With the way the market is moving, we'll mostly hold for longer than 2025 to realize profit gain, I think a video on "How to profit from the present market" will be more effective, I mean I've heard of people making up to 250K within few months and I'd like to know how.
It’s precisely at times like these that investors need to be on guard against the next certainty. You don’t have to act on every forecast, hence i will suggest you get yourself a financial-advisor that can provide you with entry and exit points on the shares/ETF you focus on.
The 1% Millionaires stay rich by staying off high interest debts and investing passively. Personally i made my first million from having investments that spreads across stocks, etfs, coins and bonds.What i can say to early investors is diversification and solid management..at this point I'm actually grateful for my advisor Colleen Janie Towe. it's been great.
Do your due diligence and opt for one that has tactics to help your portfolio continue consistent and steady growth. "Colleen Janie Towe" is accountable for the success of my portfolio, and I believe she has the qualifications and expertise to accomplish your objectives.
Thanks for your guidance . I will search on her site online and do my due diligence. If She seem proficient. I write her an email and scheduled a phone call.
I've watched sooo many videos trying to understand JEPI the best way I can and I can say this is the best one I watched. So clearly explained. Thank you
A lot of folks have been going on about a January rally and said mutual funds [ETF] stocks that would be experiencing significant growth these festive season, any idea which stocks/mutual funds this may be?
@@tatianastarcic True, we’re only just an information away from amassing wealth, I know a lot of folks that made fortunes from the Dotcom crash as well as the 08’ crash and I’ve been looking into similar opportunities in this present market, could this coach that guides yo help?
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I hold 4000 shares of JEPI in a retirement account. The monthly dividend has served to subsidize a huge portion of my RMDs. I am strengthening my position in Jepq to prepare for when Tech stocks rise again. You were adamant about not spending the income however I have not sold off any shares and done just fine spending the income
I was with you until near the ending when you compared it against qyld. Qyld writes at the money covered calls on 100% of the portfolio, so they will constantly erode. Jepi writes out of the money covered calls on a PORTION of the portfolio. Big difference.
Exactly. Completely unfair comparison. Apples and oranges. He picks the worst ETF and compared JEPI with it. JEPI has a completely different investment strategy.
One of the best videos I have seen on covered ETFs. As you say other content producers suggest you can take the 12-15% yield on QYLD and retire on $250,000. You covered the technicalities as clearly as possible in a short video.
1. JEPI sells out-of-the-money calls. This means that ALL the gains are not given away. 2. The ELNs are based on the S&P 500 index. Thus, JEPI does not ever lose holdings when the covered call goes against it. JEPI is 15% of my portfolio; I'm retired (early) and live off dividends.
if you sell covered calls so far out of the money that your stock never gets called away, your returns will be so low us treasuries would be a better investment. which means jepi is not selling calls that far out of the money and they will get hit from time to time. they will either have their stock called away, or they will have to roll the options which is expensive
Time in the market is better than timing the markets. One of my favorite quote from Ken Fisher. This has been one of the reason people don't make it in financial markets, cos they don't understand time. You get in on time, you would make profits other than buying the hype and later losing out.
@@danalves47 You're correct, reason why I work with a financial advisor. Risk management, early entry and exits points, access to own stocks which is isn't available to the general public, these are few of many advantages. My life has changed and my approach to financial market better with lot of profits.
@@borilam293 Sheila Maureen Oneill is my financial advisor, I met her during a conference in new york, she's one of the best out there. She would do well to guide you.
Hi Nathan! I was was one of your subscribers requesting this video so thanks! A couple of points, first my understanding is that JEPI is the ETF version of an older mutual fund called JEPIX that goes back to 2018 so you have some more performance data to consider. Second, I am not sure QYLD is a fair comparison with JEPI since it is not known where JEPI writes it’s covered calls. Confirming where JEPI writes its calls would go a long way to adding confidence in its performance. I have a mix of JEPI and SCHD in my dividend income portfolio and have been very happy compared to the overall market.
There was a recent interview, about 2-3 months back, where the fund manager said they are slightly out of the money. i think that is a good thing, in terms of being able to maintain the NAV.
I would add QYLD writes its calls systematically monthly on its (I believe) entire portfolio. Blindly writing calls on an entire portfolio can lead to turnover and value loss. JEPI and JEPQ writes its calls a significantly smaller ratio. Being actively managed allows for strategic calls and hopefully less turnover in stocks.
There are a lot of strategies to make a tongue-wetting profit that the average Joe don't know. Personally, the financial market for me seems the only way forward with my long time horizon (accrued roughly $457k in gains since Mid 2021 ) but if you don’t have that fortune of time it’s a tough market out there almost nowhere feels safe!
If you’ve got patience I believe it’s a great time to invest… I’m no expert but as Warren buffet said he’s seen this happen a number of times throughout his life
I've known I had wanted to start investing for a few months but just haven't been brave enough to start due to the market so far this year. I have $60k I want to transfer into an S&S ISA but it's hard to bite the bullet and do it. $457 is a huge milestone, Please what's your strategy? I will love to have an insight
I began with a fiduciary portfolio advisor by the name *MARTHA ALONSO HARA* . She’s verifiable and her works ethics is in accordance with the US investment act of 1940. Her approach is transparent allowing total ownership and control over my portfolio with fees very reasonable in comparison with my investment income. Also, She covers things like investment insurance, ensuring retirement is well funded, and discussing tax advantages and ways to have a volatility buffer for investment risk. many things like that.
*MARTHA ALONSO HARA* really seems to know her stuff. I looked her up on the web using her full name and found her page, read through her resume, educational background, and qualifications and it was really impressive. She is a fiduciary who will act in my best interest. So, I'll book a session with her
Great analysis. Would have loved to see a comparison to SCHD instead of VIG. SCHD is only down -0.44% YTD vs -1.57% for JEPI. There’s no thesis or data supporting holding JEPI over SCHD for the equivalent amount of “income” being distributed. No capped upside for SCHD and a foundation of dividend growth. No debt instruments involved. 600% less in management fees. Add in the favorable tax treatment of its dividends and it really isn’t close.
My preference would also be for SCHD between that and JEPI. But I do think JEPI provides some interesting diversification for someone who would like to diversify against a bear market or a sideways market.
@@NathanWinklepleckCFA it definitely isn’t a bad fund for those purposes and the lower volatility and high income could provide more “sleep well at night” feelings when most investors are feeling max pain. A comfortably-held JEPI is certainly much better than a panic-sold SPY in a bear market. The data shows most retail investors don’t behave in such a way to see the true long term returns of the market. Maybe funds like JEPI could help improve those numbers.
Great video. I have a friend high up within JPM that recommended JEPI, back in 2020, specifically for my roth IRA to avoid the taxes and to keep the cash flow coming in. I can confirm that for a downward/choppy market, JEPI is solid pick. However, for a rising market JEPI is also a solid backup/reinforcement for whatever you're using as your value/growth fund. My friend recommended sitting on cash and use the JEPI dividends to re-investment more into in a sp500 fund, such as VOO or SPY, when the market finally pivots and begins going back up. JEPI itself is ok, but using it with what outpreforms or keeps up with the markets is the key. For example, 2020 and 2021, VGT with JEPI, massive technology growth with JEPI = big win, last year, as the market corrected, I swapped VGT for XLE. XLE along with JEPI in my roth, this combination of growth and reinvesting monthly dividends along with a monthly contribution crushed the market, XLE was up over 50% while jepi fell about 14%, however jepi made up the 14% from the dividends. The key is to have JEPI with a solid fund that beats/keeps up with the market. IMO, 2023 any sp500 after q1 along with jepi. Maybe with more risk go back to VGT/QQQ. Good luck to everyone!
Your strategy is non-sensical. If you’re putting all the dividends into a different fund, then logically you should liquidate your JEPI holdings and put the cash into those funds as well.
