in our roth,in this current market JEPI is my favorite investment. no tax to figure in,excellent dividends (w/drip set up)just an excellent cash position. thx for the video on jepq.interesting.
Thanks for all the work. I own both JEPI and JEPQ. I have a lot more JEPI which I have owned for a longer time, of course. I started buying JEPQ back in May, a little each month. We are having a very bad year in the stock market, so it is hard to evaluate these ETF`s but I hope they do good in the long term. I like JEPI, JEPQ, DIVO and SCHD.
Hi. I think these are good funds but we happen to be in a bear market. I will continue to dollar cost average into them and build up my positions. Simple enough!
The Average Joe Investor sold all SCHD. You might want to look at why. So far, option trading in JEPI is very lucerative. Not enough shares to trade options myself.
@@IntenseInvestor The Average Joe Investor sold all SCHD. You might want to look at why. So far, option trading in JEPI is very lucerative. Not enough shares to trade options myself.
Thanks for the info. I'm actually one of those older guys you talked about😂 looking to build an income replacement portfolio. I have JEPQ, SCHD, and a few single stocks. Last week I started looking at the overlap and decided to trim the single stocks for that reason.
Welcome! I'm headed that direction myself at some point. I think this type of income replacement portfolio can work if you are selective and have reasonable expectations. Plenty of funds that I don't like but SCHD and JEPQ are solid. Good luck and thanks for watching.
The Average Joe Investor sold all SCHD. You might want to look at why. So far, option trading in JEPI is very lucerative. Not enough shares to trade options myself.
Great video! I am getting ready to help a friend manage his retirement funds.. Gonna roll with SCHD 20%, JEPI 30%, JEPQ 20%, RYLD 20%, 10% VUG. Any suggestions?
I love your videos Dave.You make them so easy to understand and just the right amount of details plus you are calm and not so hyped like other financial channels. I have a question please. To get 637.50 a month of income, did you divide 100K into those 4 ETFs of equal value i.e 25K per funds?
Hi. Yes. The $637.50 is based on equal weight and current yields (100,000*0.0765/12). It is just an example. I would build it a bit differently and once I get a few more funds I plan to start adding that info as well. Thanks and I appreciate the compliment!
Apple & Microsoft had crap for dividends. I have both.- only a few shares thank god. I have 4 shares of Aapl and 3 shares of mICROSOFT and I am down a lot. With 30 shares of stock, the divided was $18.57 for the last month and it pays monthly-not bad for $1800.00 invested. Investing the dividends keeps raising the dividend.
I’m still 20 years away from retirement. What do you think about building a position in JPEQ outside of a retirement account so I can use the cash flow now to supplement my income?
That is the one scenario where I see it making sense for a younger person - If you want the cash now. If you don't, buy stocks and ETFs and avoid the heavy taxes. You will likely do better in the long run. However, if you are in a high tax bracket at the moment, you may also look at some other options such as MLPs or high yielding dividend stocks.
I also own SCHD, JEPI & DIVO. Solid income funds IMO. I'm close to retirement & I hate that SCHD pays quarterly instead of monthly, but will keep it. I just added $O Realty Income REIT at $62.99/share. Love the 27 years in a row of raising their dividends & the forward 4.81% yield is impressive. Thoughts on my decision?
Hey. Let me know if I was able to change your mind! Ha! I don't think these funds are for everyone but the space is interesting and goal is to help those looking for a passive way to invest for income. I see lots of NOOOOs in this space and a few that may work.
Well….., no not quite convinced. Sorry. First of all, l have JEPI ( also the other 2 in yr list), but overall l’m not happy with the “ protection “ Jepi is showing now, l thought it would be better. Furthermore l think ( like almost everyone now), that the market will tank more the next 3-9 months so l’m careful now. I’m underweight in tech now, but plan to buy more apple, google and microsoft (hopefully) near the bottom and that’s it. Use some covered calls if the time is there. Once again l have Jepi now and if the market goes down 10-20% l will buy some add schd, and maybe jepi. Still like yr vids👍👍
@@wealthadventures ajja true i have 5 more years to retire, so i am investing in this funds very heavily. Jepi, divo, jepq , Xylg and schd. Great content
Never invested in one of these funds before. For the .35% is that something that is baked into the fund itself or will my broker be taking it out of available cash (haha) in my account?
