I've subscribed to a number of income investing channels. Your calm, no-nonsense, analysis of stocks, markets and portfolio management has quickly become my go-to source for the education I need to make my own informed decisions for what works best for me. You do a fantastic job and I deeply respect your insights.
Thanks for your feedback. I appreciate you taking the time to let me know, and I'm glad that the information is helpful. The great thing about TH-cam is that you can imagine what you would want to watch...and then make it!
My two favorite analysis tools are Seeking Alpha and FastGraphs. Although your videos come in a close third and have the benefit of sweet ending music and funky dancing.
You've highlighted a key feature...funky dancing! I own the rights to that song so it won't be seen on any Fastgraphs videos ;). Thanks for sharing which resources you use!
Great Info ! Reminds me of the old saying "Give a man a fish and you feed him for a day. Teach him HOW to fish and you feed him for Life." I like this kind of video...
I like Ron Swanson's view: "Give a man a fish and you feed him for a day. Don't teach a man how to fish and you feed yourself. He's a grown man, fishing's not that hard."🤣
A long time ago I was busy and just looking for "experts" to tell me what to buy. The problem was that when the price fell, I didn't know whether to drop and run, or buy more.
High quality content. I’ve been a SA subscriber for a few years and its well worth it. Best in the business. There is often a wealth of information in the comment section of the articles too.
This video has been very helpful. You refer to Seeking Alpha's articles so often that I've been curious if it's worth the cost. For me it probably is. Will definitely consider a subscription when I retire. Thanks for this one!
Thanks for your feedback. I'd been assuming that everybody knew how it worked but when I took a step back I realized it can be confusing if you just start at the home page and try to figure out how to look at income investments. Glad it was helpful.
Thank you very much for valuable tips on Momentum and P/B charts in Seeking Alpha. I have been a premium subscriber for few years now. Mostly looking at articles and dividend data . They provide very valuable and reliable data but I included many valuable picks in my portfolio after watching Armchair videos 👍
I get all this info in the free version. The bottom 3rd of the page is not showing on many pages but I'm used to it. I appreciate the momentum tab you show. I've never been down that route. Overall I agree with your report here. I love SA.
I missed the Momentum tab for years...crazy! I'm glad that you're getting value out of SA in the free version. A lot of financial websites don't show anything useful unless you pay.
Very interesting video I use Seeking Alpha almost exactly the same way. I am an income investor, and I came to Seeking Alpha independently, and as you say, it is by far the most effective and least expensive and valuable investing tool in my tool bag.
A few points regarding Morningstar,. It is good for comparing individual stocks against other individual stocks, and funds against funds. You cannot use their rating to compare a stock against a fund as the rating means something different in each case. For stocks, the star rating is just a simple measure of the stocks current valuation. So for Apple, 2 stars means it is currently over-valued. For funds, the star rating is generally a measure of how well the fund is designed and managed. I get Morningstar free with my T. Rowe account and I do find it valuable for some of my investment strategies/accounts. I agree, for just what you are doing it has little value.
Thanks for that insight. Now it all makes sense! I didn't want to trash Morningstar overall as they produce a lot of useful information. However, it's not ideal for high yield investors.
Thanks for the great informational video! Ultimately, the more opinions you can gather on an investment, the better your understanding of it. I actually prefer to listen to people like yourself who obviously have a good understanding and experience in conjunction with reviewing all the free research data I can get.
Glad it was helpful, and thanks for taking the time to share your feedback. I hope Armchair Income will continue to feature on your list of "free research data" sources.
Awesome video! Although I don't agree with using a total return chart when thinking of portfolio erosion, as that would assume reinvesting the dividends. If I am living off the dividends I would rather use a price return chart, since I would be withdrawing the dividends as income. Obviously this depends on the level of income you receive from dividends, and what you spend on living expenses, and there are a million combinations of that spread!
I agree that a price chart is useful for looking at NAV creation erosion. However, for comparing the returns of 2 investments with different yields, Total Return is the only way to level the playing field. If one investment pays 10% and the other pays 2% and their price chart looks the same, it doesn't tell you the whole story.
The star rating for individual stocks at Morningstar indicates whether they think the stock is overpriced or not. Apple being at 2 stars just means it’s overpriced a bit, on the other hand SVOL at 5 stars is in Morningstar’s opinion selling at a significant discount. For Mutual Funds the star rating is a different animal, IMO a bit more of a quality score.
Really appreciate this video! I made my way to a subscription with SA for the analysis as well, and strongly concur with value in the comments. I'm a few months into my paid subscription and evaluation of utility for the cost. I have found that I always turn to it before making a final buy, sell, and even hold. Thanks for pointing out some features I have not yet discovered with SA and naming a few contributors you follow. If you have more, a list would be great!
Glad it was helpful! Thanks for sharing your experience. If I come across any other features that I think would be particularly suitable for income investors, I'll share them.
Under the “Momentum” tab I like to see the “Price Return vs Total Return” over the 5-10 year period. It provides a sense on how much of the total return comes from dividends vs price appreciation. It’d be great if the total return comes from both high yield dividend AND price appreciation. If the price is flat over 5-10 years at least you know the capital is preserved while you are earning a high yield. Sometimes even if the price goes down over the long time horizon, if the total return is reasonable it may still justify holding the position (e.g. ECC). The other benefit of this chart is that you can quickly see how bad the drawdown was in an external shock (March 2020) or in a bear market (2022), and how resilient it is based on the recovery afterwards.
That's a great suggestion! Thanks for sharing your insight. If the price is flat and the yield is high, I generally reinvest some of the income so that the income grows.
Fantastic content, thank you. I retire in 3 weeks and this information, along with so many of your other videos are exactly what I need to stay away from the jaws of those pesky annuity salesmen! LOL I hope your enjoying creating this content as I and so many others are finding it helpful. Bravo!!
Somebody has to pay for those annuity salesman's BMW ;) Glad its been helpful and congrats on your looming retirement. What an exciting time in your life!! My advice is to start visiting those places you've always wanted to visit "one day". For me, it was Italy.