@@IndexInvestingWithCole No, I shouldn't. There is no way I can know exactly what will do well in the future, nor will I ever put all my funds into a single stock/etf/fund. The cashflow accumulated along with my contributions over the long term will be better down the road than now. I prefer a solid foundation of cashflow along with growth. In order to do that, I'm gonna have to sacrifice some growth short-term. In the past 3 years, I've made a little over 5k in JEPI dividends alone, so at current pace, ever 4-4.5 years, I'm able to squeeze an extra year of cash into my Roth, and choose where to invest depending on current data. So unless i know exactly where to move my funds, then sure ill take more risk and buy more. However, what if I'm wrong and what I invest in doesn't preform well? Thats why its good to extra cash ready on the side to adjust and minimizes losses. So my preference is establishing a solid cash flow base short-term, so more can be invested longterm. On top of that, i wont see this money for at least another 20 years. Im purposefully setting up my roth for more cash flow than growth. Whereas my 401 and other investment accounts are for growth, so I take more risk in the small and mid caps. That post was 6 months ago, and with the data I had, it looked like it would be a good idea to use the extra cash for certain domestics etf. Example, the tech sector is killing it, so vgt, qqq, and close others are killing it. However, with the current data, international funds are beating the the sp500, with the exception of blue chip funds, I believe if you follow any Russell 1000 value/growth funds they should be up 45-50%, right along the nasdaq example fbgrx and say vgt. But I'm expecting a pullback when Powell speaks next week. So again that extra cash flow is going allow me to buy more over the long term. I wouldn't liquidate jepi because having the extra 1.5-2k annually in cash flow in a Roth is amazing and it continues to go up as i maintain the balance i have for jepi and other etfs in my portfolio. Especially the tax free part. Jepi is about 90% options, so all taxed at ordinary, while 10% are qualified.
In 20 years? What in the world are you doing? and why are you investing into an income fund? JEPI is not a growth fund. In 20 years you'll kick yourself when you realize what you are doing. JEPI will never outperform the stocks in holds in the long term.
@@J-D248 I don't invest in jepi for growth, I never said that. I use it for generating cash flow. I use that cash along with my contributions and invest in other funds that do grow significantly more. I'm willing to cut bit of growth so I can increase the cash flow into my Roth in order to invest more into other funds to accelerate growth down the road. Examples, a few years back, 2021, VGT gave me 26% returns and JEPI was also up 6%. I made an extra 1.6k in dividends to reinvest. In terms of raw value I was 'down' a few thousand had I went completely in vgt which was ~2% difference. 2022, I liquidated vgt and swapped it for xle and bought more jepi. I was able to put 6k of contributions and the extra 1.6k from dividends into xle as the year when on. My returns were over 50%, while anyone who followed any sp500 fund was down over 20%. I ended the year with over 1.9k dividends, i was 'down' a few hundred when i compared to going fully into vgt and then into xle from 2021-2022. 2023, in January, I sold all my xle and went back into tech and bought vgt again. The margin of how much I miss from going all in on growth with no cash flow is slowly eroding away. So think about, if I'm putting the max 6500 this year and an few extra thousand from from dividends now vs someone who is putting all 6500 into growth, with no or very little extra cash flow, what happens? In the short term, most people will have better returns, however what will happen as I'm able to invest more because of the increased cash flow over time? I'll out-pace those same people way further down the road. I'm trying to optimize growth and cash flow. Going strictly 100% growth means very little cash flow, the other extreme is way worse, there's no growth lol. So I'm finding that sweet spot. I won't be kicking myself at all. My roth isn't my only investing account. I have a purpose for my roth and I've stuck to it for a long time, and I'm very pleased. I don't like holding stocks in my Roth. I buy stocks in my brokerage account, so I can have access to the gains without being penalized and i can access the money now. So example, stocks I bought in 2020 post covid were like MOS, CF. then I sold them in 2022 and bought First solar because of what I was hearing about the inflation reduction act and the amount of money that was going to flow into solar, hydrogen, ev stocks. That type of more of active trading/investing that I enjoy in my brokerage account, not a retirement account.
Great analysis. Jepi is great for income and I think occasionally you have to re-invest the dividends and not continuously spend the money as you said. My mom has been in it for over a year and loves the income.
That was a great over view Nathan. You confirmed much of my own research with some different sources which is a confidence builder of course. For me personally, I am utilizing JEPI as a bond alternative. I was very impressed in how it performed, especially in this recent bear market in bonds, versus even the treasuries. My feeling is that it is also a great boost to utilize for building an income stream to enhance your rate of reinvest into lower dividend yielding vehicles that I intend to buy and hold, such as Apple and Microsoft. I see it as kind of “front-loading” my income to offset the lower dividends I receive in positions such as Apple, Microsoft and UNH. Throw in DIVO (another covered call ETF I would love to see you review btw) and SCHD and you have the foundation for a strong Dividend base around which you could build a few individual stocks when great value opportunities allow to build up your DGR and Yield. Thanks again sir!
Excellent breakdown. I wasn’t sure if I wanted to sink some money into JEPI before I watched this video. I’m still not 100% certain this is an investment for me, but you have helped allay some of my uncertainty.
One thing I don't like about SCHD (one of my favorite core ETF's) is that if you're holding a large position and you want to sell covered calls against it in a sideways or even bear market, the options premiums are pretty much garbage, even ATM, meaning that you assume a much higher risk of your underlying being called away in an unexpected market upswing, while not collecting enough premium to justify that risk. JEPI seems like it would be a great holding to pair with a core fund like SCHD, since it does the call writing for you, with much higher premiums collected, minimal risk, and a very attractive expense ratio when considering what you're getting for the money.
Exactly I like to take the dividends from JEPI and reinvest some back into Jepi and some into s c h d along with a little growth. Like SCH X. I feel like that's a well-rounded approach with jepi and has been working for me this year.
even if you are selling covered calls on a volatile stock like tsla if you don't want your stock to get called away you will have to sell so far otm you might be better off just buying us treasuries. jepi risks their stocks being called away or rolling. obviously they are rolling which can get expensive. if the market blasts higher jepi could be hurt. they will not be able to roll forever and their stocks could be called away. then they will be stuck with buying back the stocks at scary prices, risking a big drawdown if the market then falls. covered call writing is not that easy
Great overview! Being just a couple years away from retirement, JEPI is my largest holding. I do slightly disagree with you regarding being able to spend the distributions though. A large issue with QYLD is they sell calls ATM, so it never fully recovers after large market dips. JEPI does not have this issue, and the NAV(without reinvested distributions) is up, even after this market crash. My main concern about JEPI is "dividend growth", and if their distribution increases will be able to keep up with high inflation periods.
Forget dividend growth. Not happening. He said so in the video. What you need to do is reinvest part of them, the more worried you are about inflation the more you should reinvest. The only reason for not reinvesting is if you are absolutely sure that inflation will never happen
@@TedApelt I disagree. Yes it will not be "dividend growth", but rather distribution growth. I believe as the NAV of the fund rises, so will the distributions to some degree.
Qyld sells cover calls at the money. JEPI sells cover calls out of the money or what they call strategic calls. There is a huge difference and we should not compare the two. QYLD also has return of capital and JEPI does not. My preference is to hold very little that has return of capital in any of my accounts. That is just me. Might want to go over the difference with your audience of dividend vs return of capital.
High quality clip - well done. The only place I might suggest improving a little is the part you discussed why taking 12% month after month will not be enough to sustain the principle. Another way to illustrate differently is to first reserve the principle, and see how much of "dividends" can one afford taking out. My 2 cents.
I thought the entire point of this product is that we can take 12% (1% per month) and the holdings also track the S&P..or have i misunderstood? If taking the headline 12% per year out means my holdings go down in value ... its pointless.
I’m 70 years old and own 5000 shares of jepi. My dividends go in my settlement fund. When I withdraw money I option to pay 25 percent in taxes. My dividends range from 2800-3800 monthly. So your now telling me that’s a bad idea?
Great video. you've reminded me of what someone once said ❤ Your assets are your employees. Invest more on those performing well. Let the non-performers go
@@donaldmark3197 Haha you don't have to be surprised Mrs Lauren is really good and everyone loves genuine services,she helped me recover what I lost trying to trade on my own.
15:00 very misleading section here. You're comparing JEPI to QYLD which sells ATM calls and has virtually no upside. You can indeed spend all of the income if you want in JEPI and the share price will still climb over time barring any sustained bear market.
You sure about that? It is possible that happens, but unlikely imo. I'd gladly make an amendment to the video if proven wrong, but I think dangerous advice suggesting people can spend 8-14% annually of their portfolio.
You have helped me stay the course toward my financial goals. It is so tempting to change strategies or try and time the market. But long term investing in simply investing in the market and having a high savings rate will get me to my retirement goal. It's that simple. You helped me to see that. Thanks
Great information. You mentioned not using a taxable account. But what if I wanted the dividends paid out to me every month. Wouldn't I need a taxable account for that to work?
@Nathan Winklepleck, CFA Thank you for the quick reply. I'm about to be 47. I'm a 100% disabled veteran. I receive $4100 tax-free every month. But I would like to increase that amount and I don't want to wait till I'm 62 for social security.
Excellent video. I cannot seem to find any people who are using high dividend ETFs, such as JEPI, and using an aggressive weekly dollar cost averaging model to continuously buy new shares. This will of course compound the dividend, and then by reinvesting the dividends, compound further (of course with ebbs and flows depending on market conditions). Have you ever done an analysis on such a model? For reference, I currently do this with SPY and sell covered calls against the shares. Thank you, just subscribed and shared this with my investing circle.
