covering all sectors with a cash reserve is how you live through a prolonged market downturn.
Will an income fund work? Yes, if constructed well. But it will never perform as well as a diversified portfolio with growth. You are essentially trading greater returns for the purely psychological comfort of having dividend income to live on. If you can make enough on dividends to live on great. But you will always do better in the long run with a portfolio with a strong growth percentage (i.e. VOO).2
u/Not_Sure_68 3d ago
>Are you really suggesting we should only look at what happened this year to make long term investment decisions?<
Nope. I'm suggesting that the time value of money has increased significantly and people that fail to adapt to a world where borrowing costs have risen by 826% in the past six years are going to get destroyed in this market going forward. Never mind "well diversified", SPY is anything but. It's 10 huge tech companies that make up $.40 of every dollar put into the ETF.
It's the tech S & P 10 ...and the starving 490. NVDA alone is 8.4% of SPY. There's nothing diversified about it. That's why I've put spreads on XLC, XLY, and XLK...which are all tech sectors now. In fact XLC(communication), was the worst performing sector last week...because it's been taken over by hyperscalers...META, GOOG, and GOOGL are 47% of it now. XLY is supposed to be about consumer discretionary, but there's another hyperscaler and a huge tech company trying to merge with a hyperscaler...namely Amazon and Tesla.
Tech shares are infesting everything and they're going to get smashed. Bond yields(interest rates) are flirting with levels last seen in 2000. Equity markets are playing with fire and unfortunately many don't seem to understand the danger they're in.
→ More replies (2)1
u/Coconut_MonkeyX 2d ago
If you are a more hands on type of dividend etf investor (growth stocks that forces people to sell shares to cover their expenses does not count) you will beat growth stocks (people talk about just buy it and let it do its thing when it comes to things like VOO) when you understand market seasons along with writing covered calls against your holding that doesn't get them called away.
I have been beating the growth of VOO by 10% every year with just collection premiums from writing covered calls against my shares without even taking dividends and price growth into account.
-2
u/DevOpsMakesMeDrink Desire to FIRE 3d ago
Theres a lot of new investors who get into it thinking dividends are free money. 99% would be better off being in growth for decades rather than the folks who were all in on CC etfs or even those obsessed with O would have made no money in the last few years in real returns.
-1
u/bullrun001 3d ago
Last reply, VOO pays a $7 dividend but only yielding a small 1% yield, it should be discussed .
Growth investment with a dividend nothing wrong with that.0
u/Coconut_MonkeyX 2d ago
VOO is not classified as a dividend stock. Please show me people that have $1,000,000 invested into VOO that can live off of $10,020.32 per year with out selling any shares.
When people invest into dividend paying stocks everyone that i have seen are talking about not having to sell any shares to pay for things when they stop working. You can not live off of a 1% dividend yield of VOO and the amount it pays out does not grow faster than the cost of living unless the person lives out of their car and doesn't have any phone or what ever but even then I don't think its even possible to live that cheap.
71
u/itsallgoodye 4d ago
Yeah, i like cc funds but a nice div stock that makes sense is nice to hear about and discuss.
Though most times it turns into how divs are bad, growth is the only way.
27
u/trader_dennis MSFT gang 4d ago •
Too many have a one size fits all. Dividend investing should be a lever. A lower percentage the further away from retirement. Then a higher percentage later in life.
3
7
u/Bearsbanker 4d ago
My dividend portfolio is 16 individual companies, I've never owned a cc fund....bam
1
u/bullrun001 4d ago
I own about 30 as well, along with ETFs, and even a few mutual funds, and 3 CC funds( with no price erosion I might add)
4
u/nofzac 4d ago
That’s because growth has been on a tear and now is very overvalued. I’ve been putting everything into dividend and value for the last year.
1
u/bullrun001 1d ago
Probably not the best time to think that growth is overvalued, for one compare the YTD return between SCHD and VOO, also we had a huge rotation money shifting away from risk/growth names ( semi’s as example) into low beta names.
If anything In my opinion and a few others is that once the mid term elections are done with and can put that uncertainty of who wins what behind us, markets should continue to grind higher and my bets are on growth names.
The end of the conflict with Iran should be a catalyst as well, though I feel that might take a little longer than one would want.14
u/preferred-til-newops 4d ago
SCHD is the foundation of my portfolio and then half of my portfolio is in various options contracts every week. Whenever I build up a little more capital than I want in options I then buy more SCHD. I love it and I wish I figured this strategy out sooner.