Expenses like that come out of the fund itself. Just a little bit each day. So if you invested $10,000 and the stocks and options ended up doing nothing for a year, you would have $9965.
TLTW and LQDW are two new CC funds from iShares. Expense ratios are 0.35 and 0.34. MASSIVE distributions for the first 3 months. Let us know what you think. Great videos as always. Please keep them coming.
@@wealthadventures JEPI works in my Merrill account. However, Im currently underexposed to NASDAQ stocks. That's why I'm interested in JEPQ. Turns out that JEPQ is tradable in my Fidelity IRA. One more reason why I prefer Fidelity over Merrill.
Thanks. I'm not very smart with investing if you have time can you explain the risk? Does the option strategy mean we cannot count on consistent monthly payouts? I understand this is taxed at ordinary income levels is there a better qualified div. Fund to take advantage of cap. Gains? If you have time perhaps you can share your wisdom. Thanks
Hi Alex. The monthly payouts will be inconsistent. Any real dividends from the holdings will end up long term capital gains but the option premiums will be short term. Both will move around month to month so the payouts vary. Any fund that uses options will have this component of short term capital gains or ordinary income. If you don't need the income, maybe not the right product.
Excellent Review Dr. Dave. Im going to be purchasing JEPQ at some point. Hard to say when there will be any support on the indexes as Interest rates continue to rise. Puts still seem to be the place to be right now. Thanks for the time giving us this analysis.
Hey Burke. I will probably also break this down in a future video. I would probably put a larger portion in SCHD and JEPI. I would make JEPQ and DIVO a smaller portion. Age and the amount of income you want from the distributions would also be a factor.
@@burkelange6628 Also, this is not a complete build but if limited to just these 4... personally I would be something like 35% SCHD, 35% JEPI, 20% DIVO, and 10% JEPQ.
Hi. I have 15 years for retirement. You think a simplified portfolio of equal allocation to SPY, QQQ, JEPQ and JEPI will do the trick ? I don't do any trading...
Hi. Just personal opinion, but with 15 years to go, I would lean heavier on SPY and QQQ... and I would probably use VOO over SPY unless you are writing options. If you don't need the income now JEPI and JEPQ will result in a high tax bill in a taxable account and likely underperform.
@@wealthadventures Hey thanks for the reply . My investments are in a tax deferred account . I thought I could use JEPI and JEPQ for bringing the volatility down in the portfolio. I don't have any trading skills and I can't time the market . I just need a set portfolio . May be 60% on VOO and QQQ and rest in JEPI and JEPQ is a good idea ?
@@venstomon931 If I was going to "set it and forget it" with those 4 funds I would probably go with something like 50% VOO 30% QQQ and 20% between JEPI and JEPQ.
@@wealthadventures Ive been thinking same, Narrow it down to 3-5 that are my base, and have 1 gambling etf that I might guess will trend, such as VGT or VDE
I like selling cash covered puts to enter a position also. I also like selling covered calls with a far out of the money strike price to earn a little more ROI. I also like to ROLL my covered calls if they become in the money, so I can keep the shares, and keep earning premium income.
I watched a video of a guy that allowed you to start at $19.00 but with an option, you have to guy the stock and you need 100 shares. 100 shares of QQQ is beyond my means. I 'll let the experts doit.
Wow. The popularity of these covered calls options ETFs are out of control. I hope their strategies (both growth and income) will work (safe and sustainable) for decades.
They are popular because the yield is attractive to dumb people and they are easy to make UA-cam videos about, especially if you leave out a lot of key details. They really exist for older people who failed at investing properly and need current income, but not a lot of growth (i.e. their time is short). If you invested properly when you are younger, you won't ever need to touch these.