Price to Book on BDCs seem to go down to 0.5 in a correction, such as COVID and the financial crisis of 2008. So having a heavy allocation to BDCs in a retirement portfolio risks a 50% drawdown in a panic. While I do own a few BDCs, I keep some powder in safer trades such as USTs just in case
Yes, BDC's tend to over correct during a major correction, at least historically. However, the better ones bounce back and also maintain their distributions. I wouldn't recommend a heavy allocation to any investment type, including BDCs.
Great review! Seeking Alpha is the gold standard for sure. Pretty shocking how much worse Morning Star is than Seeking Alpha. Even the free version of SA is better!
Always look forward to your videos and insights. Was wondering what you thought of CLM, but I think the fact that you showed it several times during this episode with the ratings tools you use explain why it is not in your portfolio. ;) Thanks and keep up the great work!
You got the hint...I'm not a fan of CLM :) Doesn't mean it doesn't work for some people. The NAV erosion requires so much reinvestment so I'd prefer to give it a miss.
Morningstar has useful reports that are manually written for various individual companies/REIT/stock instead of funds. So SA would be better for the latter
Excellent video! I’d ask you to consider going deeper on SA analysts. You’ve interviewed Steven Bavaria. Viewers might be interested to know that if you look him up in SA, you’ll see 221 articles. Perhaps there are other analysts you might introduce us to…
Another great video I really appreciate you creating them and I have started purchased all of the positions that you have suggested but I did keep VIASP and I padded a few other positions like MAXI and FEPI as well as all 3 of the Neos funds. I am willing to take more risk since I am still employed at least for the time being but now that I am 60 I want the severance package. I have referred your channel to many of my friends so perhaps you will get some new subscribers from New Jersey. Thanks Sal
Thanks Sal and shout out to New Jersey! I appreciate you spreading the word and give you a shout out when the channel hits 1m subs ;) I wish you all the best as your retirement approaches, its an exciting time!
Thank you for the great insights and suggestions. I very much enjoy your videos since, I stopped working almost 5 years ago, I am "too young" to get a pension and, the dividends are more or less 'paying for everything'. As per your videos, I see the usefulness of Seeking Alpha and I am considering a subscription, however, I find the SA portfolio tools quite limiting for non US stocks, even if they are listed in the US thru ADR - I am currently living in Europe, BTW, but most stocks are in the US, certainly those paying the highest yields. Because I don't really see foreign (to US) funds or stocks investments in the Armchair Income Portfolio (top 37), I wonder whether you have or consider/research non-US investments, and if so, whether Seeking Alpha meets your needs or what other tools you do utilize, especially when comparing US vs non-US stocks for total portfolio allocation.
Thanks for your feedback. I don't use the SA portfolio tool either. I use it for research. For my portfolio and monitoring income I use Snowball. I've toyed with income investments in Singapore, Canada, and Australia but the exchange rate ate into my returns. The US dollar is more consistent and there are so many choices in the US market. The income is more consistent and there's plenty of information available. For those reasons I haven't found other markets appealing. However, I'm open to the concept for the purpose of diversification.
Hello, and thank you for your efforts and materials you are sharing, if you dont' mind, I have two questions regarding your approach and portfolio. 1) Do you believe it is safe to have a portfolio that is so heavy in BDC's like yours? 2) What do you think about the Golub Capital BDC, ticker GBDC, do you think it is a good candidtate to become a part of the portfolio?
Thanks for watching :) 1/ I wouldn't use the word "safe" for any investment...there's risk! You're right, my portfolio does have exposure to BDCs, about 20%. There are several BDCs that I like but I don't want to increase my exposure beyond that level. The right amount of exposure will vary between investors. A more risk averse investor would perhaps be more comfortable with a 10% exposure. There are about 50 BDCs and I haven't done a deep dive on all of them so I don't have an opinion on GBDC.
@@armchairincomechannel Thank you for your answer! And could you please clarify regarding the Putnam BDC Income ETF (PBDC), the market cap is extremely small, liquidity volume is also more than modest, but it is one of the top holidngs in your portfolio, in spite of the fact that this ETF is very "young" ... I saw your video about this fund, but is there something that makes you so confidnet about this ETF ?🙂 Or you believe that now is the best time to jump in, until it's not too expensive? I'm asking because I like the idea of this ETF, but want to have another opinion how relible it is. Thank you!
Very helpful info. 1) I noticed people kept saying to watch out for NAV erosion for ETF. Does SA shows NAV trend anywhere? 2) Is there instruction on how to read the Metrics/Chart? Like how to read the Dividend Consistency Metric chart?
Glad it was helpful :) NAV is a tricky thing to monitor because it varies by asset class so no one chart can show it for every asset. For ETFs its easy because NAV = Price. For closed end funds I suggest using CEFConnect. For BDCs use the price/book chart I demonstrated. I don't understand your second question because I'm not familiar with a chart called "Dividend Consistency Metric". SA gives a grade for Dividend Consistency but I prefer to just look at the dividend history myself and make my own assessment.
@@armchairincomechannel Thanks for the reply. Looking at History shows only for that stock/etf. I was looking at the Comparison like you did for ARCC, HTGC...and instead of Price Return or Total Return, I picked "Dividend Consistency". I was basically looking for some way/metric to tell me which one has the longest "consecutive years of dividend payment" and "consecutive years of dividend growth"
Yes, I've heard of FDUS...it's in my portfolio as my 29th largest holding :) If you'd like the full portfolio, it's available here: armchairinsider.beehiiv.com/subscribe thanks for the suggestion about the comparison, sounds interesting!
Activ investor looking for income...love your take on this. Still for much of the terminology I miss the correct sense. For exemple, YTD dayly total return vs. 12 month rturn, vs. 1year return, etc.Why are these diferrent? ...Maybe a series of clarifications at this level (low :( ) could be beneficial for all viewers....Thanks,
Total return just means net price movement plus income received. The rest refers to the time period reviewed. Thanks for the feedback, I'll try to clarify the terms I use :)
Any thoughts on CONY and NVDY? Crazy returns for over a year now. Was thinking of putting $3000 in NVDY and $2000 in CONY in my ROTH and using the income to buy a little more and buy more stable long term funds. Looks like a full return on the $5000 through dividends would take a bit over a year.