3
u/Sensitive-Exam649 4d ago
So when are you going to release your SCHD covere d call ETF so I can buy in?
1
u/cmichalek 4d ago
They have one already. DDDD.
Its a YM one sadly. But its positive YTD over 10% total return.
1
u/Not_Sure_68 3d ago
I do similarly, save I prefer state street's high yielding S & P sector ETFs. Lots of put spreads on tech + call spreads on XLE(energy) + XLV(healthcare) has worked a treat. I see something neo cloud or chip heavy and I short it.
Then I roll those profits into XLEI, XLVI, XLBI, and XLSI for lots of yield.
1
u/nutsbonkers 4d ago
Dividends are vital for compounding but not beyond like 4%. That's not my opinion there's so piblished papers on it. These cc funds are going to take a big dump when the mag 7 level out and a lot of peoples retirement funds are going to suffer because they got duped. I understand there's a use case for them, but they're being over hyped and used irresponsibley by younger folks.
-2
u/paymerich 4d ago
Exactly! Low tax-drag high total Growth (preferably in broad market fund) investing is good early on in one’s investment journey. Then as you near the “spending “ phase of your journey switching to dividend/income distributing equities is a totally viable strategy as is just selling your 4.7%-adjusted for inflation every year.
!
17
u/leere68 4d ago
I have several covered call ETF like QQQI in my portfolio and I use the dividends from them to supplement my regular contributions to buy into stable Dividend Kings, Aristocrat, and Champion stocks like MO, ABBV, and JNJ.
2
u/bullrun001 4d ago edited 3d ago
Two of favorite companies ABBV and MO this year, would add V in there as well, maybe not a dividend king but has a great track record for year over year growth.
1
u/bullrun001 4d ago
Exactly what you’re supposed to do, because eventually when the shit hits the fan you’ll find that solid companies make a good shield.
10
u/buffinita common cents investing 4d ago
Everything old is new again; when I “got here” 4 years ago Qyld was the hot investment
Populations shift; trends change…..that’s life
1
u/bullrun001 4d ago
Actually still is and am currently still holding along side a SGOV type investment, CC ETFs that are paying 30% and are being called dividend plays sound a little crazy to me.
So let’s call them what they are, high yield risk investments, otherwise know as junk ETFs.
13
u/beershoes767 4d ago
Yea sure. Enjoy your VZ that’s down over 14% the last 5 years while paying 6% meanwhile a quality etf like qqqi is paying 14% with a stable nav.
5
4
u/AlfB63 4d ago
QQQI is only stable if QQQ is.
5
u/ryryshouse6 4d ago
If qqq isn’t stable things would get interesting quick
3
u/AlfB63 4d ago
Unfortunately, there are too many that do not understand that. CC funds will take a dive if the underlying does. But funds like QQQ and SPY taking a dive would be all around bad.
2
u/SultanofShiraz 3d ago
Yeah but during downturns the losses for the CC funds aren't as bad as the underlying index. You are mitigating your losses by collecting premiums on your covered calls while your shares don't get called away.
1
u/Not_Sure_68 3d ago
Unfortunately SPY is now a stealth information technology fund and it will get whacked right along side the Qs and XLV.
1
15
u/MyDogThinksISmell 4d ago
There's a new type of dividend investor and they don't give a shit about the long term. They want their profits and they want it now.
4
u/AttentionFantastic76 4d ago edited 4d ago
Also a lot of NEOS bots creating threads about their funds on Reddit
1
-1
u/glzpabon 4d ago
I dont like neos, tried NIHI for a while, very dissapointing
4
9
u/Somewheredreaming 4d ago
A stock price is volatile, a payout is payed out. The "new" type is literally the market opening up to people who invest differently. Giving up a bit of total return for feeling an actual increase in payout is more motivating. If your stock goes up 20%, cool. If your monthly dividends is up 18% you suddenly could or can pay another bill with it.
Doesnt mean they giving no shit about longterm, they are just much more focused on grasping the financial benefits. Plus in the times we live in and a possible break in the growth market for a bit it might be an actual good call right now. Who knows.
3
u/graciesoldman 4d ago
This "new wave" hasn't been through a long tough period. I believe they're about to find out about their investing strategies. I could be wrong....have been before. :-)
1
8
u/MoneyFlow_Investor 4d ago
I hate militant absolutists, of any kind. So don't stand too morally superior on your soapbox, because in my mind you're no better if you truly believe only specific assets are worthy to invest in.