@@spoileralert8440 Ouch. Tell us how you really feel. Lol. JEPQ mainly buys the stocks in QQQ but they are selling OTM calls as well. Hence the reason it has outperformed QQQ by 10% this year. It has been a good year to sell calls against most stocks you own if you decided to keep them this year. Anyway, what part of that is "dumb" and please explain what I should buy so that I can "invest properly". Thanks!
@@wealthadventures thanks buddy, I report them but can’t get them all. As for the covered call strategy I love it but I do shorter expirations, usually under 50 days so as to maximize theta decay and allow for early close out then sell another one. With the volatility going on one can churn out a lot of premium. The negative is it takes more work. For me this is my job so I usually close out at 50% or greater of original premium collected. I of course look at delta to theta ratio and how many days left to expiration etc. But as a loose rule close out at 50% especially if only held for a week or two. Obviously some names have better options in terms of number of expiration dates and strikes. The one above might not lend itself to that strategy. Thank you 🙏 for doing these no hype videos, I always learn something:)
@@wealthadventures no but running simulations to see if viable in an attempt to reduce workload. Much easier to keep track of a few large etfs than individual stocks. On a different note I wanted to get your macro thoughts on the economy. I am not a permabear but I think the world is in for quite the reckoning reference the reckless spending and resulting colossal debt, especially sovereign, that exists. I am seeing more and more reporting about countries on the verge of defaulting. We are again seeing the beginnings of problems in the bond market the liquidity problems. On top of a massive federal debt of over $30 trillion, more importantly to me, is the $9 trillion portfolio they’re carrying that they need to unwind. The last time they try to unwind that portfolio was 2018 I believe and it didn’t go well. This time around inflation is finally forcing the hand of governments. Imo the fed doesn’t even need to raise interest rates, it can be done by unwinding the massive portfolio. The more they sell, the lower existing bonds go, in turn, driving up yields. I suspect they raised interest rates to cover the resulting rise in interest rates as they unwind the portfolio. Now I have to admit I’ve been looking at this for at least two decades three decades and what I thought would happen hasn’t but that doesn’t mean that ultimately it won’t happen. I have very wealthy friends that are buying 5% tax free debt instruments which for them effectively pays 10% after taxes are factored in. In California if you take the top federal tax rate and the top state tax rate it’s right about 50% total. So I’m seeing a lot of money flowing into these instruments rather than the stock market it makes sense. Imo we have another 13% down in The S&P 500 to get back to historic pe norms. The overshoot could be even further during a final capitulation. I don’t buy The s and P 500 but it’s a gauge I use. When buying a stock or selling options I only deal with stocks that I am willing to own, good well run proven companies this way if something cataclysmic happens I’m still invested in something that will come back eventually. Anyway, rambled a bit but bottom line my opinion is we have a perfect storm for a worldwide financial crisis: Russia Ukraine war and possible larger conflagration, the energy Shock caused by it in Europe and the war on domestic energy by the Biden ministration, china’s insane zero Covid policy, substantial inflation, ballooning national debt, and the rising cost of servicing those debts at higher interest rates. It’s one thing carrying a $30 trillion debt at 0% interest rates it’s a whole Nother when you’re looking at 4% or higher that’s a massive change. OK my friend what do you think :-)
@@Robert-di3kv Feel better now?😂Reminds me of Jeremy Siegel going off recently on CNBC about FED going to far. Unfortunately, I do echo much of what you laid out. Fed is pot committed at this point! Lots of macro headwinds that will keep the stock market shaky over the next few years with a WIDE possibility of conclusions. I'm in the camp that we will NOT see new highs in the S&P for a few years at minimum. That is one of the reasons I'm so active selling options. I'm expecting lower lows in the S&P still but I don't think it will be overly dramatic. Hopefully, that is the extent and we can avoid any further global instability. Here in Ohio the economy still feels decent. Car lots still have low volume and commercial real estate is in high demand. What type of 5% tax free debt investments are your friends making?
Thank you for taking the time to explain how the ELNs work.
in our roth,in this current market JEPI is my favorite investment. no tax to figure in,excellent dividends (w/drip set up)just an excellent cash position. thx for the video on jepq.interesting.