One more thing. I am aware that something like SPY will appreciate much more over the long term. But my analysis is pointing to great growth once the monthly dividend cash flow REALLY starts to compound. Plus, the volatility smoothing appeals to me. Would love to hear your thoughts based on all your experience.
Hi Nathan, great video. JEPI sounds very interesting. It sounds similar to Hamilton's HYLD (on the TSX), which writes covered calls and 1.25x leverage, to attempt to get similar returns as the SP500 with around 14% yield. JEPI does seem safer because of the lower volatility, and apparently does not use leverage. What I am *very* curious about is if you are able to model at what rate JEPI needs to be reinvested to retain its value. My immediate gut says half of the yield would have to go back in, leaving someone about 5-7% useable yield if the goal is for the nominal value to not go down.
JEPI is up 11% since inception. Technically you could have spent all the yield since 2020. That being said, I reinvest what I don’t need. Retired 4/22.
Thanks for this. Honestly, this ETF is hard to understand imo. The ELNs seems like a big black box to me. Like, how do they achieve such high yields while only 20% of the assets are involved in covered calls? Especially if the covered calls aren't ATM like other CC etfs as some people suggest. And also while also having NAV appreciation. The results are amazing, so whatever the ELNs are doing it seems to be working, but I just don't understand why they perform so well. I guess it's just because the stocks they pick have low volatility relative to QQQ or even SPY.
Don't confuse dividend yields with total returns.. There's a lot of people that think "Oh it's got a 10% dividend! It must make people a lot of money!" A stock with a 10% dividend and a 2% total return is not better than a stock with a 2% dividend with a 10% total return. It's hedging those stocks, the stocks are not low volatility. Selling covered calls is a way to profit when the stocks do anything except go up. The drawback is the upside is capped, and when the stocks go down, you won't profit to cover the entire the loss in equity. This ETF isn't meant for long term investing, it's meant to have less volatility for those that need income.
I don’t get the chart at 16:20. Is he saying that you lose value due to inflation? The ETFs don’t necessarily go down per share in terms of the dollar amount. Also, if you’re only taking the dividend, you keep the number of shares. I don’t get where all that money loss comes from.
To your point of holding JEPI when you believe the market will be flat or decrease in value, I think that is the best time to hold JEPI. In addition to that observation, I would say when the market collapses or you believe the market is mostly undervalued, then sell JEPI and buy a S&P 500 index or Nasdaq 100 index fund. This way you are not timing the market. You are only having an opinion of the overall valuation of the market.
JEPI is currently my largest holding at about 5%. Very happy with the performance so far but I understand it won't always perform this well. The ELNs are nothing to fear imo. They are only 20% of the fund and split between multiple lenders.
Great video, glad I came across your channel. Your voice kind of reminds me of the channel You Suck at Cooking. Just need to wang-jangle your portfolio and add some pepperpepperpepper and you've got some tasty tendies.
Very Interesting Nathan. I probably need to listen to this once more....but does the decreased loss in down markets makes me wonder if it would be suitable to use for part of my "cash" that I hold in my IRA?
It is an interesting cash alternative, though I wouldn't think it appropriate for "needs"... I still think cash/USTs/high yield savings/iBonds via UST are ideal for that.
Is now a good time to invest in stocks? I know everyone says stocks are cheap, but how long will it take for us to recover?. The fact that others in my field make six figures each piece. Obviously, there are strategies to be used in this market, but these strategies are not available to the average person, so am better off putting my money elsewhere. I am fully aware of the expense of working more to get more money.
The top experts, however, have access to confidential information and data that is not made available to the broader public. Being knowledgeable enough to use them successfully is quite another. Big returns, not changing stochastics, are the key. Rewards and risks must be balanced. To reach your aim, pick the right size and turn your edge as often as necessary.
I concur; I've been in frequent communication with an investing advisor for more than 17 months. I definitely remember needing inspiration to keep my business running after a protracted divorce. I researched licensing consultants, sometimes known as portfolio coaches by some.
@@AnthonyHart34 I require suggestions on how to restore my portfolio and create more effective strategies in light of the huge declines. Where can I locate this instructor?
@@aaronbritzly3154 My advisor "sharon lee casey" , is a highly respected financial consultant in the industry. For further information or to connect with her, a simple online search with her name will suffice. I wish you every success in your endeavors
@@AnthonyHart34 I can see why She is so busy; her career and outstanding qualifications are Fascinating! So I immediately copied Sharon's complete name and pasted it into my browser.
Brad … there are numerous videos on that and your broker research tap will tell you ….if you cannot figure something so basic as this out ..maybe you should not be investing….jepi leans towards sp500 stocks …jepq …to nasdac stocks
I invested in jepi. It's held up pretty well in 2022, I also own Divo, i like it better than jepi. check it out, it's a covered call etf invests in high quality dividend stocks. 5 stars from Morningstar. It's performed extremely well this year.
Your comparing JEPI to QYLD. QYLD writes at the money calls on 100% of their portfolio. JEPI is using up to 20% of their portfolio to invest in ELN’s which are writing call options. They are not the same.
First time here. Thanks for the detailed video. I am a bit confused about the “don’t spend the income”portion of this video. Does that mean that I have to do dividend reinvestment to be able to get the full return? In that case, how will I live in retirement?
I love all these videos. I love stocks, and I love hearing about all these different strategies. Nathan has so many super interesting ideas. But I have a problem with wanting to try all these different strategies making my portfolio just a chaotic mess. I've become interested in international exposure, factor investing, coffee can type strategies, looking at dividend yields, shareholder yields, etc , etc, etc. I try to keep my experimentation to 10% of my overall portfolio value in order to not completely mess myself up, but it's not easy, lol.
Good video. Best one I've seen about JEPI. Do you have the same opinion of JEPQ? JEPIX may be a good indicator of long term performance for JEPI. Seems pretty flat but the high yield will probably make it worth it.
Could you elaborate more on the point that you shouldn’t spend the whole income from the yield? Why and how did it go from $1M to $200K in the example you shared? Thanks in advance
Upside Potential of QYLG By writing calls on 50% of the portfolio, the strategy allows investors to capture half the upside potential of the underlying index.
Absolutely love the videos Nathan, also love the book that you wrote and I highly recommend it to others. Quick question though, why would you invest into a tax deferred account with Jepi if most if not all of the people investing into it are looking to use the income now to pay bills etc... Sorry If I missed something but I'm genuinely curious. Thanks!
The after-tax return chart should show it all. Your returns are basically 100% taxable; that presents a massive tax headwind and reduced your returns significantly. Far better to have tax inefficient investments in an IRA and a tax efficient investment-like a VTI or VIG or SCHD-in an after-tax account. Make sense or no?
@@NathanWinklepleckCFA Yeah I understand that part I just don't understand why you'd invest into those entities in a tax deferred account when you can't utilize the dividends from it until age 59 1/2. I can see doing it when you're close to that age but not if you're young. I'm just confused on that part.
There is a comment from Blue Sky that may help here. I don't know much about JEPQ yet (haven't even looked it up). Blue Sky comment below: "Brad … there are numerous videos on that and your broker research tap will tell you ….if you cannot figure something so basic as this out ..maybe you should not be investing….jepi leans towards sp500 stocks …jepq …to nasdac stocks"
For a lot of my investing career, I got really good at picking things that were flat or went down. So much so, I eventually built my portfolio exactly around the idea that the market can’t go up, and if it does, sell Cash Secured Puts and Covered Calls. I dislike Growth stocks because timing the market is impossible, but Options pay you for time IN the market. This is why I love JEPI, it’s an ETF that does in scale what I have done since 2019. My premium buys JEPI, JEPI buys more JEPI, and everything over a certain dollar amount is for beer and luxury items like milk and eggs.
Hello Nathan Thank you for your insight about JEPI. It really helps me. However, It is unclear on section "2. Don't spend the income section." My question is about using income fund (dividend yield) for personnel use. I agree that it is not recommended to use JEPI as cheat code for retirement. In your example, $QYLD went down 76% since 2014, but when i checked the price chart of $QYLD, it went down only 35%. Let say if we would have invested $1million in QYLD on 2014 Jan, you should have at least 40k stocks at the rate of $25, it was generating 12% of yield every month, which is equivalent to ~10k per month. If we would have spend all this dividend money for personnel use, then you still would have 40k stocks in your account, which is equivalent to 640k as per current price ($16) correct? Please correct me if I'm missing something here. Thank you!