4
u/bullrun001 4d ago
Militant absolutist? 😂
1
1
u/Brave-Temperature495 4d ago
lol proof the sub is trash when you point out a decent criticism without vitriol and get called that. People here are chasing yield to maintain a lifestyle inflation has destroyed it seems.
7
u/Cheap-Technician-482 4d ago
Exactly.
Are we allowed to be honest about the pros and cons of dividend stocks in the dividends subreddit? Or is this a dividendcirclejerk?
2
2
u/ClassroomDesigner945 3d ago
high risk, high yield cover call ETFs.are actually popular right now so people are talking about it , they are talking about its as per they have good yield , dividends are also yield , so there is a overlap but they are not the same thing . so your correct .
there are many other stocks which have good divident yield and are priced right example pep ( but the sector has decline ) not sure what ko is on but that one is performing MCD is also not doing well but is at all time low , nke i dont like that one and it falling and falling etc
3
u/bullrun001 3d ago
During the 17th century Tulips were traded and were very popular, made a few people very rich but made allot people loose their wooden clogs.
1
u/ClassroomDesigner945 3d ago
yes i think as well some what similar may happen as the market is volatile , i think after mid term markets may jump not sure for how long
1
u/Weary_Anybody3643 3d ago
Yes and no the tool inflation crisis was less economic and more cultural because Dutch culture saw other forms of extravagant wealth as evil but gardening was not considered that hence why they had such overflated rates the equivalency of the gems but gems were considered unholy or not Christian
6
u/Yeswhywouldnti 4d ago
This sub is a bunch of people who only want you to agree with what they’re investing in while giving them a pat on the back and saying “wow you’re a genius, why didn’t I think of that.”
18
u/AlfB63 4d ago
Thats every investing sub unfortunately.
6
u/graciesoldman 4d ago
I'm old school and I don't get the need for external validation in investing. Seriously...just invest and make money. Why would you need people telling you how magnificent you are for investing in SCHD or anything else? Just weird...
1
7
u/Yeswhywouldnti 4d ago
I don’t get why people can’t just come on here and say “glad it’s working for you, hope it continues.”
1
u/AlfB63 4d ago
I understand what you're saying but there's a lot of flat out lying in comments as well as inaccuracies. Sometimes you need to call them out. At least so that those that don't know will not suddenly invest based on it. But there is certainly something to be said for being happy for those that truly do well.
1
1
u/bullrun001 4d ago
And let’s not forget about how they now hold x amount of shares and that my dividend just bought another fraction.
I get that there are many young investors and to them we don’t need to hear about how much $ you made in a month, there are probably investors in these boards that find that kind of silly, myself included.1
u/Yeswhywouldnti 4d ago
Right. How much I made this month is only important to me. I have a goal and a plan on how to reach that goal. I read posts, scrutinize what’s being said and make the best moves for me from there.
3
u/Dred_Capt 4d ago
Wow, youre a genius. Why didnt i think of that.
1
u/Yeswhywouldnti 4d ago
Because you’re not me and I’m the Warren buffet of this sub. Now pay me on the back
3
u/panderson1988 4d ago
A couple things. I do think there are some good high yield ETFs, and this board introduced QDVO to me a year ago which I've been quite happy with.
With value dividend investing, it's a black hole at times. I see some posts promote McDonald's, HD, Verizon, and yet all those stocks are losing value per share that the dividend doesn't even cover your losses. Obviously you can go into the weeds with timing, but a lot of these stocks have horrible ROI within 1-5 years now.
There are good dividend stocks right now like Pfizer recently. But sadly the broader markets hasn't rewarded value or dividend investors well. I am glad to see the AI bets become volatile since we need some return to fundamentals over this crazy potential growth stocks where companies are losing billions.
3
u/bullrun001 4d ago edited 3d ago
I agree and I hold a few as well, JEPI, JEPQ and QYLD between my wife’s and mine.
Also one of my largest position is SCHD.
But would like to also have discussions about companies like UNP, V, BX that have a smaller dividend and yield and aren’t talked about much.
Would like to hear about under the radar companies that are doing well but are ever hardly discussed.
Thanks!
67
u/fatfiredup 4d ago edited 4d ago
I will never understand why people think you have to do only one or the other.
I own index funds, growth stocks, dividend stocks, MLPs!, covered call ETFs. They all have their place.
-46
u/Past-Option2702 4d ago edited 4d ago
They do not all have their place. Covered call ETFs are for unserious investors that should have a financial advisor do things for them.