Thanks Christopher. I do prefer the setup for JEPI over JEPQ but I'll be adding a little of both over time.
About to do the same with my Roth. JEPI and JEPQ, both DRIP!!!! May get 75% JEPI and 25% JEPQ as Q is newer.
New subscriber Dave
Watched and liked!
Started a position in Jepq last month.
Hi. Thanks for subscribing! Appreciate it. Looks like a good income fund!
Thanks for all the work. I own both JEPI and JEPQ. I have a lot more JEPI which I have owned for a longer time, of course. I started buying JEPQ back in May, a little each month. We are having a very bad year in the stock market, so it is hard to evaluate these ETF`s but I hope they do good in the long term. I like JEPI, JEPQ, DIVO and SCHD.
Hi. I think these are good funds but we happen to be in a bear market. I will continue to dollar cost average into them and build up my positions. Simple enough!
Im currently in SCHD, JEPI, and DIVO. SCHD is the largest holding I have.
The Average Joe Investor sold all SCHD. You might want to look at why. So far, option trading in JEPI is very lucerative. Not enough shares to trade options myself.
@@IntenseInvestor The Average Joe Investor sold all SCHD. You might want to look at why. So far, option trading in JEPI is very lucerative. Not enough shares to trade options myself.
@@wealthadventures I agree.
Amazing Content! Thanks for Sharing!
Thanks for watching!
I hold JEPQ in my HSA with SCHD and O.
Thanks for the info. I'm actually one of those older guys you talked about😂 looking to build an income replacement portfolio. I have JEPQ, SCHD, and a few single stocks. Last week I started looking at the overlap and decided to trim the single stocks for that reason.
Welcome! I'm headed that direction myself at some point. I think this type of income replacement portfolio can work if you are selective and have reasonable expectations. Plenty of funds that I don't like but SCHD and JEPQ are solid. Good luck and thanks for watching.
The Average Joe Investor sold all SCHD. You might want to look at why. So far, option trading in JEPI is very lucerative. Not enough shares to trade options myself.
New subscriber. Love your content with your own portfolio and no BS!
Thank you!👍
Thanks for the killer analysis as usual, Dave!
Thanks Jeff!
Great video!
I am getting ready to help a friend manage his retirement funds..
Gonna roll with SCHD 20%, JEPI 30%, JEPQ 20%, RYLD 20%, 10% VUG. Any suggestions?
Hi Jordan. I'm not a fan of RYLD but the rest are decent options IMO.
I love your videos Dave.You make them so easy to understand and just the right amount of details plus you are calm and not so hyped like other financial channels. I have a question please. To get 637.50 a month of income, did you divide 100K into those 4 ETFs of equal value i.e 25K per funds?
Hi. Yes. The $637.50 is based on equal weight and current yields (100,000*0.0765/12). It is just an example. I would build it a bit differently and once I get a few more funds I plan to start adding that info as well. Thanks and I appreciate the compliment!
Apple & Microsoft had crap for dividends. I have both.- only a few shares thank god. I have 4 shares of Aapl and 3 shares of mICROSOFT and I am down a lot. With 30 shares of stock, the divided was $18.57 for the last month and it pays monthly-not bad for $1800.00 invested. Investing the dividends keeps raising the dividend.
Hi Rosalie. They don't pay big dividends but they will grow them with time.
I’m still 20 years away from retirement. What do you think about building a position in JPEQ outside of a retirement account so I can use the cash flow now to supplement my income?
That is the one scenario where I see it making sense for a younger person - If you want the cash now. If you don't, buy stocks and ETFs and avoid the heavy taxes. You will likely do better in the long run. However, if you are in a high tax bracket at the moment, you may also look at some other options such as MLPs or high yielding dividend stocks.
I also own SCHD, JEPI & DIVO. Solid income funds IMO. I'm close to retirement & I hate that SCHD pays quarterly instead of monthly, but will keep it.
I just added $O Realty Income REIT at $62.99/share. Love the 27 years in a row of raising their dividends & the forward 4.81% yield is impressive. Thoughts on my decision?