I agree with you. The "Don't spend the income" section was confusing. The example with QYLD going to 200K assumed a fixed withdrawal (10K/month) based on year 1 and increasing with inflation which is not the same as "spending the income". In the example, the person was selling shares of the ETF to fund the increasing 10K/month over time. So rather than saying "you should not expend that income", the more accurate message is that you should not have a fixed withdrawal rate based on the distribution in year 1 because the distribution may not cover such a withdrawal rate in the long term. You are ok spending the actual income (but not more that the distributions) and your balance will be based on the ETF price.
My primary concern with JEPI is whether or not the share price will decay over the long run like QYLD clearly has. It appears like JEPI will appreciate, but the ETF is still relatively new, so it's hard to discern with the available data. I don't care whether or not it outperforms the SP500, because I'm interested in JEPI for the monthly income, but want to make sure the share price will not depreciate like QYLD has. Do you believe the share price will decay like QYLD or appreciate over the long term? Thanks for the video. This is the best one I've seen regarding JEPI.
I wish I knew… :) My thinking with JEPI would be as a diversified against a sideways market. I always think in terms of total return, not monthly income. JEPI wins if you go sideways; it sells the calls and gets the premiums while not losing on share price. It loses big time in high volatility-downside volatility means you still hold the underlying, so you lose money on those stock positions depreciating. And massive upside volatility gets called away and you have to buy back in at higher prices, so JEPI also loses.
@@NathanWinklepleckCFA Yep, JEPI has done fairly well in the recent down / sideways market but sooner or later the market will turn and it might not look nearly as good once that happens. Still, if I was retired, or near retired, it might suit my income needs, but I don’t have high hopes for total return here.
@@mckessa17playing the rights offering right on CLM is far superior to JEPI. I made good double digit on CLM last year in a bear market. What else did?
@@opt4living Long term the share price of CLM has dropped like a rock with some short term gains along the way. The jury is still out for JEPI because it's new but so far it's a much more stable stock.
Another great video that is very informative, transparent and honest! I will however not be adding this to my portfolio as nothing comes close to the long-term income potential of blue chip dividend growth stocks!!!
You’ll need a lot more money invested if you’re planning on living off dividend income. I see a couple of these other UA-cam gurus with 7 figure portfolios earning under $100K a year. I think a mix of both is best. Just my 2 cents.
have you considered these ETFs may pay significantly less if the market falls hard then consolidates for years? options premiums could contract severely as volatility contracts during a prolonged multi-year sideways consolidation. but you won't be able to get out of the ETFs because they will have fallen so much doing so would incur a significant loss. there is not always a 'V' bottom. we might be in for years of nothingness
"dumb cat" not so dumb... :) This is a great warning to call covered call ETF investors; absolutely this would be the worst-case scenario. Implied volatility is essential to understanding the amount of income generated. In this case, the fund does own 80% of the underlying securities, so that provides some comfort. And those stocks tend to be lower volatility, so I think risks here are less substantial than most in the space.
@@NathanWinklepleckCFA, nothing in particular. Just bearish and would rather preserve capital right now. I think we have yet to see a full capitulation of the broader equities markets. We've never had sustained inflation over 5% that didn't require a true recession to correct it, and the equities markets typically lag the inflation correction in their recovery. In the meantime, I'm selling cash-secured puts to collect premium whenever volatility spikes, but VIX volatility has been largely absent the past few weeks.
Hi there, confused about point #2 - I am assuming you should DRIP the distributions however eventually everyone will need to spend the value. Are you implying that the capital will depreciate over time ? Sorry I am not clear on this point.
No. Anything that generates income will also generate taxes. There is no way around it other than to defer your taxes by allowing those dividends to compound within the company (i.e.: buy lower-yielding dividend paying ETF like S&P 500.)
Thanks for the video. What if someone was to retire and move their1.25mill dollar 401k into an IRA. put 25% each into SCHD,DGRO,JEPI,JEPQ. Then just live off the dividends and not sell any of the base investment. Thinking this would create ~6K/month. Is there a downside to this other than the dividend could change or stop.
Retired 2 years ago with 50 VOO, 25 JEPI, 25 JEPQ. I have not sold any shares. I have added shares. Principal took a hit last year but is rebounding this year. Paying all expenses and reinvesting the rest. Variable dividends can be a pain though.
Nathan, amazing video. Your thoughts on the completely changed underlying portfolio, including Adobe, Microsoft, and Amazon at the top, and the significantly decreased dividend (Currently 36 cents vs 60 cents only eight months ago, with SEC yield down to 7.7%)?
Superb break down . Jp Morgan has another ETF JPEQ . Instead of putting portion of money into JEPI is it a good idea to split and allocate into JEPI and JEPQ?
I like the video but am confused about your qyld example where you say it has declined 75% since inception, isn't it only down around 33%? how do you get your number? my chart shows $25 in 2014 and now sitting at around $17.
Can you recommend international dividend funds for high dividend that are not pegged to dollars in case of dollar collapse? Pretty close to retirement.
Hey Nathan, I've been following your channel is 2020! Always love your explanations and insight. I have question unrelated; what program are you using to make the presentations? Thank you.
JEPI is great for the dividend alone. I have discovered selling covered calls on JEPI itself can amplify the already high dividend. In addition, for a small premium I protect against a large downside by purchasing out of the money puts. Thanks for the video, keep up your excellent work!
JPM has recommended to not use the SEC yield for comparison, but instead a lower average. The formula for SEC yield tends to over-estimate JEPI yields.
![#1 Dividend ETF [1989-2024]](/img/n.gif)
With the way the market is moving, we'll mostly hold for longer than 2025 to realize profit gain, I think a video on "How to profit from the present market" will be more effective, I mean I've heard of people making up to 250K within few months and I'd like to know how.
It’s precisely at times like these that investors need to be on guard against the next certainty. You don’t have to act on every forecast, hence i will suggest you get yourself a financial-advisor that can provide you with entry and exit points on the shares/ETF you focus on.
The 1% Millionaires stay rich by staying off high interest debts and investing passively. Personally i made my first million from having investments that spreads across stocks, etfs, coins and bonds.What i can say to early investors is diversification and solid management..at this point I'm actually grateful for my advisor Colleen Janie Towe. it's been great.
@@LionTowercoporation Please can you leave the info of your investment advisor here? I’m in dire need for one.
Do your due diligence and opt for one that has tactics to help your portfolio continue consistent and steady growth. "Colleen Janie Towe" is accountable for the success of my portfolio, and I believe she has the qualifications and expertise to accomplish your objectives.
Thanks for your guidance . I will search on her site online and do my due diligence. If She seem proficient. I write her an email and scheduled a phone call.
I've watched sooo many videos trying to understand JEPI the best way I can and I can say this is the best one I watched. So clearly explained. Thank you
Glad it helped!
A lot of folks have been going on about a January rally and said mutual funds [ETF] stocks that would be experiencing significant growth these festive season, any idea which stocks/mutual funds this may be?
@@tatianastarcic True, we’re only just an information away from amassing wealth, I know a lot of folks that made fortunes from the Dotcom crash as well as the 08’ crash and I’ve been looking into similar opportunities in this present market, could this coach that guides yo help?
@@tatianastarcic thank you so much for this tip! Finding your coach was a breeze and I was really impressed with all the research I did on her credentials before scheduling a call. It's clear from her résumé that she's extremely knowledgeable and skilled, and I'm so excited to have the chance to talk to her!
I hold 4000 shares of JEPI in a retirement account. The monthly dividend has served to subsidize a huge portion of my RMDs. I am strengthening my position in Jepq to prepare for when Tech stocks rise again. You were adamant about not spending the income however I have not sold off any shares and done just fine spending the income
I was with you until near the ending when you compared it against qyld. Qyld writes at the money covered calls on 100% of the portfolio, so they will constantly erode. Jepi writes out of the money covered calls on a PORTION of the portfolio. Big difference.
Exactly. Completely unfair comparison. Apples and oranges. He picks the worst ETF and compared JEPI with it. JEPI has a completely different investment strategy.
One of the best videos I have seen on covered ETFs. As you say other content producers suggest you can take the 12-15% yield on QYLD and retire on $250,000. You covered the technicalities as clearly as possible in a short video.
He makes a completely ridiculous comparison of JEPI with QYLD (the worst). Pretty dumb.
1. JEPI sells out-of-the-money calls. This means that ALL the gains are not given away. 2. The ELNs are based on the S&P 500 index. Thus, JEPI does not ever lose holdings when the covered call goes against it. JEPI is 15% of my portfolio; I'm retired (early) and live off dividends.
What else is in your portfolio? Also congrats on the early retirement!
How often you withdraw dividens?
Agree, the video maker is wrong about comparing JEPI to QYLD, they are different animals.