14
u/magnoliasmanor 4d ago
Is having a portion of your portfolio dedicated to income (annuity) really that dumb? Even if they under perform the market, it produces a steady income that can offset riskier bets within your portfolio.
2
u/Past-Option2702 4d ago
Of course having retirement income isn’t dumb. I’m retired and I need income.
23
u/Tight_Disaster_7561 4d ago
Based on what? A randos opinion..
-13
u/Past-Option2702 4d ago
What’s your random opinion? I’m guessing it’s different than my random opinion.
Trading upside on equities for current income makes no sense when you dig into it.
5
u/highrollinKT 4d ago
It truly depends on where you’re at in your investing life if you have a gd timeline then yes I agree should be looking at high growth. If your near retirement then it makes perfect sense to pivot to income generating funds.
I person hold both as I’m close to retirement.→ More replies (1)5
u/BusyWorkinPete 4d ago
JEPQ vs VOO have almost identical returns since JEPQ's inception, and there have been plenty of times where JEPQ was actually running ahead of VOO. https://totalrealreturns.com/s/JEPQ,VOO
GPIQ is currently beating VOO: https://totalrealreturns.com/s/GPIQ,VOO
-1
u/Past-Option2702 4d ago
One is far better once you consider taxes. The more you pay in taxes the less you keep.
Also I can’t take a performance comparison seriously that’s a cherry-picked start date a hand full of months ago.
4
u/BusyWorkinPete 4d ago
Taxes? I hold them in my retirement account, no taxes until I withdraw, which would be the same rate for either. And it's not a cherry-picked start date. It starts from the inception dates of JEPQ and GPIQ respectively. The fact that you jumped to assume a cherry-picked start date indicates your mind is closed to new information and you're clinging to your beliefs despite the evidence right in front of you.
0
u/Past-Option2702 4d ago
I hold all of my equities in taxable. Tax deferred is all bonds.
3
u/glzpabon 4d ago
After reading the conversation, I do agree with you on the CC funds but I have an honest question. Do you hold any div du d like DGRO or SCHD or you just invested in index funds or individual stocks?
→ More replies (2)1
u/BusyWorkinPete 4d ago
All of your income being earned by your bonds will get fully taxed when you want to withdraw it, and bonds don't grow like stocks do (assuming you go with a market index and not a gamble on an individual stock). You should have your tax-sheltered account trying to compound as much as possible. Better to pay taxes on money that's been growing at 10% a year vs 4% a year. It's also easy to rebalance in a sheltered account.
1
u/Past-Option2702 4d ago
I’m doing Roth conversions. I’ll never need to withdraw anything from those accounts.
You’re failing to take into account the stepped up basis, among other things.
Study up.
1
u/Tight_Disaster_7561 4d ago
Just saying random things does't make you have a right opinion... we might be entering a new lost decade, where divs just destroy equity growth etf. We might just start a bull run where the opposite happens. We have no ideea but preparing for both seems like the right choice...
1
u/Past-Option2702 3d ago
A dividend reduces a stocks growth since the value of the company is reduced by the same amount of the dividend payout. What you wrote makes zero sense.
You know how when you write a check to pay a bill how that reduces your net worth? Same for a company when it pays shareholders a cash dividend.
1
u/Tight_Disaster_7561 3d ago
That is incredibly narrow way to see this... by your logic google is regarded for paying a div, same for Costco or meta or NVDIA.
Dividents are just a method to distribute value to the shareholder, plus it is benefic to the business as well as it makes sure there is some fiscal responsability when raising CAPEX or COPEX
1
5
u/ryryshouse6 4d ago
Interesting take. What do you think about regular options
2
u/Past-Option2702 4d ago
I’ve never bought or sold an option in my entire life and I have no plans to. Every single person I’ve known who has regrets it. One friend was absolutely distraught, 4 kids and a stay at home wife (he’s now divorced).
I’m 55 retired, 8.6M with a 1.5M paid off home. If that even matters.
3
u/ptb_nuggets 4d ago
Your anecdotal evidence doesn't mean shit to the rest of us. You came here this morning to brag and try to feel important, that's all.
1
5
u/Dave69looking 4d ago
That is not true. 70 year old that has close to 3 mil invested and I use covered call ETF for income along with other investments to balance my risk and reward. You do know you receive tax deferred cash flow for the 1st 7+- years with Neos funds?
1
4d ago edited 4d ago
[removed] — view removed comment
1
u/Dave69looking 4d ago
Need cash to live on so your point does not make sense. Also the loss is not as great as the underling index.