Hey Steve. I own some O. Solid REIT. We may see it go lower but dividend looks safe and debt looks manageable. If we see the 50's I may add.
O dividend growth rate has kept me from buying it. Dividend is also non-qualified. I really like your holding SCHD.
Before watching yr vid, l already can answer this for me: NO, not for me, and now: l start watching yr vid. And have a great Sunday!
Hey. Let me know if I was able to change your mind! Ha! I don't think these funds are for everyone but the space is interesting and goal is to help those looking for a passive way to invest for income. I see lots of NOOOOs in this space and a few that may work.
Well….., no not quite convinced. Sorry. First of all, l have JEPI ( also the other 2 in yr list), but overall l’m not happy with the “ protection “ Jepi is showing now, l thought it would be better. Furthermore l think ( like almost everyone now), that the market will tank more the next 3-9 months so l’m careful now. I’m underweight in tech now, but plan to buy more apple, google and microsoft (hopefully) near the bottom and that’s it. Use some covered calls if the time is there. Once again l have Jepi now and if the market goes down 10-20% l will buy some add schd, and maybe jepi. Still like yr vids👍👍
@@emphyrio Sounds like a plan!
Love Jepq for slow growth, but great income
Hey. I'm looking forward to any type of growth at this point! Slow would be fine with me. Lol.
@@wealthadventures ajja true i have 5 more years to retire, so i am investing in this funds very heavily. Jepi, divo, jepq , Xylg and schd. Great content
Excellent video
Thank you
Thanks Mr King!
Never invested in one of these funds before. For the .35% is that something that is baked into the fund itself or will my broker be taking it out of available cash (haha) in my account?
Expenses like that come out of the fund itself. Just a little bit each day. So if you invested $10,000 and the stocks and options ended up doing nothing for a year, you would have $9965.
Love your videos. I already own the same 4 ETFs as you. I would love for you to do a video on CDC, which I also own.
Hi Bennie. Thanks! I looked at CDC briefly and plan to take a closer look.👍
@@wealthadventures Thanks, it has great Total Returns, high Sharpe Ratios, Morningstar 5 Star for both 3 & 5years (not 10 years old yet), etc.
TLTW and LQDW are two new CC funds from iShares. Expense ratios are 0.35 and 0.34. MASSIVE distributions for the first 3 months. Let us know what you think. Great videos as always. Please keep them coming.
I will check them out Rob. Thanks for passing along!
I tried to buy JEPQ in my 401 with Merrill today"
"This security is currently blocked and unavailable for trading"
Too bad.
Hi Hans. Interesting. Some plans will limit investments. It is relatively new. Does it allow you to invest in JEPI?
@@wealthadventures JEPI works in my Merrill account. However, Im currently underexposed to NASDAQ stocks. That's why I'm interested in JEPQ. Turns out that JEPQ is tradable in my Fidelity IRA. One more reason why I prefer Fidelity over Merrill.
@@hansschotterradler3772 Strange. I have not used Merrill but do like my setup on Fidelity.
Thanks. I'm not very smart with investing if you have time can you explain the risk? Does the option strategy mean we cannot count on consistent monthly payouts? I understand this is taxed at ordinary income levels is there a better qualified div. Fund to take advantage of cap. Gains? If you have time perhaps you can share your wisdom. Thanks
Hi Alex. The monthly payouts will be inconsistent. Any real dividends from the holdings will end up long term capital gains but the option premiums will be short term. Both will move around month to month so the payouts vary. Any fund that uses options will have this component of short term capital gains or ordinary income. If you don't need the income, maybe not the right product.
@@wealthadventures thanks very much
Excellent Review Dr. Dave. Im going to be purchasing JEPQ at some point. Hard to say when there will be any support on the indexes as Interest rates continue to rise. Puts still seem to be the place to be right now. Thanks for the time giving us this analysis.
Thanks Dave. I continue to be aggressive selling calls on my positions. We shall see! I feel like there is a lot of cash waiting to be deployed.
What are your thoughts on CCD ?