@skipkapur1, if you are withdrawing dividends, does that mean that withdrawal is hurting you like the video says?
if you sell covered calls so far out of the money that your stock never gets called away, your returns will be so low us treasuries would be a better investment. which means jepi is not selling calls that far out of the money and they will get hit from time to time. they will either have their stock called away, or they will have to roll the options which is expensive
Time in the market is better than timing the markets. One of my favorite quote from Ken Fisher. This has been one of the reason people don't make it in financial markets, cos they don't understand time. You get in on time, you would make profits other than buying the hype and later losing out.
I agree with you but this requires technical know how, consistency and experiences.
@@danalves47 You're correct, reason why I work with a financial advisor. Risk management, early entry and exits points, access to own stocks which is isn't available to the general public, these are few of many advantages. My life has changed and my approach to financial market better with lot of profits.
@@matteoantonio4644 Do you mind sharing info about your advisor, I'm new to financial markets and would need guidance.
@@borilam293 Sheila Maureen Oneill is my financial advisor, I met her during a conference in new york, she's one of the best out there. She would do well to guide you.
Just look up her full name online and read about her on her page.
Great coverage. SCHD is by far my favorite. JEPI close second. Can’t wait to see how JEPQ performs after this bear market relents.
Interesting so many people talking about JEPQ. I've never even heard of it until today!
@@NathanWinklepleckCFA can you please review it like you just did Jepi, I'm sure everyone would appreciate it. Thank you
Thanks!
Wow, thanks so much!
Hi Nathan! I was was one of your subscribers requesting this video so thanks! A couple of points, first my understanding is that JEPI is the ETF version of an older mutual fund called JEPIX that goes back to 2018 so you have some more performance data to consider. Second, I am not sure QYLD is a fair comparison with JEPI since it is not known where JEPI writes it’s covered calls. Confirming where JEPI writes its calls would go a long way to adding confidence in its performance. I have a mix of JEPI and SCHD in my dividend income portfolio and have been very happy compared to the overall market.
There was a recent interview, about 2-3 months back, where the fund manager said they are slightly out of the money. i think that is a good thing, in terms of being able to maintain the NAV.
I would add QYLD writes its calls systematically monthly on its (I believe) entire portfolio. Blindly writing calls on an entire portfolio can lead to turnover and value loss. JEPI and JEPQ writes its calls a significantly smaller ratio. Being actively managed allows for strategic calls and hopefully less turnover in stocks.
They write calls that are 2-5% OTM based on volatility. Per interview with Hamilton Reiner.
I have watched a lot of videos on JEPI this is the best ever explanation on it! Can you please do a similar one on JEPQ?
There are a lot of strategies to make a tongue-wetting profit that the average Joe don't know. Personally, the financial market for me seems the only way forward with my long time horizon (accrued roughly $457k in gains since Mid 2021 ) but if you don’t have that fortune of time it’s a tough market out there almost nowhere feels safe!
If you’ve got patience I believe it’s a great time to invest… I’m no expert but as Warren buffet said he’s seen this happen a number of times throughout his life
I've known I had wanted to start investing for a few months but just haven't been brave enough to start due to the market so far this year. I have $60k I want to transfer into an S&S ISA but it's hard to bite the bullet and do it. $457 is a huge milestone, Please what's your strategy? I will love to have an insight
I began with a fiduciary portfolio advisor by the name *MARTHA ALONSO HARA* . She’s verifiable and her works ethics is in accordance with the US investment act of 1940. Her approach is transparent allowing total ownership and control over my portfolio with fees very reasonable in comparison with my investment income. Also, She covers things like investment insurance, ensuring retirement is well funded, and discussing tax advantages and ways to have a volatility buffer for investment risk. many things like that.
Word of the day: fiduciary. do not talk to anyone who is not a fiduciary to you, who explains everything.
*MARTHA ALONSO HARA* really seems to know her stuff. I looked her up on the web using her full name and found her page, read through her resume, educational background, and qualifications and it was really impressive. She is a fiduciary who will act in my best interest. So, I'll book a session with her
Great analysis. Would have loved to see a comparison to SCHD instead of VIG. SCHD is only down -0.44% YTD vs -1.57% for JEPI. There’s no thesis or data supporting holding JEPI over SCHD for the equivalent amount of “income” being distributed. No capped upside for SCHD and a foundation of dividend growth. No debt instruments involved. 600% less in management fees. Add in the favorable tax treatment of its dividends and it really isn’t close.
My preference would also be for SCHD between that and JEPI. But I do think JEPI provides some interesting diversification for someone who would like to diversify against a bear market or a sideways market.
@@NathanWinklepleckCFA it definitely isn’t a bad fund for those purposes and the lower volatility and high income could provide more “sleep well at night” feelings when most investors are feeling max pain. A comfortably-held JEPI is certainly much better than a panic-sold SPY in a bear market. The data shows most retail investors don’t behave in such a way to see the true long term returns of the market. Maybe funds like JEPI could help improve those numbers.
Great video.
I have a friend high up within JPM that recommended JEPI, back in 2020, specifically for my roth IRA to avoid the taxes and to keep the cash flow coming in. I can confirm that for a downward/choppy market, JEPI is solid pick. However, for a rising market JEPI is also a solid backup/reinforcement for whatever you're using as your value/growth fund. My friend recommended sitting on cash and use the JEPI dividends to re-investment more into in a sp500 fund, such as VOO or SPY, when the market finally pivots and begins going back up. JEPI itself is ok, but using it with what outpreforms or keeps up with the markets is the key. For example, 2020 and 2021, VGT with JEPI, massive technology growth with JEPI = big win, last year, as the market corrected, I swapped VGT for XLE. XLE along with JEPI in my roth, this combination of growth and reinvesting monthly dividends along with a monthly contribution crushed the market, XLE was up over 50% while jepi fell about 14%, however jepi made up the 14% from the dividends.
The key is to have JEPI with a solid fund that beats/keeps up with the market. IMO, 2023 any sp500 after q1 along with jepi. Maybe with more risk go back to VGT/QQQ.
Good luck to everyone!
Your strategy is non-sensical. If you’re putting all the dividends into a different fund, then logically you should liquidate your JEPI holdings and put the cash into those funds as well.
@@IndexInvestingWithCole
No, I shouldn't. There is no way I can know exactly what will do well in the future, nor will I ever put all my funds into a single stock/etf/fund. The cashflow accumulated along with my contributions over the long term will be better down the road than now. I prefer a solid foundation of cashflow along with growth. In order to do that, I'm gonna have to sacrifice some growth short-term.
In the past 3 years, I've made a little over 5k in JEPI dividends alone, so at current pace, ever 4-4.5 years, I'm able to squeeze an extra year of cash into my Roth, and choose where to invest depending on current data. So unless i know exactly where to move my funds, then sure ill take more risk and buy more. However, what if I'm wrong and what I invest in doesn't preform well? Thats why its good to extra cash ready on the side to adjust and minimizes losses. So my preference is establishing a solid cash flow base short-term, so more can be invested longterm. On top of that, i wont see this money for at least another 20 years.
Im purposefully setting up my roth for more cash flow than growth. Whereas my 401 and other investment accounts are for growth, so I take more risk in the small and mid caps.
That post was 6 months ago, and with the data I had, it looked like it would be a good idea to use the extra cash for certain domestics etf. Example, the tech sector is killing it, so vgt, qqq, and close others are killing it. However, with the current data, international funds are beating the the sp500, with the exception of blue chip funds, I believe if you follow any Russell 1000 value/growth funds they should be up 45-50%, right along the nasdaq example fbgrx and say vgt. But I'm expecting a pullback when Powell speaks next week. So again that extra cash flow is going allow me to buy more over the long term.
I wouldn't liquidate jepi because having the extra 1.5-2k annually in cash flow in a Roth is amazing and it continues to go up as i maintain the balance i have for jepi and other etfs in my portfolio. Especially the tax free part. Jepi is about 90% options, so all taxed at ordinary, while 10% are qualified.
In 20 years? What in the world are you doing? and why are you investing into an income fund? JEPI is not a growth fund. In 20 years you'll kick yourself when you realize what you are doing. JEPI will never outperform the stocks in holds in the long term.
@@J-D248 I don't invest in jepi for growth, I never said that. I use it for generating cash flow. I use that cash along with my contributions and invest in other funds that do grow significantly more. I'm willing to cut bit of growth so I can increase the cash flow into my Roth in order to invest more into other funds to accelerate growth down the road. Examples, a few years back, 2021, VGT gave me 26% returns and JEPI was also up 6%. I made an extra 1.6k in dividends to reinvest. In terms of raw value I was 'down' a few thousand had I went completely in vgt which was ~2% difference. 2022, I liquidated vgt and swapped it for xle and bought more jepi. I was able to put 6k of contributions and the extra 1.6k from dividends into xle as the year when on. My returns were over 50%, while anyone who followed any sp500 fund was down over 20%. I ended the year with over 1.9k dividends, i was 'down' a few hundred when i compared to going fully into vgt and then into xle from 2021-2022. 2023, in January, I sold all my xle and went back into tech and bought vgt again. The margin of how much I miss from going all in on growth with no cash flow is slowly eroding away.