I'm not a fan of either. They've done really well because the underlying stocks have done incredibly well. But that's not a long term investment strategy. The underlying stocks will fly high, correct, then recover...the Yieldmax versions won't recover as well.
Speaking of NAV erosion and share price charts vs total return charts. Does it concern you that share price can only go so low ($0) before eventually hitting zero? How do these funds that are built for income combat this mathematical fact?
I generally try to avoid NAV erosion. Some of my investments have experienced it over the short term. However, the funds that have a NAV chart that points down over the long term are to be avoided. In theory if they got close to zero they would be delisted and the remaining assets distributed to shareholders. I don't invest in those types of funds.
I have a question or maybe an idea for a future video. I am about 10 years away from retirement and I am currently about 90% in growth stocks with the rest in some income investments and bonds. As I get closer to retirement I am aware I should probably consider moving more into fixed income for the lower volatility in case we enter an extended bear market. I am also cognizant of the fact that many income investments like the ones you highlight are also lower in volatility and hold up better than stocks in bear markets when considering their distributions. Is moving more into income investments similarly protective the way that moving into bonds would be? I know you won’t give “financial advice” but it would be interesting to compare beta and performance of bonds to your favorite income funds. If there are any good income funds that were around during the 2000-2010 “lost decade”it would be great to see how they held up compared to bonds.
Thanks for your suggestion. I generally prefer to invest in funds that include bonds as part of their strategy than buying bonds directly. Whether or not bonds are a good investment depends on a lot of factors including risk tolerance, the shape of the yield curve, current rates, etc. At the moment, I think government bond yields are high enough to make sense in certain situations...eg holding cash for the short term that will be needed for a purchase. However, the lower that rates go, the less attractive they become. Looking back into the lost decade to see how the more established funds held up during the recession is a good idea. I'll give it some thought!
If you don't really need the income do you think that SVOL would still be better than an S&P fund with dividend reinvested monthly? Or would the fees of the fund outweigh the compounding interest so it would just be better to stick with a straight S&P over an SVOL?
They are 2 completely different investments. 1 holds the 500 largest stocks in the US and the other trades futures on the VIX. The S&P 500 is a lower risk investment. If you don't need the income, the S&P 500 delivers a great blend of high returns while being diversified across 500 companies.
Ever considered using margin to increase buying power when you are confident in the delta between fund yield and interest (cost of money)? Cheers from Las Vegas!
Shout out to Las Vegas! If you haven't finished a crazy night with a few drinks at the Peppermill, then you haven't been to Vegas :) As a retiree I'm risk averse. Capital preservation is more of a priority than maximizing returns. Margin works really well right up until the moment it doesn't. I need to know my downside is manageable. So no, I don't use margin and I sleep like a baby.
Morningstar stars are if it is currently at a good price…the 2 star for apple doesn’t mean that apple isn’t a great company but they believe that its current price is too high, it’s a 2 star price
That makes sense. I think price is important but I'm more interested in finding quality investments than timing the price to perfection. However, if you're a trader, price is critical.
Yes, I use premium and the price is about to increase to $299 at the end of September so I don't recommend waiting too long! If there's a sale next Black Friday it will be from the price at that time, which will be higher than it is now.
Still looking into these 2, along with XFLT. CLO's are complicated and I haven't come to a conclusion yet, but I'm interested in learning more about them.
Welcome to the channel, and congratulations on your retirement...an exciting time! Of the 3 brokerages you listed I've only used Schwab. I have found them to offer good service when I call, the website is OK but there may be better options. I'm satisfied with them. They don't offer any special features for income investors. I've heard from others that Fidelity is good if you want to use DRIP programs (I don't).
Not sure if this came out already, because I haven't commented on one of these before. This was a great video and I have downloaded it for future reference. I was going to ask you whether you had any solution to the issue of the US taxing dividends from US ETFs and the like, bearing in mind that similar income earned in Australia enjoys tax-free status within our superannuation fund. Any thoughts?
Thanks for your feedback on the video, I'm glad it was helpful. I don't have Australian tax residency so I don't have experience in your situation. If you're buying US stocks and funds and are subject to 15% tax withholding (per Australia's tax treaty with the US) then I suggest asking an accountant familiar with US tax filings to estimate the refund you'd receive from the IRS if you file a tax return with the IRS (which is optional). In many cases, the tax refund will exceed the cost of the accountant. In other words, the actual tax owed is less than 15%.
Thanks for that. One more curly question if I might - in pension phase, CGT is tax exempt. How does that apply to capital gains on the sale of US shares and ETFs ?
The big problem with Seeking Alpha is when reading an article they have a pop-up asking you to "Follow" the author. They do this several times while reading each and every article. Just as bad as ads.
I've seen that pop up and I share your dislike for all pop ups. For me it appears once when I begin reading a new article. I'd prefer that didn't do that, but I soldier through. I prefer it to sites like Zacks that light up like a Christmas tree with endless ads and pop ups. That drives me crazy. Zacks also pummels my email inbox.
@@armchairincomechannel There is a huge problem with total returns. (IMO) total returns is calculated like this TR= (Ending value - beginning value + distributions)/ beginning value * 100 it is not calculated reinvestments. I checked my math twice. SVOL is killing the S&P if it was calculated with reinvestments. Due to the compounding effect of monthly distributions some of these funds out preform the S&P 500 a lot more then it looks on the chart.
Not that I'm aware of. I took a look at Portfolio Visualizer too (a more complicated charting website) and didn't see a tax assumption option there either.
I'm currently subscribed to The REIT Forum, Systematic Income but ADS Analytics, and Inside the Income Factory by Stevan Bavaria. That's probably too much for most investors, but because of the TH-cam Channel I want to cover a lot of bases with my research. I'd say most investors would not need to subscribe to any groups, or if they have a niche interest, perhaps subscribe to 1.
Thank you for your always very interesting and helpful videos AND I am very grateful that you share your personal list of holdings with us in your email letter. Thank youuu!
