One thing I find funny—and a little confusing—is when people criticize ETFs like $QQQI and $SPYI as being “too risky,” but then have no problem putting money into individual stocks like $MU or $SPCX that could literally go to zero. Over the past few days, I’ve been posting about these two ETFs, and the amount of controversy has surprised me. Don’t get me wrong, they’re not risk-free. I understand that their long-term price appreciation will likely be much lower than a traditional growth ETF. But in exchange, they can generate a high level of income, much of which is currently treated favorably for tax purposes under U.S. tax rules. That’s the trade-off. Also, I’m not talking about putting 50% of my portfolio into them. My plan is to allocate no more than 10% of my portfolio to these income-focused ETFs. I’m not saying they’re perfect investments. I just find it interesting how differently people define risk. What am I missing? Why do you think these ETFs get so much hate?
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40 Comments
Colin O
@fireguy30 · 4mo
You could post about how much you care about your kids and these days and someone would hate on your comment. Do your own thing. Keep people like that out of your life and ignore them online. You'll be happier for it!
Canadian Investor@canadianinvestor · 4mo
The longest running covered call fund I can find is PBP dating back to 2007. They use a different strategy write call on the SP 500 have a posted yield of about 10% If you spent all the distributions you would have a positive return thats what the product was designed to do. It massively under performs if you reinvested back into the fund vs just buying the SP 500 These are tools Find the ones to use that help you achieve the goal you have. Not sure why people get so worked up over other peoples money and portfolios 🤷
Carlos L@retirement_rants · 4moEdited
TSPY has out performed SPYI Same deal with TDAQ against QQQI. They also both offer higher yield than their NEOS counterparts. 0DTEs appear to be outperforming in this scenario. I currently hold all four, but I’m slowly reinvesting more into TappAlpha
Adriano Starinieri
@adrian_pii · 4moEdited
People hate what they don’t understand (to say it as nicely as possible) . Them saying they are “risky” is a dead giveaway
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