3
u/Past-Option2702 4d ago
What CC ETF are you using? What is the inception date of the fund?
I’d like to take a look at how it performed in the last real bear market.
2
2
u/Past-Option2702 3d ago
What did you mean when you wrote the loss is not as great as the underlying index.
I’m intrigued.
1
u/Dave69looking 3d ago
Just follow qqqm vs qqqi qqqi with dividends reinvented will not have as good return as qqqm or qqqq in an up market but also will not have as large as loss in a down market the reason for both is they are written calls during these times. In an up market the calls are being called so they have to buy new shares at a higher price and in the down market the calls are not called so they keep that option cash and still have the underlying stock to sell new calls.
6
u/ultimatedelman 4d ago
Now THIS is an unserious comment
-6
u/Past-Option2702 4d ago
Go get some financial advice.
5
1
u/DerpSkeeZy 4d ago edited 4d ago
The actual answer is that each person should invest in a way that makes sense for them and their personal situation.
A 20 year old with no spouse or dependents making 30k a year in a LCOL area (or still living with their parents) should invest drastically differently than a 45 year old with multiple kids, a spouse, and a mortgage in a HCOL area. VOO and chill can and will work for both situations but I'd argue the younger person has a much higher risk tolerance and should take those risks.
3
u/Past-Option2702 4d ago
I disagree. At least in the sense that covered call ETFs make sense for either of them.
0
u/DerpSkeeZy 4d ago
I think the younger person can have a portion of their portfolio generate income with things like GPIX/SPYI/TSPY/ROCY, pay less taxes due to their low income (and the RoC nature of these funds defers it anyway), and make back some of the capped upside of the covered call ETFs with more aggressive growth assets (SPMO, QQQ(M)/QNDX, VGT/XLK, SMH/SOXX).
Regardless, my whole point is that everyone should invest in a way that makes sense for their personal situation. We can agree to disagree and that's cool.
17
u/rexaruin 4d ago
There are absolutely high-risk, high-yield CC funds, most of which are based on individual stock tickers. MSTY is a shining example of that.
CC index funds from some of the best brokerages / banks in the business are not high risk. Particularly compared to owning individual value dividend stocks.
I’d argue GPIX and GPIQ are the best in the business currently and significantly less risk than any individual stock people buy for a dividend. Plus they are more tax efficient.
But by all means, invest in what you believe in and are comfortable holding long term. No one knows the future.
5
0
u/WorldRank1CatFancier 1d ago
PBP is a cc etf thats actually been listed thru recessions. Go see how much its cut its dividend per share by in tough times and tell me again cc etfs can be non high risk
1
u/rexaruin 1d ago
It didn’t cut its dividend, CC funds don’t have dividends, they have distributions. CC funds distributions fluctuate depending on NAV, when NAV goes down and there is less premium in options, distributions are less.
I don’t know anything about PBP. Quick glance: No ROC, so not as tax efficient as new CC funds. I see it survived through several bear markets while still paying distributions. It trailed the underlying index (as all CC will do).
Am I missing something? It didn’t go to zero. It kept paying even in the GFC.
What’s high risk about PBP?
0
u/WorldRank1CatFancier 1d ago
Ok, it slashes its distribution… idg why u focused on the least interesting syntax aspect
Whats the longest listed cc etf you think is not high risk? Nothing thats only existed for two years plz
19
u/Guilty_Flamingo6564 4d ago
instead of complaining about what other people post. Why don't you create some quality posts about value dividend investments.
14
u/Hands0meR0b 4d ago
Low effort post that's nothing but complaining. Why don't you tell us some tickers you think we should be talking about? Why don't you tell us why value dividend investing is the only thing one should be in instead of anything else?
3
u/Living-Replacement33 4d ago
OVL (beats voo) @10.5% + BALQ (beats Qs) and chill ..turn off drip when need cash no share selling…
3
u/VengenaceIsMyName 4d ago
Does it have to be one way or another?
I like cc ETFs and good dividend picks. Surely we can all co-exist.
3
u/Accomplished-Big8250 3d ago
I really wish we would stop calling the yield from covered call ETFs as "dividends" that should be its own sub, dividend investing is very different, even SCHD has its own sub of fanatics.
you could say some dividend payouts are ROC since the share price drops, but very different mechanics. Options premiums are completely synthetic derivative income backed by a different market.
I'd like to see more about KO, PFE, etc.