I am a premium member on Seeking Alpha and subscribe to quite a few writers there. I really appreciate you walking us through the total return section of SA in this video. I wonder if you are one of the authors that I subscribe to. Your TH-cam channel name doesn’t line up with anything on SA that I can find.
Yes, there are hundreds of niche newsletters available at an extra charge. I don't think they're necessary but if you want a really deep dive on a topic or investment style, its an option.
I'm currently subscribed to The REIT Forum, Systematic Income but ADS Analytics, and Inside the Income Factory by Stevan Bavaria. That's probably too much for most investors, but because of the TH-cam Channel I want to cover a lot of bases with my research. I'd say most investors would not need to subscribe to any groups, or if they have a niche interest, perhaps subscribe to 1. There's so much info available with the Premium version of Seeking Alpha that if you start adding a lot of investor groups its becomes a fire hose of information and it also gets expensive.
I assume you would have to trust the person who wrote the article on Seeking Alpha. I do not know how one would get their article published on SA but I do know there is another TH-camr I follow who has had his article published on SA.
I wouldn't trust anything without verification. SA offers a diverse array of opinions. I like the opportunity to review various viewpoints and then make up my own mind.
It's funny because I want to read both sides without bias, but some people prefer to read content that clearly favors one argument. Having said that, most investments tend to have more authors leading one way than the other...it's rarely divided equally down the middle.
I have 3 brokerage accounts, and none of them have these features. However, if Fidelity offers monthly distribution charts, total return charts, and price/book charts, that's impressive. As for thousands of in depth articles about every stock and fund, including income focused investments (ie yielding 8-12%)...no... Fidelity does not offer that research tool.
I check Fidelity’s individual investment information as well as Seeking Alpha’s. There is no comparison. The insight you get from SA is far above that of Fidelity’s if you are an income investor, in my humble opinion.
@@dberry256 :You are correct but for the everyday average income investor like me , I can understand Fidelity's insight . You need a college degree for Seeking Alpha .
We must be reading different articles, although there are thousands of them. I'm mostly reading articles on the stocks and funds that I invest in and review (ie high yield) and find those articles to be focused on the outlook of the investment and its ability to sustain income...which is exactly what I want to know.
@@armchairincomechannel Now that I've read Steve Bavaria's book, I can focus in better. I just see a lot of bogleheads for some reason. Its a fine approach but just not what I'm looking for. Thanks for your suggestions, I will be checking them out.
I listened and watched to a few morning star youtube and podcasts, and even there they are talking about things in a very general sense, like something chatGPT would output. The interviewer is not asking for any specific recommendations. Such a waste of time.
If you want to join Steven's investment group, it's called "Inside the Income Factory" and its on Seeking Alpha. You can do a free trial to see if its a good fit.
The combination of Armchair Income, Steven Bavaria, and Seeking Alpha is a winning combination imo. I’ve been able to further diversify my portfolio by using their research as a starting point.
➡ My #1 Research Tool: Seeking Alpha ($30 Coupon +Free Trial): armchairincome.link/SeekingAlpha
I've subscribed to a number of income investing channels. Your calm, no-nonsense, analysis of stocks, markets and portfolio management has quickly become my go-to source for the education I need to make my own informed decisions for what works best for me. You do a fantastic job and I deeply respect your insights.
Thanks for your feedback. I appreciate you taking the time to let me know, and I'm glad that the information is helpful. The great thing about TH-cam is that you can imagine what you would want to watch...and then make it!
My two favorite analysis tools are Seeking Alpha and FastGraphs. Although your videos come in a close third and have the benefit of sweet ending music and funky dancing.
You've highlighted a key feature...funky dancing! I own the rights to that song so it won't be seen on any Fastgraphs videos ;). Thanks for sharing which resources you use!
I like the dancer @@armchairincomechannel
Fast Graphs is great to see if an investment is undervalued. I don’t find it too useful for CEFs though. CefConnect is my goto thing there.
I have never regretted my seeking alpha subscription!
Me too, I'm hooked!
Great Info ! Reminds me of the old saying "Give a man a fish and you feed him for a day. Teach him HOW to fish and you feed him for Life." I like this kind of video...
I like Ron Swanson's view: "Give a man a fish and you feed him for a day. Don't teach a man how to fish and you feed yourself. He's a grown man, fishing's not that hard."🤣
I like that :)
A long time ago I was busy and just looking for "experts" to tell me what to buy. The problem was that when the price fell, I didn't know whether to drop and run, or buy more.
High quality content. I’ve been a SA subscriber for a few years and its well worth it. Best in the business. There is often a wealth of information in the comment section of the articles too.
We're on the same page! Thanks for your feedback and for watching :)
This video has been very helpful. You refer to Seeking Alpha's articles so often that I've been curious if it's worth the cost. For me it probably is. Will definitely consider a subscription when I retire. Thanks for this one!
Thanks for your feedback. I'd been assuming that everybody knew how it worked but when I took a step back I realized it can be confusing if you just start at the home page and try to figure out how to look at income investments. Glad it was helpful.
Thank you for your videos and education. I'm starting to transition to income investment and these videos are gold to me.
Nice timing :) I'm glad the content is useful. Welcome aboard !
Who Knew??? Thank you!!!! I'll be using the momentum tabs from now on.
Glad it was helpful :)
Thank you very much for valuable tips on Momentum and P/B charts in Seeking Alpha. I have been a premium subscriber for few years now. Mostly looking at articles and dividend data . They provide very valuable and reliable data but I included many valuable picks in my portfolio after watching Armchair videos 👍
Thanks for sharing! I'm glad the videos have been helpful :)
I get all this info in the free version. The bottom 3rd of the page is not showing on many pages but I'm used to it. I appreciate the momentum tab you show. I've never been down that route.
Overall I agree with your report here. I love SA.
I missed the Momentum tab for years...crazy! I'm glad that you're getting value out of SA in the free version. A lot of financial websites don't show anything useful unless you pay.
Very interesting video I use Seeking Alpha almost exactly the same way. I am an income investor, and I came to Seeking Alpha independently, and as you say, it is by far the most effective and least expensive and valuable investing tool in my tool bag.