So think about, if I'm putting the max 6500 this year and an few extra thousand from from dividends now vs someone who is putting all 6500 into growth, with no or very little extra cash flow, what happens? In the short term, most people will have better returns, however what will happen as I'm able to invest more because of the increased cash flow over time? I'll out-pace those same people way further down the road.
I'm trying to optimize growth and cash flow. Going strictly 100% growth means very little cash flow, the other extreme is way worse, there's no growth lol. So I'm finding that sweet spot.
I won't be kicking myself at all. My roth isn't my only investing account. I have a purpose for my roth and I've stuck to it for a long time, and I'm very pleased.
I don't like holding stocks in my Roth. I buy stocks in my brokerage account, so I can have access to the gains without being penalized and i can access the money now. So example, stocks I bought in 2020 post covid were like MOS, CF. then I sold them in 2022 and bought First solar because of what I was hearing about the inflation reduction act and the amount of money that was going to flow into solar, hydrogen, ev stocks. That type of more of active trading/investing that I enjoy in my brokerage account, not a retirement account.
Great analysis. Jepi is great for income and I think occasionally you have to re-invest the dividends and not continuously spend the money as you said. My mom has been in it for over a year and loves the income.
but that mean you lose your principal? I thought JEPI was principal + Dividends
That was a great over view Nathan. You confirmed much of my own research with some different sources which is a confidence builder of course. For me personally, I am utilizing JEPI as a bond alternative. I was very impressed in how it performed, especially in this recent bear market in bonds, versus even the treasuries. My feeling is that it is also a great boost to utilize for building an income stream to enhance your rate of reinvest into lower dividend yielding vehicles that I intend to buy and hold, such as Apple and Microsoft. I see it as kind of “front-loading” my income to offset the lower dividends I receive in positions such as Apple, Microsoft and UNH. Throw in DIVO (another covered call ETF I would love to see you review btw) and SCHD and you have the foundation for a strong Dividend base around which you could build a few individual stocks when great value opportunities allow to build up your DGR and Yield. Thanks again sir!
😎
I am thinking exactly about this: using JEPI's income to reinvest into more growth type stocks.
Good selections.
Very good job young man. Subscribed!
Excellent breakdown. I wasn’t sure if I wanted to sink some money into JEPI before I watched this video. I’m still not 100% certain this is an investment for me, but you have helped allay some of my uncertainty.
One thing I don't like about SCHD (one of my favorite core ETF's) is that if you're holding a large position and you want to sell covered calls against it in a sideways or even bear market, the options premiums are pretty much garbage, even ATM, meaning that you assume a much higher risk of your underlying being called away in an unexpected market upswing, while not collecting enough premium to justify that risk.
JEPI seems like it would be a great holding to pair with a core fund like SCHD, since it does the call writing for you, with much higher premiums collected, minimal risk, and a very attractive expense ratio when considering what you're getting for the money.
Exactly I like to take the dividends from JEPI and reinvest some back into Jepi and some into s c h d along with a little growth. Like SCH X. I feel like that's a well-rounded approach with jepi and has been working for me this year.
@@leecarignan7714 that seems like a very sound strategy.
Hi guys, would you know how I can get schd and JEPI in UK? My understanding is these are us only etf.. Any other alternatives in case?
@@leecarignan7714 Doing the same however, I'm investing in SCHD and DGRO.
even if you are selling covered calls on a volatile stock like tsla if you don't want your stock to get called away you will have to sell so far otm you might be better off just buying us treasuries. jepi risks their stocks being called away or rolling. obviously they are rolling which can get expensive. if the market blasts higher jepi could be hurt. they will not be able to roll forever and their stocks could be called away. then they will be stuck with buying back the stocks at scary prices, risking a big drawdown if the market then falls. covered call writing is not that easy
Great overview! Being just a couple years away from retirement, JEPI is my largest holding. I do slightly disagree with you regarding being able to spend the distributions though. A large issue with QYLD is they sell calls ATM, so it never fully recovers after large market dips. JEPI does not have this issue, and the NAV(without reinvested distributions) is up, even after this market crash. My main concern about JEPI is "dividend growth", and if their distribution increases will be able to keep up with high inflation periods.
Great points Mike, my thoughts were here also.
My exact thoughts. If I'm not mistaken, I thought JEPI only sells calls on a portion of the holdings vs QYLD selling calls on 100% and ATM
@@chrisk1569 JEPI sells calls on up to 20% of holdings as opposed to QYLD 100% ATM. These Global X funds are bad investments IMO
Forget dividend growth. Not happening. He said so in the video. What you need to do is reinvest part of them, the more worried you are about inflation the more you should reinvest. The only reason for not reinvesting is if you are absolutely sure that inflation will never happen
@@TedApelt I disagree. Yes it will not be "dividend growth", but rather distribution growth. I believe as the NAV of the fund rises, so will the distributions to some degree.
I already own this, but this overview is so appreciated. Thank you!
Great summary. Easier to understand that reading the prospectus.
I'd love to see a video on BST!
Me too ..using jepi with schd and bst …..cannot think of anything better …growth and high income and bst is long term gains.
Qyld sells cover calls at the money. JEPI sells cover calls out of the money or what they call strategic calls. There is a huge difference and we should not compare the two. QYLD also has return of capital and JEPI does not. My preference is to hold very little that has return of capital in any of my accounts. That is just me. Might want to go over the difference with your audience of dividend vs return of capital.
I have JEPI, good income holding.
High quality clip - well done. The only place I might suggest improving a little is the part you discussed why taking 12% month after month will not be enough to sustain the principle. Another way to illustrate differently is to first reserve the principle, and see how much of "dividends" can one afford taking out. My 2 cents.
I thought the entire point of this product is that we can take 12% (1% per month) and the holdings also track the S&P..or have i misunderstood? If taking the headline 12% per year out means my holdings go down in value ... its pointless.
I’m 70 years old and own 5000 shares of jepi. My dividends go in my settlement fund. When I withdraw money I option to pay 25 percent in taxes. My dividends range from 2800-3800 monthly. So your now telling me that’s a bad idea?
You are fine imo. I have 4953 JEPI. I live off the dividends and reinvest the excess.
Great video. you've reminded me of what someone once said ❤ Your assets are your employees. Invest more on those performing well. Let the non-performers go
People prefer to spend money on liabilities,Rather than investing in assets and be very profitable.
You're so correct! Save, invest and spend for necessities and a few luxuries relatives to on's total assets ratio.
This must be an investment with Mrs Lauren James
@@samanthastephen2215 I'm just shocked you mentioned Expert Lauren James thought am the only one trading with her
@@donaldmark3197 Haha you don't have to be surprised Mrs Lauren is really good and everyone loves genuine services,she helped me recover what I lost trying to trade on my own.
15:00 very misleading section here. You're comparing JEPI to QYLD which sells ATM calls and has virtually no upside. You can indeed spend all of the income if you want in JEPI and the share price will still climb over time barring any sustained bear market.
You sure about that? It is possible that happens, but unlikely imo. I'd gladly make an amendment to the video if proven wrong, but I think dangerous advice suggesting people can spend 8-14% annually of their portfolio.
@@NathanWinklepleckCFA He's saying the income you can spend, not the principal.
Thank you for the great content. Would you consider doing a video on DIVO? Thank you.
Fantastic overview. Thanks a lot
Thanks, Roman!
Great video I actually learned something thanks for the info
You have helped me stay the course toward my financial goals. It is so tempting to change strategies or try and time the market. But long term investing in simply investing in the market and having a high savings rate will get me to my retirement goal. It's that simple. You helped me to see that. Thanks
Wow .. Great job in this evaluation .. you sir just earned and new sub! .. Thank you!
Nice explanation of pros/cons. Well done
Very informative. Can you please review JEPQ?
Great and detailed Analysis 👍
So, if I want to just buy and hold, and dont care about the price moves, and am happy with a 10%+ return, this is for me?
Excellent video and analysis. I think I’ll stick with VTI. Can’t beat the market.
Excellent video🥇🥇 I have a few shares of JEPI, but didn’t understand it until now.
I’m glad it was helpful, Robert!
Excellent, extremely lucid and helpful commentary.
Glad it was helpful!
Great information. You mentioned not using a taxable account. But what if I wanted the dividends paid out to me every month. Wouldn't I need a taxable account for that to work?