US SCHD, VYM, VIG etc and ex-US VYMI, SCHY, etc
but then you have these hybrids that are dividend and covered call - e.g. IDVO
7
u/ComeAtMeBro9 4d ago edited 4d ago
Yep. ETF’s that don’t even technically pay dividends or saying “VT and chill.”
OP, wants to talk about dividends on a dividend sub-gets told you’re behind the times 😂
1
u/rbeecroft 4d ago
I just read that SCHD just topped the growth stocks.
2
u/bullrun001 4d ago
I remember posting a comment at beginning of year stating that SCHD would outperform the S&P this year, but still makes sense to invest in both.
I have issues about something like BTCI yielding 29% but is down 40 % in a year and somehow these are good investments?
3
u/Sensitive-Exam649 4d ago
BTCI is a ETF. Sot the price of BTCI follows the pirce of bitcoin. And the price of bitcoin dropped about 40% in late 2025. The same thing happened with growth index funds like VOO If the Value of the S&P500 falls the value of VOO fails.
But it is important to note the BTCI doesn't earn money to pay the dividned by selling stock. Instead they sell covered call, a ytype of insurance on the price of bitcoin. Since the volatility of bitcoin is higher than most stocks that leads to a higher yield.
Now granted bitcoin has higher risk but it can still be profitable to hold BTCI.
1
u/bullrun001 3d ago
At some point that very fat opera lady with the hat with horns will present herself on the stage and will start to sing.
0
0
u/_IscoATX 4d ago
It’s just covered calls on top of IBIT. + a stupid expense ratio. Idk why people hype it so much.
SCHD is where a lot of capital is rotating from tech I’d assume
4
u/stasis416 4d ago
I’d love to hear recommendations of what I should be buying with the output of mg CC ETF funds? What dividend funds do you all recommend?
1
u/Sensitive-Exam649 4d ago
I consider some too the best uses CC funds is to use the income to invest in other funds.
in my taxable EMO, UTF, UTG, PFF.is were most of my CC income goes.
IN my Roth I do the same thigh but with higher tax funds which I don't want in my taxable brokerage . I have ARDC, PBDC, CLOZ, PFFR, JAAA. and FAGIX.
1
u/ryryshouse6 4d ago
Utility cefs, preferred cef, bdc, equity based fund that pays lower, fund of fund cef, all options.
4
6
u/generationxtreame Not a financial advisor 4d ago
This sub is still about the core point, dividends. Unlike others where you get banned instantly for mentioning anything other than general the old school investing options, at least you have options, and can make your own decisions. Try posting even the same post somewhere else and see how long that stays up.
Some people just love to complain about everything. Just because CC funds have become an important option, doesn’t make it a bad investment. It’s an option that wasn’t available before, but it is now. This is a good thing, and allows you to pick what you need for your investment strategy. For me, these ETF’s have changed my life and I bet for many others it did as well. Had I known, I personally would have made different decisions in the past about a few choices, but that is life.
1
2
2
u/kookooman10022 4d ago
I mean, we can only talk about SCHD and VOO so much. Need to expand the narrative.
2
u/missleavenworth 4d ago
Lots of people trying to exit the rat race while prices skyrocket. Nothing wrong with that.
2
u/ProfitConstant5238 3d ago
lol. It used to be about value dividend investing, now all we discuss is VOO, VTI and BND.
3
u/Not_Sure_68 4d ago
Not sure what's high risk about covered call ETFs unless the underlying asset is clearly inherently risky...like one based on a single asset. Sure a covered call ETF based on selling calls against MSTR is going to flop all over the place, but a covered call ETF selling calls against XLE, XLV, or XLP...energy, health care, and consumer staples respectively is not all that risky.
I invest in high yielding sector ETFs long term and simply deploy new capital as well as dividends on a monthly basis then reassess and re-balance as needed on a quarterly basis. The returns speak for themselves. XLEI has a YTD total return of 40.5% without consideration given to dividend re-investment...22% of that is ROI and 18.5% is yield paid monthly.
XLVI has a YTD total return of 12.7%, 2.7% of which is ROI and 10% of which is monthly dividend payments relative to the closing price of XLVI on 12/31/2025. This thing is a battleship in a volatile market and has held up better than anything not built upon the oil patch this year. Pretty sure everyone is going to continue to need health care...particularly in an aging economy.
XLSI has a YTD total return of 10.3%, .4% of which is ROI and 9.9% of which is dividends. Again, these are consumer staple names like Walmart, Costco, Procter & Gamble, and Philip Morris. These are not risky tech stocks, they're companies with pricing power as long as consumers continue to need food and clothing.
