Why I Don’t Invest in YieldMax ETFs - Passing on Huge Dividends

When I first started my channel back in 2020, I had two main goals in mind. I wanted to analyze all of the major high yielding investment types that exist, since I’m primarily an income investor. But I also wanted to every now and then share my own journey as someone aiming to build up a massive income stream through dividends, which is likely what you’re in the process of doing. Throughout the years we’ve seen a lot of new investments launch that are designed to offer exceptionally high dividend yields, which is really encouraging for people like us.

But one of these new investment types that’s launched more recently are synthetic covered call funds. And this is a strategy that I’ve only seen utilized by YieldMax. These synthetic covered call funds offer the highest dividend yields out of anything you can find on any stock exchange. And often I’m asked by people, both here on YouTube as well as over on Patreon, why I don’t personally own any YieldMax funds if I really am an income investor that’s focused on high income from my portfolio.

[henrymitchell]

I have been a dividend focused investor for a long time. This does not mean I don't own growth stocks, I do. A balanced portfolio ideally includes a mix of both type. One way to minimize the anxiety out of stock market investing, is to make sure you keep a large cash cushion. I invest in the market, but never put all my money in market.

[kortyEdna]

I like investing in close-end funds that pay monthly dividends. The trick is to hold long term and reinvest the monthly dividends plus buy more shares on a monthly basis or when ever you can afford to. This can be easily done because close-end funds are bought and sold on the stock market just like regular stock. That’d be enough to create a portfolio that would pay you between $50k to $70k in dividend income

[RaymondKeen.]

My dividend journey began when I realized that two particular expenses in my budget were always going to go up and never go down. The two expenses were taxes and insurance. I realized that the dramatic rise in both will need some added income. So, I started buying shares paying dividends. I can now see that this will be the path I need to take to make sure those two expenses will not overtake my future income.

[JohnyBTC]

I love your channel, but everyone is missing the point with these products! These are designed for income. You can reinvest the distribution for compounding purposes or you don’t. Regardless, depending on the stock choice the distribution will pay itself off in 24 months or less. At that point everything received is house money and it doesn’t matter what the Nav does. It can go down, they can reverse split and it doesn’t matter because you’ve already received your initial back.

[malibudan]

If you were in NVDY for 10 months you got all your money back in dividends after that it's free money you are playing with so risk can be higher.

[bloodCount]

I have Jepq, Nvdy, Cony, Msty, Ymax, qqq, and fselx. Im up 30k for the year. I then use 50% to reinvest and 50% into the actual underlying. Thank you, nvidia 10 for 1 split

[JG-DivMan]

I admit to mixed feelings about the YieldMax funds. I think the most important part is to understand what they are, how they work, and where they might (or might not) fit into your portfolio.
Right now, I have small positions in YMAX and NVDY, but I'm treating them as shorter-term cash flow generation vehicles than buy and hold. Of course, if they continue to perform, I'll keep holding. But "set and forget" retirement assets? Nope.

[cadenyoungquist]

I don’t think you understand how this product works. The CEO even stated in his interview that these are not stay and park funds you need to manage them and DCA into them consistently in order for these to work properly in creating sustainable income.

[lucasanderson]

I've heard that index funds and ETFs provide diversified stock market exposure while spreading risk. I have over $800K in savings; What's the most effective strategy to allocate funds in my portfolio and generate profits?

[Jbig]

YieldMax funds are good for super charging your income now to help build up your div position in other stocks. If you put in 2K then once it grows big enough to take out your initial investment then its no problem you are only spending profits at that point and reinvesting profits. It helps to speed up everything use it while it last not gonna be around for 30 to 50 years we all know that much.

[___rakesh___]

Wait, do you think cryptocurrency will crash? I don't think so. I'm using Eledator, traders just do business instead of me :) I don't afraid even if crypto will crash

[vmoutsop]

Yieldmax funds: Keep an active eye on the funds, ride the wave as long as possible and then switch when things start to change.

[cliffdariff]

I've had AMZY since the beginning, not bad.

[joepahls]

YieldMax ETF's are great for anyone that wants to lose capital quickly. Bought a few MSTY shares out of curiousity last month and shares are down almost 30%, whatever yield it pays will never make it worthwhile.

[mikesmith]

One possible way to accept the non-diversification of Yield Max is to limit the percentage it might be in your total portfolio. I'm going to buy YMAX but it will only be 5% max of the total value of my portfolio. I'm 77yo and not interested in anything but income. To each, their own.

[freeagent.]

YMAG, NVDY, AMZY and FBY are good bets.

[josephpettit]

My ymax goal is to build it up then buy more stable income funds with those high dividends.

[tuatara]

I have gained much through Yieldmax Etfs since last year. I admit they can be unstable but regarding TSLY I'd rather be in an unstable 51.31% dividend yield than in a stable 6% yield. Besides, we cannot judge much anything that has not been 10 years in existence yet, and somehow the management is not that idiotic-sounding. I am sure at least one person in those financial management companies is also being careful. Anyway, let's wait and see a little longer. As a stock market investor, I am not primarily for stability or security. Otherwise, I'd be in bonds or money market.

[st.charlesofaberdeen]

I use the proceeds from the yield Max funds to fund my other dividend stocks in my portfolios.... Basically I'm just going to milk the golden calf until it's not the golden calf anymore and I'll go to something else but you can't ignore the profits that you can get focusing on yield Max and just distribute those gains throughout your portfolio❤

[skynet]

There's Ymax and its been doung good. I have a large position on it and its been my best decision