Dave, the reason JEPI had such a good 2022(losing less than SPY) was because it had a light concentration in Information technology. As you may recall the NASDAQ was down 30% and the S and P was minus 20%ish. JEPI has no downward protection by buying puts. I just checked and the current % in information technology for JEPI is 14.6%. This is much closer to the S and P 500 allocation. If technology takes another dive like 2022 you would have JEPI pretty much so follow suit. That said, I own JEPI but like SPYI more(own a bunch of it) because it distributes 1% of it's principle per month(12% annually) and 90% of its distributions are considered return of capital. If you own this in a taxable account as I do, paying 24% federal and 6% state it makes a HUGE difference.
I totally agree about SPYI. Not throwing shade on JEPI as it is a good product in the covered call space. I think SPYI is a better SP 500 CC ETF because of it's (IRS 1256) tax rules on SPX option income (60% LT/40% ST) and/or the CONSTRUCTIVE Return of Capital which is non taxable.
Good points! One of the JEPI advantages (or potential advantages) is the active management with stock selections. Looks like it worked last time. I'm still watching SPYI but own a few shares.
100% agree to all of this. Investing for income is great, but even greater if you are investing the gains from decades of growth investing. Firmly in both camps right now with taxable accounts transitioning to income and retirement accounts still invested in growth for at least another 10 years.
I have both at 67 years old. As stated, like the appreciation of voo and the distributions of jepi. Watch all your videos for information and really like your coverage of covered etf and clear explanations. If you have time, wondering if you noticed the increase in svol's expense ratio and your thoughts on it. Thanks!
Hi. According to some folks at Simplify... The expense ratio increase has to do with cash repo facilities they use to increase yields on cash and tbills. This increases the yield but is required to be reflected in the exp ratio per the SEC. Keep an eye out for this to decrease in the next few months with a move away from repo in SVOL. Now, enjoy your research on cash repo facilities! I did! Lol.
The explicit goal of JEPI is "low volatility" and IIRC they say they seek about 80% of the return of the S&P 500 (which will be realized primarily as distributions). Think of it as an alternative to about 70% in VOO and 30% in intermediate bonds.
Thanks for another great video. We also pay state income tax on distributions. Obviously that depends on the state you live. Here in MD, I pay about 6%. I like the idea of dividend/income investing. But for my taxable account I switched my focus on lower yielding ETFs (SPGP, CGDV,).
Thanks Dave, love your presentation style & channel! I'm having a hard time deciding which 'bucket' I fall into - I'm 60 and about 5-7 yrs away from retirement. Am I close enough to start slowly building up to more income positions? I do have 1 already, you're right, it is fun to watch it 😊
Hi. I'm probably a little premature but I've started to buy a few. Without asking a bunch of questions, I feel you would only be giving up a small % for some reduced volatility... A small % in your portfolio would not be a big deal IMO.
I'm in my early retirement JEPI and JEPQ are working out just fine for me to pay my bills. I don't worry about taxes as I need cash flow! Uncle Sam will always want its cut! If I had VOO, I'd selling some to get the similar income. It's fine in an up year however in a down year, it'll not be that pretty!
Great overall view of the differences and the advantages that each type of investing offers. This video falls in line with my thoughts for retirement. My Plan is simplified for retirement and is 3 pronged. 1. I will take the total amount of all my yearly expenses including food and fuel plus 10% and invest into funds like JEPI so as to replace my payroll check and receive the periodic dividends for daily expenses. 2. I will lock in 5 years of that total expenses number in 1 and invest into high grade U.S. government bonds for a cushion. 3. The rest will stay in main line ETF's such as the Spiders and Blackrock ETF for overall wealth building. Maybe there will be something to put into 2 and 3, we will see.
Hi Dave, enjoyed the video! Would you suggest to put VOO, JEPI, and SPYI into traditional IRA where tax will be applied once I make withdrawals in retirement. Thanks in advance.
Hi Dave- I would be interested in seeing a video on how seasonality affects the stock market and trying to follow a historical market return pattern for investing for a better return. I know timing the market is a bad idea usually but the market does seem to behave similarly at different times of the year and maybe this is enough information for a better return than just buy and hold? Anyway, I love your content and your perspective…
nice simple and efficient portfolio, did you think about including XLU in it ? using the same reasoning that you explained for XLV : XLU underperformed in 2023 but everybody needs utilities and if consumption grows so does XLU
Hi. I recently looked at TLTW in this video: th-cam.com/video/bzIObFNlWPg/w-d-xo.html And I looked at TSLY and NVDY is this one: th-cam.com/video/P953p1y_fZs/w-d-xo.html
What about buying Jepi/jepq/Spyi as a younger guy and letting the shares accumulate over time.? Today’s shares will be cheaper than they will in 20-30years . I don’t see anybody talking about this . Or is my idea going to my to back fire? I figure if I can get 1000 shares of something that distributes 10-12 % monthly and can build up to 10,000 by retirement that’s a good chunk of my monthly expense ( even if variable) .