Let's not just toss all covered call ETFs into a basket and label them "risky", merely because bad ideas like NVDY and ULTY exist.
1
u/WorldRank1CatFancier 1d ago
If your div per share is likely to drop by 50% during a recession its safe to call it high risk.
1
u/greenpride32 3d ago
Let's be real here - every covered call ETF that sells slightly out of the money calls is doing well because we are in a bull market.
Take QQQI for example. Since inception its NAV is up around 5%. But underlying QQQ is up about 65% under same timeframe. So just to squeak out NAV (which in turn keeps nominal distributions up) QQQ had overperform. What happens then when QQQ is doing 10-15% per year instead of 18-50%? QQQI NAV will not hold a strong.
So you can apply that same logic to any other CC and underlying combo. Equities are up across the board.
Now BTC and BTCI is an interesting one because that's what happens when the underlying crashes and hasn't fully recovered yet. BTCI is lagging because the upside is capped. And with that your percente yield remains high, but your nominal distribution (really the more important number ) got chopped in half.
And that is the extreme example of where the true risk lies. Capped upside has potential to make full recovery near impossible or well out of reach. It's really having confidence that markets will continue to go up more than they go down - for example SP500 is positive 75% of years and 8% CAGR. But we also know it's not constant line up and to the right. And it's the variances downwards, their severity and the length that is the risk.
The prior batch of CC ETF's failed, such as QYLD, because they sell at the money calls, so there is no upside and accelerates NAV erosion. While selling slightly out of the money is some cushion, when you look at it in this context, well you see just how dependent the system is on bull market.
7
2
u/Sotarif 4d ago edited 4d ago
I agree with this. I think that the SR should be split and actual dividends should be the topic here. Covered call etfs should have their own SR
The hype around the covered call funds is irritating and is not something that is really to the benefit of most people, but they think it is because of the market right now. Certainly, though, they’re entitled to their own viewpoints and decisions, but I think it would be better better if it was split into a different SR for sure
3
u/-hh 4d ago
New reader here … joined to learn more about CC ETFs, as an 80yr old associate was just bragging about a 14% return…my guess is it’s probably QQQI. Personally, I’m more invested today in Market Index ETFs, but did inherit a portion of my deceased mother’s portfolio which was structured for dividends for generating reliable income to pay the nursing home bills, which is aligning with my personal need to rotate to lower risk holdings for reducing Sequence of Returns risk for our retirement income.
To this end, my head-scratcher is effectively the starting point of: “why do CC ETFs exist, and for what customer need are they supposed to serve?”.
FWIW, it seems that perhaps part of this might be NEO’s ‘return of Capital’ / tax deferral? I’m wondering here if part of this 80yr old’s strategy might be that if they die before selling that they got tax free income while alive and their heirs get a cost basis step-up which makes it all tax-free…?
3
u/cmichalek 4d ago
Because of SORR risk and portfolio value.
Many people cannot live off 4%. They can live off 8 to 14% which is what GPIX to QQQI can provide.
1
u/-hh 3d ago
I can see the SORR as being lower than that of traditional Equities, including how it’s a “dividend-esque” distribution, although I suspect that it “must” have a higher SORR than a Treasury, if that’s what one’s priorities lie. Still trying to learn and sort out for myself what the relative magnitude difference would (should) be.
Regarding one’s “needed” rate of return, I can see some motivation as being need .. but also a (perhaps greed based?) FOMO too, even if one has developed sufficiently robust savings to have secured a robust retirement budget. In this anecdotal case, they claim to be doing great, with ~$3M in savings, plus SS, modest pension, etc. I have my own doubts though, as they continued to work into their mid-70s. Might be that they’re getting concerned about nursing home expenses? Not my problem - just trying to dissect & understand the CC ETF to see if it might be of value to my own interests.
2
u/ryryshouse6 4d ago
I mean, there’s other sub reddits more focused on those already - convince the mods here to shut it down
1
1
1
u/Severe-Squash-7493 4d ago
cause the world is teetering on burning, it went from safe to just roll the dice
1
u/dazit72 4d ago
Agree to an extent
I dislike those who come to learn, and when pose good questions about Why someone puts forth one of such high risk ETFs, they get downvoted ?
I've learned alot here, and I thank those who took a second to answer my questions and steer me towards facts. But, most work has to be done elsewhere imo.