Are you over 59 1/2?
@Nathan Winklepleck, CFA Thank you for the quick reply. I'm about to be 47. I'm a 100% disabled veteran. I receive $4100 tax-free every month. But I would like to increase that amount and I don't want to wait till I'm 62 for social security.
Excellent video. I cannot seem to find any people who are using high dividend ETFs, such as JEPI, and using an aggressive weekly dollar cost averaging model to continuously buy new shares. This will of course compound the dividend, and then by reinvesting the dividends, compound further (of course with ebbs and flows depending on market conditions). Have you ever done an analysis on such a model? For reference, I currently do this with SPY and sell covered calls against the shares. Thank you, just subscribed and shared this with my investing circle.
One more thing. I am aware that something like SPY will appreciate much more over the long term. But my analysis is pointing to great growth once the monthly dividend cash flow REALLY starts to compound. Plus, the volatility smoothing appeals to me. Would love to hear your thoughts based on all your experience.
Hi Nathan, great video. JEPI sounds very interesting. It sounds similar to Hamilton's HYLD (on the TSX), which writes covered calls and 1.25x leverage, to attempt to get similar returns as the SP500 with around 14% yield. JEPI does seem safer because of the lower volatility, and apparently does not use leverage. What I am *very* curious about is if you are able to model at what rate JEPI needs to be reinvested to retain its value. My immediate gut says half of the yield would have to go back in, leaving someone about 5-7% useable yield if the goal is for the nominal value to not go down.
JEPI is up 11% since inception. Technically you could have spent all the yield since 2020. That being said, I reinvest what I don’t need. Retired 4/22.
Thanks for this. Honestly, this ETF is hard to understand imo. The ELNs seems like a big black box to me. Like, how do they achieve such high yields while only 20% of the assets are involved in covered calls? Especially if the covered calls aren't ATM like other CC etfs as some people suggest. And also while also having NAV appreciation. The results are amazing, so whatever the ELNs are doing it seems to be working, but I just don't understand why they perform so well. I guess it's just because the stocks they pick have low volatility relative to QQQ or even SPY.
Don't confuse dividend yields with total returns.. There's a lot of people that think "Oh it's got a 10% dividend! It must make people a lot of money!" A stock with a 10% dividend and a 2% total return is not better than a stock with a 2% dividend with a 10% total return. It's hedging those stocks, the stocks are not low volatility. Selling covered calls is a way to profit when the stocks do anything except go up. The drawback is the upside is capped, and when the stocks go down, you won't profit to cover the entire the loss in equity. This ETF isn't meant for long term investing, it's meant to have less volatility for those that need income.
Great video! Would you consider making a video on a similar ETF; DIVO (Amplify CWP Enhanced Dividend Income)? Thank you!
I don’t get the chart at 16:20. Is he saying that you lose value due to inflation? The ETFs don’t necessarily go down per share in terms of the dollar amount. Also, if you’re only taking the dividend, you keep the number of shares. I don’t get where all that money loss comes from.
To your point of holding JEPI when you believe the market will be flat or decrease in value, I think that is the best time to hold JEPI. In addition to that observation, I would say when the market collapses or you believe the market is mostly undervalued, then sell JEPI and buy a S&P 500 index or Nasdaq 100 index fund. This way you are not timing the market. You are only having an opinion of the overall valuation of the market.
Just came across this video and I do find it informative. Would you be doing a comparison video with JEPQ?
JEPI is currently my largest holding at about 5%. Very happy with the performance so far but I understand it won't always perform this well. The ELNs are nothing to fear imo. They are only 20% of the fund and split between multiple lenders.
Great video, I sent this to my parents after I tried to explain it to them
Great video, glad I came across your channel. Your voice kind of reminds me of the channel You Suck at Cooking. Just need to wang-jangle your portfolio and add some pepperpepperpepper and you've got some tasty tendies.
Very Interesting Nathan. I probably need to listen to this once more....but does the decreased loss in down markets makes me wonder if it would be suitable to use for part of my "cash" that I hold in my IRA?
It is an interesting cash alternative, though I wouldn't think it appropriate for "needs"... I still think cash/USTs/high yield savings/iBonds via UST are ideal for that.
New to your channel. My main man Mr. Mannarino is always pushing this ETF.
Is now a good time to invest in stocks? I know everyone says stocks are cheap, but how long will it take for us to recover?. The fact that others in my field make six figures each piece. Obviously, there are strategies to be used in this market, but these strategies are not available to the average person, so am better off putting my money elsewhere. I am fully aware of the expense of working more to get more money.
The top experts, however, have access to confidential information and data that is not made available to the broader public. Being knowledgeable enough to use them successfully is quite another. Big returns, not changing stochastics, are the key. Rewards and risks must be balanced. To reach your aim, pick the right size and turn your edge as often as necessary.
I concur; I've been in frequent communication with an investing advisor for more than 17 months. I definitely remember needing inspiration to keep my business running after a protracted divorce. I researched licensing consultants, sometimes known as portfolio coaches by some.
@@AnthonyHart34 I require suggestions on how to restore my portfolio and create more effective strategies in light of the huge declines. Where can I locate this instructor?
@@aaronbritzly3154 My advisor "sharon lee casey" , is a highly respected financial consultant in the industry. For further information or to connect with her, a simple online search with her name will suffice. I wish you every success in your endeavors
@@AnthonyHart34 I can see why She is so busy; her career and outstanding qualifications are Fascinating! So I immediately copied Sharon's complete name and pasted it into my browser.
Great video Nathan!
Thank you!
Great video. Thank you. What is the difference in JEPI & JEPQ?
Brad … there are numerous videos on that and your broker research tap will tell you ….if you cannot figure something so basic as this out ..maybe you should not be investing….jepi leans towards sp500 stocks …jepq …to nasdac stocks
Love this format of the 18 key points to know. Thanks!
Glad you liked it; thanks for the comment!
I invested in jepi. It's held up pretty well in 2022, I also own Divo, i like it better than jepi. check it out, it's a covered call etf invests in high quality dividend stocks. 5 stars from Morningstar. It's performed extremely well this year.
Your comparing JEPI to QYLD. QYLD writes at the money calls on 100% of their portfolio. JEPI is using up to 20% of their portfolio to invest in ELN’s which are writing call options. They are not the same.
First time here. Thanks for the detailed video. I am a bit confused about the “don’t spend the income”portion of this video. Does that mean that I have to do dividend reinvestment to be able to get the full return? In that case, how will I live in retirement?
Watch it again, he said,
'Don't steadily withdraw 12%'
He didn't say don't take the returns.
I'd be curious to hear your thoughts on DIVO.
This is a video I was waiting for. Thanks for the information.
My pleasure!
I love all these videos. I love stocks, and I love hearing about all these different strategies. Nathan has so many super interesting ideas.
But I have a problem with wanting to try all these different strategies making my portfolio just a chaotic mess.
I've become interested in international exposure, factor investing, coffee can type strategies, looking at dividend yields, shareholder yields, etc , etc, etc. I try to keep my experimentation to 10% of my overall portfolio value in order to not completely mess myself up, but it's not easy, lol.
LOL you should see my portfolio 😆
Very happy with video, explains alot
Glad to hear that!
I have been dollar cost avging into jepi and am well over the performance of the s&p.
Good video. Best one I've seen about JEPI. Do you have the same opinion of JEPQ?
JEPIX may be a good indicator of long term performance for JEPI. Seems pretty flat but the high yield will probably make it worth it.
excellent analysis! thanks
Could you do this same type of report on JEPQ Great job!
Could you elaborate more on the point that you shouldn’t spend the whole income from the yield? Why and how did it go from $1M to $200K in the example you shared? Thanks in advance
Upside Potential of QYLG
By writing calls on 50% of the portfolio, the strategy allows investors to capture half the upside potential of the underlying index.
So, if it's a bad idea to spend all the JEPI income, how do I know how much I can safely spend without drawing down the principal investment?
Absolutely love the videos Nathan, also love the book that you wrote and I highly recommend it to others. Quick question though, why would you invest into a tax deferred account with Jepi if most if not all of the people investing into it are looking to use the income now to pay bills etc... Sorry If I missed something but I'm genuinely curious. Thanks!
The after-tax return chart should show it all. Your returns are basically 100% taxable; that presents a massive tax headwind and reduced your returns significantly. Far better to have tax inefficient investments in an IRA and a tax efficient investment-like a VTI or VIG or SCHD-in an after-tax account. Make sense or no?
@@NathanWinklepleckCFA Yeah I understand that part I just don't understand why you'd invest into those entities in a tax deferred account when you can't utilize the dividends from it until age 59 1/2. I can see doing it when you're close to that age but not if you're young. I'm just confused on that part.