It depends, because in certain retirement situations especially, sequence of return risk can be an outsized risk and JEPI would provide more protection from that.
Thank you for your analysis. I have XYLD 30% and DIVB 70% now. I buy those ETF from 50% of my salary. I may buy VTI instead of DIVB. I paid too much of tax in NY every year. So XYLD (30%) vs VTI (70%) should be good? My target is $3M ($1M of XYLD and $2M of VTI) in 15 years when I retire.
DIVB is a good fund and so is VTI. I'm not a fan of XYLD and prefer some of the newer versions like JEPI, SPYI, and GPIX. That NY state tax can eat you up as well... So if you still have time till retirement, might be good to avoid all of them in a taxable account.
@@wealthadventures Thank you for your thoughtful remarks. This is my another google account. I didn't anticipate you would respond to my question. After watching some of your earlier videos, I decided to sell DIVB and purchase SCHD (40%) today. Additionally, I plan to sell XYLD within the next six months and acquire DIVO (40%), which you recommended in one of your previous videos. While I agree with your advice to steer clear of high-income ETFs, I am interesting to buy some JEPQ (
Would it be a good idea to have jepi or jepq in my Roth Ira? I have voo and vug already. I thought would be good to have a dividend focused etf for the snowball effect
if im 35 and have 100000 and contemplating taking this 100000 and using it for more income to invest into growth, it may be beneficial by the calculators to invest 17000 a year with 0 in growth vs 7000 a year and have 100000 in growth etfs.
It is in a tax deferred account? I still think long term growth will outperform for total return. That is the goal. So really depends on if you can afford to not use the money at this time and have time till retirement. That way, it can do its job and grow.
As a foreign investor I'm wondering whether there are equivalents of JEPI domiciled in a country which doesn't charge withholding tax, such as e.g. Ireland or the UK?
there is an ETF Acc type from UBS in Ireland, 0.29% expenses, started in July 2020, 45% returns since inception but it is quite small with 6M EUROS AUM, I think Global X also has one in Ireland
All investing is "income" investing. The goal of investments is to fund future spending. The aversion to having to sell some shares in a down market is irrational when you factor in long term opportunity cost, fees and taxes. These covered call products don't do anyone any favors.
Dave, the reason JEPI had such a good 2022(losing less than SPY) was because it had a light concentration in Information technology. As you may recall the NASDAQ was down 30% and the S and P was minus 20%ish. JEPI has no downward protection by buying puts. I just checked and the current % in information technology for JEPI is 14.6%. This is much closer to the S and P 500 allocation. If technology takes another dive like 2022 you would have JEPI pretty much so follow suit. That said, I own JEPI but like SPYI more(own a bunch of it) because it distributes 1% of it's principle per month(12% annually) and 90% of its distributions are considered return of capital. If you own this in a taxable account as I do, paying 24% federal and 6% state it makes a HUGE difference.
I totally agree about SPYI. Not throwing shade on JEPI as it is a good product in the covered call space. I think SPYI is a better SP 500 CC ETF because of it's (IRS 1256) tax rules on SPX option income (60% LT/40% ST) and/or the CONSTRUCTIVE Return of Capital which is non taxable.
Good points! One of the JEPI advantages (or potential advantages) is the active management with stock selections. Looks like it worked last time. I'm still watching SPYI but own a few shares.
100% agree to all of this. Investing for income is great, but even greater if you are investing the gains from decades of growth investing. Firmly in both camps right now with taxable accounts transitioning to income and retirement accounts still invested in growth for at least another 10 years.
Sounds about right Bruce. We are on a similar path.
Jepi is a good income fund for retirees like me
SUPERLIKE. thank you for breaking down differences based on taxes. Helps make decision on how to approach Dividend ETF or not approach them.
Thanks!
I have both jepi and voo as well as vti
That works!
Always a wealth of information. Good job outta you.
Thank you!
I think a blend of high growth and high yeild with proper use of margin is the best thing overall..
Hcmt qqh lgh should be looked into
I have both at 67 years old. As stated, like the appreciation of voo and the distributions of jepi. Watch all your videos for information and really like your coverage of covered etf and clear explanations. If you have time, wondering if you noticed the increase in svol's expense ratio and your thoughts on it. Thanks!