Hi. I will have to check it out. I have not looked much at funds that use convertible securities. Usually not a fan of CEFs simply due to the fees.
Hey Dave what percentage for each in that income portfolio? 25% each of the 4 funds?
Or how would you build yours?
Hey Burke. I will probably also break this down in a future video. I would probably put a larger portion in SCHD and JEPI. I would make JEPQ and DIVO a smaller portion. Age and the amount of income you want from the distributions would also be a factor.
@@burkelange6628 Also, this is not a complete build but if limited to just these 4... personally I would be something like 35% SCHD, 35% JEPI, 20% DIVO, and 10% JEPQ.
Hi. I have 15 years for retirement. You think a simplified portfolio of equal allocation to SPY, QQQ, JEPQ and JEPI will do the trick ? I don't do any trading...
Hi. Just personal opinion, but with 15 years to go, I would lean heavier on SPY and QQQ... and I would probably use VOO over SPY unless you are writing options. If you don't need the income now JEPI and JEPQ will result in a high tax bill in a taxable account and likely underperform.
@@wealthadventures Hey thanks for the reply . My investments are in a tax deferred account . I thought I could use JEPI and JEPQ for bringing the volatility down in the portfolio. I don't have any trading skills and I can't time the market . I just need a set portfolio . May be 60% on VOO and QQQ and rest in JEPI and JEPQ is a good idea ?
@@venstomon931 If I was going to "set it and forget it" with those 4 funds I would probably go with something like 50% VOO 30% QQQ and 20% between JEPI and JEPQ.
@@wealthadventures Thank you for the guidance. I appreciate it 🙏
Thoughts on SDIV?
Hi. I'm not a fan. Exposure to some riskier investments that I would personally avoid.
How many funds do you hold in your complete portfolio?
Too many! Definitely an area for improvement for me. However, I'm starting to focus more on a few.
@@wealthadventures Ive been thinking same, Narrow it down to 3-5 that are my base, and have 1 gambling etf that I might guess will trend, such as VGT or VDE
@@mindofJason That should be plenty.
Thanks, Dave for the deeper look into JEPI, and JEPQ. However, JEPQ is not optionable. I like to enter into ETF´s by selling puts.
Hi. As the fund matures I imagine it will begin to offer options similar to JEPI. Thanks for watching!
I like selling cash covered puts to enter a position also.
I also like selling covered calls with a far out of the money strike price to earn a little more ROI.
I also like to ROLL my covered calls if they become in the money, so I can keep the shares, and keep earning premium income.
A far as I can see they do monthly options.
My portfolio so far is 50% SCHD 15% JEPQ 15% O 20% VGT what do you think?
Great start!
Thanks sir.
Welcome! Thanks for watching.
Love me some dividends but with the market tanking lately, my current play is to get aggressive on CAT & GNRC.
Hi Tym. CAT fundamentals are starting to look attractive. Good luck!
I watched a video of a guy that allowed you to start at $19.00 but with an option, you have to guy the stock and you need 100 shares. 100 shares of QQQ is beyond my means. I 'll let the experts doit.
Sounds good
Wow. The popularity of these covered calls options ETFs are out of control. I hope their strategies (both growth and income) will work (safe and sustainable) for decades.
Hey. I think if we are selective some show promise. I feel the same way about selling options myself.
They are popular because the yield is attractive to dumb people and they are easy to make UA-cam videos about, especially if you leave out a lot of key details. They really exist for older people who failed at investing properly and need current income, but not a lot of growth (i.e. their time is short). If you invested properly when you are younger, you won't ever need to touch these.
@@spoileralert8440 Ouch. Tell us how you really feel. Lol. JEPQ mainly buys the stocks in QQQ but they are selling OTM calls as well. Hence the reason it has outperformed QQQ by 10% this year. It has been a good year to sell calls against most stocks you own if you decided to keep them this year. Anyway, what part of that is "dumb" and please explain what I should buy so that I can "invest properly". Thanks!
👍
Thanks Ray!👍
Bought 102 shares last week lol time in the market is better than timing the market.
So far so good! Good luck to you.