That makes 2 of us! I've searched high and low for a comparable tool and haven't found anything.
A few points regarding Morningstar,. It is good for comparing individual stocks against other individual stocks, and funds against funds. You cannot use their rating to compare a stock against a fund as the rating means something different in each case. For stocks, the star rating is just a simple measure of the stocks current valuation. So for Apple, 2 stars means it is currently over-valued. For funds, the star rating is generally a measure of how well the fund is designed and managed. I get Morningstar free with my T. Rowe account and I do find it valuable for some of my investment strategies/accounts. I agree, for just what you are doing it has little value.
Thanks for that insight. Now it all makes sense! I didn't want to trash Morningstar overall as they produce a lot of useful information. However, it's not ideal for high yield investors.
Thanks for the great informational video! Ultimately, the more opinions you can gather on an investment, the better your understanding of it. I actually prefer to listen to people like yourself who obviously have a good understanding and experience in conjunction with reviewing all the free research data I can get.
Glad it was helpful, and thanks for taking the time to share your feedback. I hope Armchair Income will continue to feature on your list of "free research data" sources.
Awesome video! Although I don't agree with using a total return chart when thinking of portfolio erosion, as that would assume reinvesting the dividends. If I am living off the dividends I would rather use a price return chart, since I would be withdrawing the dividends as income. Obviously this depends on the level of income you receive from dividends, and what you spend on living expenses, and there are a million combinations of that spread!
I agree that a price chart is useful for looking at NAV creation erosion. However, for comparing the returns of 2 investments with different yields, Total Return is the only way to level the playing field. If one investment pays 10% and the other pays 2% and their price chart looks the same, it doesn't tell you the whole story.
Thank you and I enjoyed the "how-to" video. I subscribed in January based on your input and haven't looked back.
Glad it was helpful. Thanks for sharing your experience :)
The star rating for individual stocks at Morningstar indicates whether they think the stock is overpriced or not. Apple being at 2 stars just means it’s overpriced a bit, on the other hand SVOL at 5 stars is in Morningstar’s opinion selling at a significant discount. For Mutual Funds the star rating is a different animal, IMO a bit more of a quality score.
That makes sense. Thanks for the explanation.
Appreciate the walk through and how you use the tool, keep up the good work!
Thanks for watching. I'm glad you found those tips helpful :)
I recently began watching your content and appreciate it very much.
Welcome to the Club :) I'll try to keep it interesting!
Great video. I’m also disappointed in morning star, I think they’re overrated. Seeking Alpha is pretty good for the income investing niche.
I agree! Thanks for sharing your experience.
Really appreciate this video! I made my way to a subscription with SA for the analysis as well, and strongly concur with value in the comments.
I'm a few months into my paid subscription and evaluation of utility for the cost. I have found that I always turn to it before making a final buy, sell, and even hold.
Thanks for pointing out some features I have not yet discovered with SA and naming a few contributors you follow. If you have more, a list would be great!
Glad it was helpful! Thanks for sharing your experience. If I come across any other features that I think would be particularly suitable for income investors, I'll share them.
Under the “Momentum” tab I like to see the “Price Return vs Total Return” over the 5-10 year period. It provides a sense on how much of the total return comes from dividends vs price appreciation. It’d be great if the total return comes from both high yield dividend AND price appreciation. If the price is flat over 5-10 years at least you know the capital is preserved while you are earning a high yield. Sometimes even if the price goes down over the long time horizon, if the total return is reasonable it may still justify holding the position (e.g. ECC). The other benefit of this chart is that you can quickly see how bad the drawdown was in an external shock (March 2020) or in a bear market (2022), and how resilient it is based on the recovery afterwards.
That's a great suggestion! Thanks for sharing your insight. If the price is flat and the yield is high, I generally reinvest some of the income so that the income grows.
Got it. That’s what you mean by “create my own growth”.
Very useful and timely video as I just joined Seeking Alpha. Kudos!
Welcome to the Club :)
Fantastic content, thank you. I retire in 3 weeks and this information, along with so many of your other videos are exactly what I need to stay away from the jaws of those pesky annuity salesmen! LOL I hope your enjoying creating this content as I and so many others are finding it helpful. Bravo!!
Somebody has to pay for those annuity salesman's BMW ;) Glad its been helpful and congrats on your looming retirement. What an exciting time in your life!! My advice is to start visiting those places you've always wanted to visit "one day". For me, it was Italy.
Thank you, yes, retiring airline pilot so zero cost air travel is in the plans!! Looking forward to your next video. Take care. 🍻
Awesome clarification on getting to the point, thank you!
Glad it was helpful!
Price to Book on BDCs seem to go down to 0.5 in a correction, such as COVID and the financial crisis of 2008. So having a heavy allocation to BDCs in a retirement portfolio risks a 50% drawdown in a panic. While I do own a few BDCs, I keep some powder in safer trades such as USTs just in case
Yes, BDC's tend to over correct during a major correction, at least historically. However, the better ones bounce back and also maintain their distributions. I wouldn't recommend a heavy allocation to any investment type, including BDCs.
Great review! Seeking Alpha is the gold standard for sure. Pretty shocking how much worse Morning Star is than Seeking Alpha. Even the free version of SA is better!
thanks! I was surprised too. I expect Morningstar is valuable for other types of investments, but not for high income.
Always look forward to your videos and insights. Was wondering what you thought of CLM, but I think the fact that you showed it several times during this episode with the ratings tools you use explain why it is not in your portfolio. ;) Thanks and keep up the great work!
You got the hint...I'm not a fan of CLM :) Doesn't mean it doesn't work for some people. The NAV erosion requires so much reinvestment so I'd prefer to give it a miss.
You know you've made it in life when you got your own intro jingle.
and I thought it was when you look out the window and see paparazzi. I got it all wrong! Hope you like the tune :)
Morningstar has useful reports that are manually written for various individual companies/REIT/stock instead of funds. So SA would be better for the latter
Yes, Morningstar does some things well. I assume that its coverage of the higher volume stocks is what most of its subscribers find useful.