Hi. According to some folks at Simplify... The expense ratio increase has to do with cash repo facilities they use to increase yields on cash and tbills. This increases the yield but is required to be reflected in the exp ratio per the SEC. Keep an eye out for this to decrease in the next few months with a move away from repo in SVOL. Now, enjoy your research on cash repo facilities! I did! Lol.
You get wonderful results Dave ! Well done.
Thanks!
Dave great video, can you review Goldman etf, GPIX and GPIQ
Will do! On the list.
The explicit goal of JEPI is "low volatility" and IIRC they say they seek about 80% of the return of the S&P 500 (which will be realized primarily as distributions). Think of it as an alternative to about 70% in VOO and 30% in intermediate bonds.
Sure but how do you stretch that into a 15 minute video? lol.
@@wealthadventures 😂
Another great, informative video, thanks Dave and happy 2024 (we hope it will be!)
Thanks Mister Groovy! lol. Happy 2024!
Thanks for another great video. We also pay state income tax on distributions. Obviously that depends on the state you live. Here in MD, I pay about 6%.
I like the idea of dividend/income investing. But for my taxable account I switched my focus on lower yielding ETFs (SPGP, CGDV,).
We are around 3.75% in Ohio.
Excellent video, clarity and brief, thanks.
Thanks!
Nice well rounded video.
Thanks!
Voo if you are not retiring, if you are 4 years or less to retire Jepi is better if you are going to live off the income
Somewhere in there pending your situation.
Thanks Dave, love your presentation style & channel! I'm having a hard time deciding which 'bucket' I fall into - I'm 60 and about 5-7 yrs away from retirement. Am I close enough to start slowly building up to more income positions? I do have 1 already, you're right, it is fun to watch it 😊
Hi. I'm probably a little premature but I've started to buy a few. Without asking a bunch of questions, I feel you would only be giving up a small % for some reduced volatility... A small % in your portfolio would not be a big deal IMO.
I'm in my early retirement JEPI and JEPQ are working out just fine for me to pay my bills. I don't worry about taxes as I need cash flow! Uncle Sam will always want its cut! If I had VOO, I'd selling some to get the similar income. It's fine in an up year however in a down year, it'll not be that pretty!
I think these are good products when you have a good use!
Great overall view of the differences and the advantages that each type of investing offers.
This video falls in line with my thoughts for retirement.
My Plan is simplified for retirement and is 3 pronged.
1. I will take the total amount of all my yearly expenses including food and fuel plus 10% and invest into funds like JEPI so as to replace my payroll check and receive the periodic dividends for daily expenses.
2. I will lock in 5 years of that total expenses number in 1 and invest into high grade U.S. government bonds for a cushion.
3. The rest will stay in main line ETF's such as the Spiders and Blackrock ETF for overall wealth building.
Maybe there will be something to put into 2 and 3, we will see.
Great plan! I'm doing the same! Retired early and it's working for me!
Love it! Man with a plan.
Hi Dave, enjoyed the video! Would you suggest to put VOO, JEPI, and SPYI into traditional IRA where tax will be applied once I make withdrawals in retirement. Thanks in advance.
Hi Dave- I would be interested in seeing a video on how seasonality affects the stock market and trying to follow a historical market return pattern for investing for a better return. I know timing the market is a bad idea usually but the market does seem to behave similarly at different times of the year and maybe this is enough information for a better return than just buy and hold? Anyway, I love your content and your perspective…
Appreciate the idea. Always feels like seasonal trades get trumped by some strong economic data but worth looking into.
Very informative. Thank you!
Thanks!
nice simple and efficient portfolio, did you think about including XLU in it ? using the same reasoning that you explained for XLV : XLU underperformed in 2023 but everybody needs utilities and if consumption grows so does XLU
That would be a fine addition and I like utilities in 2024 assuming rates start to come down.
Perfect Dave. Simple is good.
VTI
SCHD
JEPI FOR JUICE!
Which bond etf do you prefer?
Thanks again!!!
Hi Jeff. I'm mostly high yield with bond ETFs. I have SPHY, HYD, and SCYB. I have been buying AGGH recently after reviewing it.
Thanks, how about an analysis of XYLG, QYLG and RYLG ??
Hi. They make no sense to me... Buy 50% XYLD and 50% VOO to make XYLG and save half the expense fee. Right?
th-cam.com/video/uQ5Jrvc93z0/w-d-xo.html
JEPQ really did well this last year. About 22% return and 10 yield.