Nice an very informative Video. Whats your Opinion on JEPQ?
There is a comment from Blue Sky that may help here. I don't know much about JEPQ yet (haven't even looked it up). Blue Sky comment below: "Brad … there are numerous videos on that and your broker research tap will tell you ….if you cannot figure something so basic as this out ..maybe you should not be investing….jepi leans towards sp500 stocks …jepq …to nasdac stocks"
For a lot of my investing career, I got really good at picking things that were flat or went down. So much so, I eventually built my portfolio exactly around the idea that the market can’t go up, and if it does, sell Cash Secured Puts and Covered Calls. I dislike Growth stocks because timing the market is impossible, but Options pay you for time IN the market. This is why I love JEPI, it’s an ETF that does in scale what I have done since 2019. My premium buys JEPI, JEPI buys more JEPI, and everything over a certain dollar amount is for beer and luxury items like milk and eggs.
I love the luxury items like milk and eggs. 😂
Maybe something about SBSW? Actual dividend yield is 8,8%. P/E around 5,8
I don’t understand why quod is a bad investment? Has it been paying out the dividend as promised? That’s the point of such etfs. No?
Hello Nathan
Thank you for your insight about JEPI. It really helps me.
However, It is unclear on section "2. Don't spend the income section."
My question is about using income fund (dividend yield) for personnel use. I agree that it is not recommended to use JEPI as cheat code for retirement.
In your example, $QYLD went down 76% since 2014, but when i checked the price chart of $QYLD, it went down only 35%. Let say if we would have invested $1million
in QYLD on 2014 Jan, you should have at least 40k stocks at the rate of $25, it was generating 12% of yield every month, which is equivalent to ~10k per month.
If we would have spend all this dividend money for personnel use, then you still would have 40k stocks in your account, which is equivalent to 640k as per current price ($16) correct? Please correct me if I'm missing something here. Thank you!
I agree with you. The "Don't spend the income" section was confusing. The example with QYLD going to 200K assumed a fixed withdrawal (10K/month) based on year 1 and increasing with inflation which is not the same as "spending the income". In the example, the person was selling shares of the ETF to fund the increasing 10K/month over time. So rather than saying "you should not expend that income", the more accurate message is that you should not have a fixed withdrawal rate based on the distribution in year 1 because the distribution may not cover such a withdrawal rate in the long term. You are ok spending the actual income (but not more that the distributions) and your balance will be based on the ETF price.
@@nestorlld Thank you
🎉 I have the same question
My primary concern with JEPI is whether or not the share price will decay over the long run like QYLD clearly has. It appears like JEPI will appreciate, but the ETF is still relatively new, so it's hard to discern with the available data. I don't care whether or not it outperforms the SP500, because I'm interested in JEPI for the monthly income, but want to make sure the share price will not depreciate like QYLD has. Do you believe the share price will decay like QYLD or appreciate over the long term? Thanks for the video. This is the best one I've seen regarding JEPI.
I wish I knew… :) My thinking with JEPI would be as a diversified against a sideways market. I always think in terms of total return, not monthly income. JEPI wins if you go sideways; it sells the calls and gets the premiums while not losing on share price. It loses big time in high volatility-downside volatility means you still hold the underlying, so you lose money on those stock positions depreciating. And massive upside volatility gets called away and you have to buy back in at higher prices, so JEPI also loses.
@@NathanWinklepleckCFA Yep, JEPI has done fairly well in the recent down / sideways market but sooner or later the market will turn and it might not look nearly as good once that happens. Still, if I was retired, or near retired, it might suit my income needs, but I don’t have high hopes for total return here.
@@NathanWinklepleckCFA I would rather invest in JEPI over ARR or CLM which pay a great dividend but drop like a rock.
@@mckessa17playing the rights offering right on CLM is far superior to JEPI. I made good double digit on CLM last year in a bear market. What else did?
@@opt4living Long term the share price of CLM has dropped like a rock with some short term gains along the way. The jury is still out for JEPI because it's new but so far it's a much more stable stock.
Another great video that is very informative, transparent and honest! I will however not be adding this to my portfolio as nothing comes close to the long-term income potential of blue chip dividend growth stocks!!!
You need to extend your look back in history further than 20 years.
You’ll need a lot more money invested if you’re planning on living off dividend income. I see a couple of these other UA-cam gurus with 7 figure portfolios earning under $100K a year. I think a mix of both is best. Just my 2 cents.
Awesome, thorough video. Best I've seen on JEPI
Glad you liked it!
have you considered these ETFs may pay significantly less if the market falls hard then consolidates for years? options premiums could contract severely as volatility contracts during a prolonged multi-year sideways consolidation. but you won't be able to get out of the ETFs because they will have fallen so much doing so would incur a significant loss. there is not always a 'V' bottom. we might be in for years of nothingness
"dumb cat" not so dumb... :) This is a great warning to call covered call ETF investors; absolutely this would be the worst-case scenario. Implied volatility is essential to understanding the amount of income generated. In this case, the fund does own 80% of the underlying securities, so that provides some comfort. And those stocks tend to be lower volatility, so I think risks here are less substantial than most in the space.
Very helpful, thank you!
Glad it was helpful!
3:00 what if jp morgan goes under? will the etf default ?
Good question; I don’t think so. It’s a trust so there is a right to ownership that JPM doesn’t have.
@@NathanWinklepleckCFA hmm ok thanks
I'm considering using it as a short-term cash holding vehicle. Thank you for this video.
Are you saving for anything, in particular w/ cash?
@@NathanWinklepleckCFA, nothing in particular. Just bearish and would rather preserve capital right now. I think we have yet to see a full capitulation of the broader equities markets. We've never had sustained inflation over 5% that didn't require a true recession to correct it, and the equities markets typically lag the inflation correction in their recovery.
In the meantime, I'm selling cash-secured puts to collect premium whenever volatility spikes, but VIX volatility has been largely absent the past few weeks.
Very good analysis
Thanks, Peter!
It seems like JEPI isn’t ideal for long term. From this date forward, how long do you think one should stay invested in JEPI?
Hi there, confused about point #2 - I am assuming you should DRIP the distributions however eventually everyone will need to spend the value. Are you implying that the capital will depreciate over time ? Sorry I am not clear on this point.
Any Jepi alternatives out there that are more tax efficient?
No. Anything that generates income will also generate taxes. There is no way around it other than to defer your taxes by allowing those dividends to compound within the company (i.e.: buy lower-yielding dividend paying ETF like S&P 500.)
Thanks for the video. What if someone was to retire and move their1.25mill dollar 401k into an IRA. put 25% each into SCHD,DGRO,JEPI,JEPQ. Then just live off the dividends and not sell any of the base investment. Thinking this would create ~6K/month. Is there a downside to this other than the dividend could change or stop.
The principle could also go down.
Retired 2 years ago with 50 VOO, 25 JEPI, 25 JEPQ. I have not sold any shares. I have added shares. Principal took a hit last year but is rebounding this year. Paying all expenses and reinvesting the rest. Variable dividends can be a pain though.
One thing don't understand #3b, do you mean cannot take monthly dividend? Maybe you was saying taking out principle investment?
Would be curious to see a review of OAIE.
A full explanation of counterparties would be helpful for those that are unfamiliar with this term and function.
Would like to know more about stocks and your classes would yo build pass income and retirement for me and my family thanks very much bro
Could you rephrase this? I am having trouble understanding.
Nathan, amazing video. Your thoughts on the completely changed underlying portfolio, including Adobe, Microsoft, and Amazon at the top, and the significantly decreased dividend (Currently 36 cents vs 60 cents only eight months ago, with SEC yield down to 7.7%)?
Superb break down . Jp Morgan has another ETF JPEQ . Instead of putting portion of money into JEPI is it a good idea to split and allocate into JEPI and JEPQ?
I'm not familiar with that one.
I like the video but am confused about your qyld example where you say it has declined 75% since inception, isn't it only down around 33%? how do you get your number? my chart shows $25 in 2014 and now sitting at around $17.
Can you recommend international dividend funds for high dividend that are not pegged to dollars in case of dollar collapse? Pretty close to retirement.
Hey Nathan, I've been following your channel is 2020! Always love your explanations and insight. I have question unrelated; what program are you using to make the presentations? Thank you.
JEPI is great for the dividend alone. I have discovered selling covered calls on JEPI itself can amplify the already high dividend. In addition, for a small premium I protect against a large downside by purchasing out of the money puts. Thanks for the video, keep up your excellent work!
JPM has recommended to not use the SEC yield for comparison, but instead a lower average. The formula for SEC yield tends to over-estimate JEPI yields.
Great point! So 10% is probably best to use.