Income Investing

US Market & Sectors
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Anybody looking at income investing with ETFs like YieldMax’s TSLY, MSTY etc.?

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Yes I Am in for investing ETF

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Not yet. But was on my watchlist. Have you invested in those or planning to?

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I am hearing about this for the first time. What is the benefit of investing in these ETFs compared to S&P500 or other stocks in general?

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please explain me which are you type of investor? after that i will tell what is best for you?

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Hi @Rohit_Vector_488, for an investor with medium risk/reward ratio, let’s say 2-3 year horizon, what do you recommend?

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YieldMax is using a covered call strategy to generate income on a securities such as TSLA, AAPL and other tech stocks that generally don’t have high dividend yields. The way they are generating income is by:

  • Creating a synthetic long exposure: they are buying a long call option and sell a put option to replicate the price movement of TSLA. The reason they are doing this is to minimise the capital investment that is required to actually the TSLA stock
  • They are are writing call options on the stock to general the income
  • Additionally they are buying US treasuries to generate additional income

One thing that you have to watch out for is the tax on the income that is generated through these strategies.If you are interested in these type of opportunities, do check out JPEI or FYEE, that have an investment objective to generate income.

These ETFs have lower expense ratio, higher diversification, and distribution yield of close to 8%. Lastly, these are very advanced ETFs and only to be looked at as part of an overall strategy and by folks who actually understand them well

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