Yes! It did well. Good product but if you took the risk of owning the Q's you were rewarded. QQQ was up over 50%. Maybe it will give some back...
happy to design the wealth adventures logo for you if you’d like
Hi Can you please give your opinion on TLTW, LQDW, TSLY, NVDY ? Thanks
Hi. I recently looked at TLTW in this video:
th-cam.com/video/bzIObFNlWPg/w-d-xo.html
And I looked at TSLY and NVDY is this one:
th-cam.com/video/P953p1y_fZs/w-d-xo.html
What about buying Jepi/jepq/Spyi as a younger guy and letting the shares accumulate over time.? Today’s shares will be cheaper than they will in 20-30years . I don’t see anybody talking about this . Or is my idea going to my to back fire? I figure if I can get 1000 shares of something that distributes 10-12 % monthly and can build up to 10,000 by retirement that’s a good chunk of my monthly expense ( even if variable) .
I think you will do better with VOO and QQQ in the long run. You could run them side by side and see after a few years.
JEPI and other covered call etfs are an expensive way to pay yourself a monthly income. Sell 3%-4.4% off VOO and get better results.
I agree. Long term they will under perform their indexes.
It depends, because in certain retirement situations especially, sequence of return risk can be an outsized risk and JEPI would provide more protection from that.
Thank you for your analysis. I have XYLD 30% and DIVB 70% now. I buy those ETF from 50% of my salary. I may buy VTI instead of DIVB. I paid too much of tax in NY every year. So XYLD (30%) vs VTI (70%) should be good? My target is $3M ($1M of XYLD and $2M of VTI) in 15 years when I retire.
DIVB is a good fund and so is VTI. I'm not a fan of XYLD and prefer some of the newer versions like JEPI, SPYI, and GPIX. That NY state tax can eat you up as well... So if you still have time till retirement, might be good to avoid all of them in a taxable account.
@@wealthadventures Thank you for your thoughtful remarks. This is my another google account. I didn't anticipate you would respond to my question. After watching some of your earlier videos, I decided to sell DIVB and purchase SCHD (40%) today. Additionally, I plan to sell XYLD within the next six months and acquire DIVO (40%), which you recommended in one of your previous videos. While I agree with your advice to steer clear of high-income ETFs, I am interesting to buy some JEPQ (
Would it be a good idea to have jepi or jepq in my Roth Ira? I have voo and vug already. I thought would be good to have a dividend focused etf for the snowball effect
They should be okay as a small portion.
But what if you hold JEPI and use margin to buy others. Lower volatility makes sense then.
I'm one of those old anti margin guys but I get it.
if im 35 and have 100000 and contemplating taking this 100000 and using it for more income to invest into growth, it may be beneficial by the calculators to invest 17000 a year with 0 in growth vs 7000 a year and have 100000 in growth etfs.
It is in a tax deferred account? I still think long term growth will outperform for total return. That is the goal. So really depends on if you can afford to not use the money at this time and have time till retirement. That way, it can do its job and grow.
@@wealthadventures yeah tax free account. Yeah growth will probably outperform for the next 25 years.
thnx sir for your content , what about an non-american investor , is he still going to pay those taxes ?
As a foreign investor I'm wondering whether there are equivalents of JEPI domiciled in a country which doesn't charge withholding tax, such as e.g. Ireland or the UK?
Good question... I'm not sure!
there is an ETF Acc type from UBS in Ireland, 0.29% expenses, started in July 2020, 45% returns since inception but it is quite small with 6M EUROS AUM, I think Global X also has one in Ireland
Hi Dave, what do you think about this portfolio as a 22 year old focused on growth, looking to DCA and hold for 10+ years:
VOO, QQQM, SCHD, SCHG, XLK
Hello. All good products in my opinion. With plenty of time on your side, should see some nice growth. Just keep buying and stay committed. Good luck!
@@wealthadventures Thank you!
Would you tax on dividends if it’s in an IRA?
Nope.
JEPI will always loose out to VOO in long term and even in short term.
Short term who knows? If the S&P is flat, not sure how JEPI will not outperform VOO.
You’re right.Flat is where the call options can outperform, collecting premiums and options not being called out
All investing is "income" investing. The goal of investments is to fund future spending. The aversion to having to sell some shares in a down market is irrational when you factor in long term opportunity cost, fees and taxes. These covered call products don't do anyone any favors.
I am with you 100%... Make that 98%. I think there is a use for these in some portfolios just like I think options have a use in a portfolio.
I see virtually no difference in performance. JEPI will give you way more money overall.