Excellent video! I’d ask you to consider going deeper on SA analysts. You’ve interviewed Steven Bavaria. Viewers might be interested to know that if you look him up in SA, you’ll see 221 articles. Perhaps there are other analysts you might introduce us to…
Thanks Jim. We think alike! I'm working on a list to reach out to this week...I've received a couple of "No's" but I'll keep trying :)
Really good AC simple and to the point you have convinced me
Thanks! I don't like videos that waffle on about nothing :)
Another great video I really appreciate you creating them and I have started purchased all of the positions that you have suggested but I did keep VIASP and I padded a few other positions like MAXI and FEPI as well as all 3 of the Neos funds. I am willing to take more risk since I am still employed at least for the time being but now that I am 60 I want the severance package. I have referred your channel to many of my friends so perhaps you will get some new subscribers from New Jersey. Thanks Sal
Thanks Sal and shout out to New Jersey! I appreciate you spreading the word and give you a shout out when the channel hits 1m subs ;) I wish you all the best as your retirement approaches, its an exciting time!
Thank you for the great insights and suggestions.
I very much enjoy your videos since, I stopped working almost 5 years ago, I am "too young" to get a pension and, the dividends are more or less 'paying for everything'.
As per your videos, I see the usefulness of Seeking Alpha and I am considering a subscription, however, I find the SA portfolio tools quite limiting for non US stocks, even if they are listed in the US thru ADR - I am currently living in Europe, BTW, but most stocks are in the US, certainly those paying the highest yields.
Because I don't really see foreign (to US) funds or stocks investments in the Armchair Income Portfolio (top 37), I wonder whether you have or consider/research non-US investments, and if so, whether Seeking Alpha meets your needs or what other tools you do utilize, especially when comparing US vs non-US stocks for total portfolio allocation.
Thanks for your feedback. I don't use the SA portfolio tool either. I use it for research. For my portfolio and monitoring income I use Snowball.
I've toyed with income investments in Singapore, Canada, and Australia but the exchange rate ate into my returns. The US dollar is more consistent and there are so many choices in the US market. The income is more consistent and there's plenty of information available. For those reasons I haven't found other markets appealing. However, I'm open to the concept for the purpose of diversification.
Thanks again for your response, I very much agree with your comments. Cheers, Rk.
Excellent video, thanks.
You are welcome!
Hello, and thank you for your efforts and materials you are sharing, if you dont' mind, I have two questions regarding your approach and portfolio.
1) Do you believe it is safe to have a portfolio that is so heavy in BDC's like yours?
2) What do you think about the Golub Capital BDC, ticker GBDC, do you think it is a good candidtate to become a part of the portfolio?
Thanks for watching :) 1/ I wouldn't use the word "safe" for any investment...there's risk! You're right, my portfolio does have exposure to BDCs, about 20%. There are several BDCs that I like but I don't want to increase my exposure beyond that level. The right amount of exposure will vary between investors. A more risk averse investor would perhaps be more comfortable with a 10% exposure. There are about 50 BDCs and I haven't done a deep dive on all of them so I don't have an opinion on GBDC.
@@armchairincomechannel Thank you for your answer! And could you please clarify regarding the Putnam BDC Income ETF (PBDC), the market cap is extremely small, liquidity volume is also more than modest, but it is one of the top holidngs in your portfolio, in spite of the fact that this ETF is very "young" ... I saw your video about this fund, but is there something that makes you so confidnet about this ETF ?🙂 Or you believe that now is the best time to jump in, until it's not too expensive? I'm asking because I like the idea of this ETF, but want to have another opinion how relible it is. Thank you!
Very helpful info. 1) I noticed people kept saying to watch out for NAV erosion for ETF. Does SA shows NAV trend anywhere?
2) Is there instruction on how to read the Metrics/Chart? Like how to read the Dividend Consistency Metric chart?
Glad it was helpful :) NAV is a tricky thing to monitor because it varies by asset class so no one chart can show it for every asset. For ETFs its easy because NAV = Price. For closed end funds I suggest using CEFConnect. For BDCs use the price/book chart I demonstrated. I don't understand your second question because I'm not familiar with a chart called "Dividend Consistency Metric". SA gives a grade for Dividend Consistency but I prefer to just look at the dividend history myself and make my own assessment.
@@armchairincomechannel Thanks for the reply. Looking at History shows only for that stock/etf. I was looking at the Comparison like you did for ARCC, HTGC...and instead of Price Return or Total Return, I picked "Dividend Consistency". I was basically looking for some way/metric to tell me which one has the longest "consecutive years of dividend payment" and "consecutive years of dividend growth"
Great useful video. Many thanks
You are welcome!
Oh have you heard of Fidus BDC? Perhaps you could do a review of FDUS vs MAIN vs Ares?
Yes, I've heard of FDUS...it's in my portfolio as my 29th largest holding :) If you'd like the full portfolio, it's available here: armchairinsider.beehiiv.com/subscribe thanks for the suggestion about the comparison, sounds interesting!
Activ investor looking for income...love your take on this. Still for much of the terminology I miss the correct sense. For exemple, YTD dayly total return vs. 12 month rturn, vs. 1year return, etc.Why are these diferrent? ...Maybe a series of clarifications at this level (low :( ) could be beneficial for all viewers....Thanks,
Total return just means net price movement plus income received. The rest refers to the time period reviewed. Thanks for the feedback, I'll try to clarify the terms I use :)
Any thoughts on CONY and NVDY? Crazy returns for over a year now. Was thinking of putting $3000 in NVDY and $2000 in CONY in my ROTH and using the income to buy a little more and buy more stable long term funds. Looks like a full return on the $5000 through dividends would take a bit over a year.
I'm not a fan of either. They've done really well because the underlying stocks have done incredibly well. But that's not a long term investment strategy. The underlying stocks will fly high, correct, then recover...the Yieldmax versions won't recover as well.
Speaking of NAV erosion and share price charts vs total return charts. Does it concern you that share price can only go so low ($0) before eventually hitting zero? How do these funds that are built for income combat this mathematical fact?
*hit $0 or get delisted.