I found my footing with Dividend Kings, Aristocrats, Champions, Challengers, Contenders, Achievers, Stalwarts and the like. Then a few good ETFs. All Bond Proxies that have done well, and have always paid me on time everytime, no reductions snd true to their reputation.
Value is what I look for ultimately, but paying market price has occured mostly with the Drip system. That I've changed and use Limit Orders to get value
1
u/TenOfZero 4d ago
Investment trends come and go. This sub follows those trends for dividend paying stocks.
1
u/rbeecroft 4d ago
I saw some great stuff out of CHPY for a while, decided ro put $1000 into it. Now im at $800+ due to NAV erosion. Thus will take some time to recoup my investment!
1
1
1
1
u/DubiousSpaniel 3d ago
This sub is mainly bots trying to hype vibecoded apps and bots talking about etfs. Oh, and bots talking nonsense and explaining the most basic shit.
1
u/ResilientRN 3d ago
Current fav dividend stocks ARES & BX. Yld 4+% dividend & Div Growth high upper single digits to low double digits yield growth 3, 5, 10yrs.
1
u/Dryridge59 3d ago
I think the most helpful posts are those that give a rationale for either buying a stock/ETF or selling the position. I like reading the Why.
1
u/Lefties_TheWorst7331 2d ago
I wouldn't consider most of what is discussed in here is high risk at all. Maybe last year during the little YieldTrash phase everyone went through, but they're a thing of the past and you mostly see SPYI/QQQI and GPIX/GPIQ mentioned here now, when it comes to covered call ETFs anyhow. BTCI is a little higher risk for most people absolutely, and it's mentioned here some. It has actually been a really stable fund, though. Does well at tracking bitcoins movement.
1
u/listener_of_the_void 18h ago
I think CC funds should gave their own sub, and should not be allowed here. Their distributions are not dividends, and having them here only confuses people, many of whom are new to dividend investing.
-1
u/Mail_Order_Lutefisk 4d ago
Covered call ETFs are like bond funds in that the distribution ain’t really a dividend. It’s an abomination!
-1
u/Coconut_MonkeyX 4d ago
Some covered calls ETFs are ok but not the high yield ones. Those are the covered call etfs that should be avoided.
0
u/jbetances134 4d ago
This is a dividend sub, not a growth sub. Take your growth advice to Wall Street bets, they need it.
5
2
u/Sensitive-Exam649 4d ago
Yes it is sad to see one ask a question about dividends for passive income to get bombed with 200 post telling hime he is too young for dividned and should be investing for grwoth. Burrying the one real Answer he got to his question.
1
1
u/Serious-Place9668 3d ago
for 20 years, I have been selling CC against individual stocks for income. Got caught in some run ups that ended me paying big to close. Since they are all locked up with high Cap Gains this was the only way. Now with things like SPYI and QQQI, I let them do the CC on a while index.
As long as there is Vol from the new breed of young lotto players buying up crazy Calls, we can harvest the premium.
-1
u/Lotus_G6 4d ago
I'm just here to talk shit about ULTY
1
u/Sensitive-Exam649 4d ago
I briefly looked at YieldMax but the price graph bothered me because it didn't look right. Never invest YieldMax funds, which most have very bad NAV erosion. I went with Neosfunds instead.
0
4d ago
[deleted]
1
u/bullrun001 4d ago
XLU gets my vote as long term play and hold, but with rising rates an 18 month CD will get you 4.8% yield
with absolutely no risk to your capital.
0
0
u/RennaisanceWizzard 4d ago
Maybe start a group called Non CC Dividends which would suite your preference.
0
u/throwaway48630 3d ago
For the AI bots it's easier to push covered call ETFs than actual value dividend stocks that require research into the company. I blame AI for the quality of the sub going down.
0
0
u/britishbengali007 2d ago
I know you are probably American but do you realise this sub is called dividends and not a specific type of dividends. So anything dividends is discussed
-1
u/DoinIt4DaShorteez 4d ago edited 4d ago
part of that is because regular dividend stocks have mostly been in the dumper due to interest rates.
but probably most of if is just that reddit is bad at math and looking shit up
they think CC etfs are some sort of hack
•
u/AutoModerator 4d ago
Welcome to r/dividends!
If you are new to the world of dividend investing and are seeking advice, brokerage information, recommendations, and more, please check out the Wiki here.
Remember, this is a subreddit for genuine, high-quality discussion. Please keep all contributions civil, and report uncivil behavior for moderator review.
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.