Outperforming the S & P 500 YTD w/High Yield Funds
At the beginning of the week, my portfolio was recovering very nicely, but a sharp sell off at the end of the week knocked my portfolio off its high horse. Earlier this week, I showed that I have received 90% of my cost basis back in cash dividends since August of 2024. This week, I face a choice with what to do with the $16,000 I am going to put into my portfolio. Truthfully, I have gone back and forth on it. I could double down on CHPY and GPTY and rebuild YRAM and DRMY with the $16,000, but would I be able to get return on investment in the form of dividends within about 2 years again? I believe semiconductors and AI have a bright future in regards to performance, but I am not so sure I would be able to get ROI again within two years. Not to mention, while $CHPY and $GPTY have been doing well, if IV stays high and its underlying isn't doing extraordinarily well, you are going to see NAV erosion. It isn't a question of if these funds' NAV will erode, it's a question of when. Although, I think semiconductors are much better for these type of funds than most sectors. So, I am thinking about the long term. I want to hold CHPY and GPTY because I believe they will continue to do well going forward, but, with this new money I am putting in, I am strongly considering investing them in income funds that are not as aggressive while hanging on to what I have with CHPY and GPTY. And, if CHPY and GPTY continue to do extraordinarily well, I will still benefit heavily because I already have a bunch of money in the semi/AI sector through these funds. Another reason why I am considering putting the new money into lower yielding funds is because I am in need of less cash flow from my investments compared to what I assumed I would need. Right now, I already get paid enough in dividends to cover the necessities. I want to do better than that, of course, but I have other sources of income right now such as book royalties and gig work that I do part time as needed as I build out what's next in my career. There seems to be little point in aggressively pursuing option income with a significant new deposit when I am not in need of the income and when that income I am not using will be taxed eventually. As for the outlook of AI and semiconductors, they remain the most profitable companies in the industry. Demand remains high and AI players are keeping CapEx steady for raising CapEx. This bodes very well for semiconductors. If you are not happy with your cost basis in CHPY or GPTY and you really want to own more of the funds, or, if you have none at all, this is a VERY good time to buy.
218 views
0 Comments
No comments available.
Join the conversation with 500,000+ other investors 💸
Create an account to get access to everything Blossom has to offer!
📊 Personalized algorithm based on your investing style, experience level and interests
📈 Powerful portfolio and dividend tracking tools
👀 See what top creators and others in the community are investing in