I generally try to avoid NAV erosion. Some of my investments have experienced it over the short term. However, the funds that have a NAV chart that points down over the long term are to be avoided. In theory if they got close to zero they would be delisted and the remaining assets distributed to shareholders. I don't invest in those types of funds.
i like your way aproching thanks for sharing your ideias I am a poor Portuguese
Obrigado :) Thanks for saying hi from your beautiful country (that I hope to visit one day).
Off topic, but what do you think of these CEF’s from Cornerstone? CLM etc?
Too much NAV erosion for me. The distributions might compensate for that but I prefer to focus on alternatives with less, or no NAV erosion.
Thank you for this need to know info!
You are so welcome!
I have a question or maybe an idea for a future video. I am about 10 years away from retirement and I am currently about 90% in growth stocks with the rest in some income investments and bonds. As I get closer to retirement I am aware I should probably consider moving more into fixed income for the lower volatility in case we enter an extended bear market. I am also cognizant of the fact that many income investments like the ones you highlight are also lower in volatility and hold up better than stocks in bear markets when considering their distributions. Is moving more into income investments similarly protective the way that moving into bonds would be? I know you won’t give “financial advice” but it would be interesting to compare beta and performance of bonds to your favorite income funds. If there are any good income funds that were around during the 2000-2010 “lost decade”it would be great to see how they held up compared to bonds.
Thanks for your suggestion. I generally prefer to invest in funds that include bonds as part of their strategy than buying bonds directly. Whether or not bonds are a good investment depends on a lot of factors including risk tolerance, the shape of the yield curve, current rates, etc. At the moment, I think government bond yields are high enough to make sense in certain situations...eg holding cash for the short term that will be needed for a purchase. However, the lower that rates go, the less attractive they become. Looking back into the lost decade to see how the more established funds held up during the recession is a good idea. I'll give it some thought!
If you don't really need the income do you think that SVOL would still be better than an S&P fund with dividend reinvested monthly? Or would the fees of the fund outweigh the compounding interest so it would just be better to stick with a straight S&P over an SVOL?
If you consider taxation on each SVOL dividend you are better off with S&P
They are 2 completely different investments. 1 holds the 500 largest stocks in the US and the other trades futures on the VIX. The S&P 500 is a lower risk investment. If you don't need the income, the S&P 500 delivers a great blend of high returns while being diversified across 500 companies.
Ever considered using margin to increase buying power when you are confident in the delta between fund yield and interest (cost of money)? Cheers from Las Vegas!
Shout out to Las Vegas! If you haven't finished a crazy night with a few drinks at the Peppermill, then you haven't been to Vegas :) As a retiree I'm risk averse. Capital preservation is more of a priority than maximizing returns. Margin works really well right up until the moment it doesn't. I need to know my downside is manageable. So no, I don't use margin and I sleep like a baby.
Morningstar stars are if it is currently at a good price…the 2 star for apple doesn’t mean that apple isn’t a great company but they believe that its current price is too high, it’s a 2 star price
That makes sense. I think price is important but I'm more interested in finding quality investments than timing the price to perfection. However, if you're a trader, price is critical.
Do you use the premium subscribtion modell at SA => $214/year if I book, do SA any other special offer i.e. at Black Friday or so...?
Yes, I use premium and the price is about to increase to $299 at the end of September so I don't recommend waiting too long! If there's a sale next Black Friday it will be from the price at that time, which will be higher than it is now.
Thoughts on EIC and ECC, particularly with anticipated Fed easing?
Still looking into these 2, along with XFLT. CLO's are complicated and I haven't come to a conclusion yet, but I'm interested in learning more about them.
Not related to the video but do you have an opinion in ticker EIC?
Not yet. I've been looking into EIC, ECC, and XFLT but CLO's are complicated and I haven't yet formed an opinion. Definitely interesting though!
I am new to the channel, retired 1 year ago... what are your thoughts on Schwab vs Fidelity vs Vanguard in the context of an income investor?
Welcome to the channel, and congratulations on your retirement...an exciting time! Of the 3 brokerages you listed I've only used Schwab. I have found them to offer good service when I call, the website is OK but there may be better options. I'm satisfied with them. They don't offer any special features for income investors. I've heard from others that Fidelity is good if you want to use DRIP programs (I don't).
@@armchairincomechannelthanks very much for getting back to me so quickly
Not sure if this came out already, because I haven't commented on one of these before. This was a great video and I have downloaded it for future reference. I was going to ask you whether you had any solution to the issue of the US taxing dividends from US ETFs and the like, bearing in mind that similar income earned in Australia enjoys tax-free status within our superannuation fund. Any thoughts?
Thanks for your feedback on the video, I'm glad it was helpful. I don't have Australian tax residency so I don't have experience in your situation. If you're buying US stocks and funds and are subject to 15% tax withholding (per Australia's tax treaty with the US) then I suggest asking an accountant familiar with US tax filings to estimate the refund you'd receive from the IRS if you file a tax return with the IRS (which is optional). In many cases, the tax refund will exceed the cost of the accountant. In other words, the actual tax owed is less than 15%.
@@armchairincomechannel Many thanks for your advice.
Thanks for that. One more curly question if I might - in pension phase, CGT is tax exempt. How does that apply to capital gains on the sale of US shares and ETFs ?
Amazing as always! Thank you!
Glad you enjoyed it!
I wonder why total return would be under the momentum tab.
Good question. I have no idea. It remains one of life's mysteries to me too.
Thank you for sharing 😊
Thanks for watching!
The big problem with Seeking Alpha is when reading an article they have a pop-up asking you to "Follow" the author. They do this several times while reading each and every article. Just as bad as ads.
I've seen that pop up and I share your dislike for all pop ups. For me it appears once when I begin reading a new article. I'd prefer that didn't do that, but I soldier through. I prefer it to sites like Zacks that light up like a Christmas tree with endless ads and pop ups. That drives me crazy. Zacks also pummels my email inbox.