Maybe just wait until the 7th son (or daughter)...
Well... In the real world 2 was enough for me!
Look at all the scams in the comments!!!!!
Hey Robert. Yup. Getting messy but will try and clean it up.
@@wealthadventures thanks buddy, I report them but can’t get them all.
As for the covered call strategy I love it but I do shorter expirations, usually under 50 days so as to maximize theta decay and allow for early close out then sell another one. With the volatility going on one can churn out a lot of premium. The negative is it takes more work. For me this is my job so I usually close out at 50% or greater of original premium collected. I of course look at delta to theta ratio and how many days left to expiration etc. But as a loose rule close out at 50% especially if only held for a week or two. Obviously some names have better options in terms of number of expiration dates and strikes. The one above might not lend itself to that strategy. Thank you 🙏 for doing these no hype videos, I always learn something:)
@@Robert-di3kv Hey Robert. Interesting! Thanks for sharing. Do you mainly use the indexes?
@@wealthadventures no but running simulations to see if viable in an attempt to reduce workload. Much easier to keep track of a few large etfs than individual stocks.
On a different note I wanted to get your macro thoughts on the economy. I am not a permabear but I think the world is in for quite the reckoning reference the reckless spending and resulting colossal debt, especially sovereign, that exists. I am seeing more and more reporting about countries on the verge of defaulting. We are again seeing the beginnings of problems in the bond market the liquidity problems. On top of a massive federal debt of over $30 trillion, more importantly to me, is the $9 trillion portfolio they’re carrying that they need to unwind. The last time they try to unwind that portfolio was 2018 I believe and it didn’t go well. This time around inflation is finally forcing the hand of governments. Imo the fed doesn’t even need to raise interest rates, it can be done by unwinding the massive portfolio. The more they sell, the lower existing bonds go, in turn, driving up yields. I suspect they raised interest rates to cover the resulting rise in interest rates as they unwind the portfolio.
Now I have to admit I’ve been looking at this for at least two decades three decades and what I thought would happen hasn’t but that doesn’t mean that ultimately it won’t happen. I have very wealthy friends that are buying 5% tax free debt instruments which for them effectively pays 10% after taxes are factored in. In California if you take the top federal tax rate and the top state tax rate it’s right about 50% total. So I’m seeing a lot of money flowing into these instruments rather than the stock market it makes sense. Imo we have another 13% down in The S&P 500 to get back to historic pe norms. The overshoot could be even further during a final capitulation. I don’t buy The s and P 500 but it’s a gauge I use. When buying a stock or selling options I only deal with stocks that I am willing to own, good well run proven companies this way if something cataclysmic happens I’m still invested in something that will come back eventually. Anyway, rambled a bit but bottom line my opinion is we have a perfect storm for a worldwide financial crisis: Russia Ukraine war and possible larger conflagration, the energy Shock caused by it in Europe and the war on domestic energy by the Biden ministration, china’s insane zero Covid policy, substantial inflation, ballooning national debt, and the rising cost of servicing those debts at higher interest rates. It’s one thing carrying a $30 trillion debt at 0% interest rates it’s a whole Nother when you’re looking at 4% or higher that’s a massive change. OK my friend what do you think :-)
@@Robert-di3kv Feel better now?😂Reminds me of Jeremy Siegel going off recently on CNBC about FED going to far. Unfortunately, I do echo much of what you laid out. Fed is pot committed at this point! Lots of macro headwinds that will keep the stock market shaky over the next few years with a WIDE possibility of conclusions. I'm in the camp that we will NOT see new highs in the S&P for a few years at minimum. That is one of the reasons I'm so active selling options. I'm expecting lower lows in the S&P still but I don't think it will be overly dramatic. Hopefully, that is the extent and we can avoid any further global instability. Here in Ohio the economy still feels decent. Car lots still have low volume and commercial real estate is in high demand. What type of 5% tax free debt investments are your friends making?
Algonquin Power & Utilities AQN INVEST IN THIS NOW AND BE A MILLIONAIRE IN A YEAR !
It’s at $7 now. What’s a great entry point?