Agree. Sometimes I have already followed the analyst, the pop up still happens. It’s not only annoying, also not smart. 😅
As Always Thank you. Brad
Thanks Brad. I appreciate you watching and commenting :)
@@armchairincomechannel There is a huge problem with total returns. (IMO) total returns is calculated like this TR= (Ending value - beginning value + distributions)/ beginning value * 100 it is not calculated reinvestments. I checked my math twice. SVOL is killing the S&P if it was calculated with reinvestments. Due to the compounding effect of monthly distributions some of these funds out preform the S&P 500 a lot more then it looks on the chart.
This is useful. Please consider describing how you identify new ideas. Where do new investments come from? Many thanks.
Glad it was helpful. Here's a video I made about finding new investments:th-cam.com/video/LCBnZGgCbZc/w-d-xo.html
I forgot to mention that you deserve at least 100,000 followers when compared to the great majority of other contents.......I 'm sure you'll get there
If you can find 80,000 friends to agree on that, then it shall be :)
@@armchairincomechannel ahahahah
Can you somehow "bake in" a tax rate in the total return graphs on SA?
Not that I'm aware of. I took a look at Portfolio Visualizer too (a more complicated charting website) and didn't see a tax assumption option there either.
Do you have a qdte video?
I don't have a QDTE video. So far, too much NAV erosion for my strategy. But it's still new.
@@armchairincomechannel I've started to buy some as a meme. Using my cc rewards to purchase it
Are you a part of any investing groups, which require monthly subscriptions?
I'm currently subscribed to The REIT Forum, Systematic Income but ADS Analytics, and Inside the Income Factory by Stevan Bavaria. That's probably too much for most investors, but because of the TH-cam Channel I want to cover a lot of bases with my research. I'd say most investors would not need to subscribe to any groups, or if they have a niche interest, perhaps subscribe to 1.
I like Yahoo finance as well
I use Yahoo Finance to check the VIX :)
Thank you for your always very interesting and helpful videos AND I am very grateful that you share your personal list of holdings with us in your email letter. Thank youuu!
You are so welcome!
It says this video was posted 10 hours ago. I was just now notified at 7:34 pm. ??
If I could explain the YT algorithm I'd be a bazillionaire. It seems that it staggers the release to some extent. I don't understand it either.
I am a premium member on Seeking Alpha and subscribe to quite a few writers there. I really appreciate you walking us through the total return section of SA in this video. I wonder if you are one of the authors that I subscribe to. Your TH-cam channel name doesn’t line up with anything on SA that I can find.
To my knowledge, he is not one of the authors.
do you have to pay extra over the premium service to subscribe to a writer?
I'll take that as a compliment, but no, I'm not an author on Seeking Alpha. I just have the TH-cam channel and newsletter (Armchair Insider).
correctamundo.
Yes, there are hundreds of niche newsletters available at an extra charge. I don't think they're necessary but if you want a really deep dive on a topic or investment style, its an option.
Do you subscribe to any Groups? Are those a separate fee?
I'm currently subscribed to The REIT Forum, Systematic Income but ADS Analytics, and Inside the Income Factory by Stevan Bavaria. That's probably too much for most investors, but because of the TH-cam Channel I want to cover a lot of bases with my research. I'd say most investors would not need to subscribe to any groups, or if they have a niche interest, perhaps subscribe to 1. There's so much info available with the Premium version of Seeking Alpha that if you start adding a lot of investor groups its becomes a fire hose of information and it also gets expensive.
I assume you would have to trust the person who wrote the article on Seeking Alpha. I do not know how one would get their article published on SA but I do know there is another TH-camr I follow who has had his article published on SA.
I wouldn't trust anything without verification. SA offers a diverse array of opinions. I like the opportunity to review various viewpoints and then make up my own mind.
your the best
I appreciate your encouragement, thank you! Thanks for watching and taking the time to comment.
I find the articles hard to sort as you can find arguments equally bad and good
It's funny because I want to read both sides without bias, but some people prefer to read content that clearly favors one argument. Having said that, most investments tend to have more authors leading one way than the other...it's rarely divided equally down the middle.
"Sound or visuals were significantly edited or digitally generated." - Does that mean that your Armchair jingle and cute dancer are AI-generated?
Yes. I used AI software to create the theme song for the channel. The dancing girl is from Canva; technically not AI. Oh…and I’m real :)
Any Brokerage Firm has the same research tool and its free . ( EX: Fidelity ) .
I have 3 brokerage accounts, and none of them have these features. However, if Fidelity offers monthly distribution charts, total return charts, and price/book charts, that's impressive. As for thousands of in depth articles about every stock and fund, including income focused investments (ie yielding 8-12%)...no... Fidelity does not offer that research tool.
I check Fidelity’s individual investment information as well as Seeking Alpha’s. There is no comparison. The insight you get from SA is far above that of Fidelity’s if you are an income investor, in my humble opinion.
@@dberry256 :You are correct but for the everyday average income investor like me , I can understand Fidelity's insight . You need a college degree for Seeking Alpha .
I find most of the articles are doom and gloom and all about equity growth vs the concerns of the dividend investor.
We must be reading different articles, although there are thousands of them. I'm mostly reading articles on the stocks and funds that I invest in and review (ie high yield) and find those articles to be focused on the outlook of the investment and its ability to sustain income...which is exactly what I want to know.
@@armchairincomechannel Now that I've read Steve Bavaria's book, I can focus in better. I just see a lot of bogleheads for some reason. Its a fine approach but just not what I'm looking for. Thanks for your suggestions, I will be checking them out.
❤😂
Thanks for watching :)
I listened and watched to a few morning star youtube and podcasts, and even there they are talking about things in a very general sense, like something chatGPT would output. The interviewer is not asking for any specific recommendations. Such a waste of time.
I haven't watched that content but I appreciate the feedback. I like specific information too!
I love your channel I would like to follow steven B and use your method so which membership should i buy? why htd over eto/ etg
If you want to join Steven's investment group, it's called "Inside the Income Factory" and its on Seeking Alpha. You can do a free trial to see if its a good fit.
The combination of Armchair Income, Steven Bavaria, and Seeking Alpha is a winning combination imo. I’ve been able to further diversify my portfolio by using their research as a starting point.