80% equities 20% cash. I plan to take advantage of the s&p 500 as leading indicators predict above 10% rise by this year, my only issue is how to properly allocate a large stock/bond portfolio for substantial gains at minimum risk.
Keeping some gold is usually a wise decision. You would be better off keeping away from equities for a bit or, even better, seeking advice from an expert given the current market conditions and everything that is at risk with the current economy.
I agree, having a brokerage advisor for investing is genius! Amidst the financial crisis in 2008, I was really having investing nightmare prior touching base with a advisor. In a nutshell, i've accrued over $2m with the help of my advisor from an initial $350k investment.
To be kinda blunt I'm giving up on investing in stocks.... I put between 4000 to 5000 a month and it's nothing but down down down.... Sooooo frustrating and I only invest in boring companies
I hope that's not the case you should cost average into index funds for the long term at best if you're struggling with personal investing or sometimes it's even better to just hire a mutual fund manager. There's no shame over 90% of people people will underperform the index over the longer term the sp500 over a 20 year period has never lost a gain. Patience and steadiness is better than most TH-camrs stock recommendation.
Great advice here. Keep it simple, buy things you understand, take some risk but don’t try to shoot the lights out. Diversification is KEY! I use a CFA and it's a great hands off way to approach it, I conservatively follow *Lina Diniekiene's* recommendations and market entry and exit points, and tbh this makes it possible for me. Started in '22 but with a lot of financial strength and in-depth research I did hit that coveted 100K and recently the 1m mark :)
Haha! I feel great about 'the market' as long as the companies (or ETFs) we invest in have strong earning trends. Over many decades, the prices will follow net earnings within about 0.5%. Nobody, can explain all the short-term noise so as an investor you should be galvanized to tune out the static. Build a nice system based on your risk tolerance and goals, stay the course and win this simple game in the long run.
Two closed end funds, CSQ and CCD, are also Calamos. Fun fact, the founder John P. Calamos, Sr. is a combat veteran. He was a Forward Air Controller in Vietnam (boots on ground) calling in airstrikes.
I HAVE been in, CSQ for the Last, 3 Years ( I'm a Swing Trader that, LIKES Dividends, while waiting for,.. "Good",.. Cap Gains ! CSQ,.. "Gets IT, Done" for Me !
100% agreed, my so called target retirement fund in 401k had absolutely terrible return compared to sp500. I moved all to sp500 but biggest regret of my life I didn't do it sooner..What else is best way for me to invest 200k for stable cashflow?
you need a certified financial planner straight up! personally, I invest in ETF's and also love investing in individual stocks. yes it’s riskier but am comfortable in my financial environment
You're right, I and a few Neighbors in Bel Air Area work with an advisor who prefers we DCA across other prospective sectors. Instead of a lump sum purchase, Following this, my portfolio grew 35% in the last quarter.
@kansasmile I'm intrigued by this. I've searched for financial advisors online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
Pacer funds has the same thing comes in three flavors conservative moderate flex difference is the cap and downside % … I think you you have a ton of money and don’t want to loose it and yield better than bonds
In my youth, I used to run a hedged portfolio similar to how these funds operate. Over the long run you, after fees, you end up making about the same as you would in treasury bonds.
Great explanation of this product. We could also do this on more aggressive stocks since the downside is fully protected the upside will be a little higher because of higher implied volatility for some aggressive stocks.
This sounds familiar to some of the buffered ETFs that came out a couple years ago. That is a capped upside and a buffered downside for a period of time. My question is with one of those, someone could buy when the period starts. Then if the ETF reaches its top before buffering, I thought it would then be smart to sell then and wait for the next ETF to come along. If I thought of this, it has to be too simple, and I am missing something. I've never owned this kind of investment and I don't think I would ever do it. The ER on these are also 0.69%.
As the index climbs, the return for anyone buying the ETF reduces and downside develops. Problem is you need to find a buyer for a product with a lower return and downside. Not so attractive!
I think they have the hedge too close to the money. I like to sell the calls that pays for the hedge at a rate of about 3 to 1 in credit. (So if it costs me $100 for the hedge I get paid $300 for the short call). That way you can aggressively lower the cost of entry. You mentioned it Dave. Its the risk/reward ratio. You should do it 3 to 1 in my opinion.
Buffer ETF’s are also available like BMAY BJUN etc that protect the first 9%down and gives you first 17% up. Structured like Fixed Index Annuities but NO long term commitments and the cap doesn’t change arbitrary to whims of the insurance company. In a flat market you lose the.69% fee plus the 1.29% dividend you would have received in spy. This would be a place to put some of your bond portfolio money.
Do you have any opinions on THTA? It seems like an interesting income play that has performed pretty well with very low delta credit spreads… 13% yield on a stable share price is pretty nice.
Can you do one on IVVW and IWMW. Some of the lowest expense ratios for buywrite etf, also backed by ishares. Would love if you could contrast this with JEPI, ISPY AND.SPYI. Thanks Dave.
Good morning, and thank you. Question, If most money managers cannot beat the market, why should we as individuals be in the market if we are not better than the professionals..
Based on some very rough Math if you’d invested 100k in 2000 in SPY and 100k in this you may well have been better off today (I think around 20k) with this vehicle, without any of the pain. Think I might model it out properly.
Hi Dave In your example there is a $35k difference between the put they are buying and the otm call they are selling. How do they make up that difference so as to guarantee 100 pct capital protection? Cash position? Doesn't compute
True! I still need to dig through the prospectus but believe this is from cash. These products pop up when interest rates rise and it makes more sense to use options versus buying stocks.
So they have a Synthetic Covered Call SPREAD to capture ALOT more up side than a slightly otm or atm covered call would still given some downside protection
I think I understand the 100% downside protection, but how long do you need to hold the share(s) to make the gain? Is it kinda like a 12-month CD where you get the stated return if you hold for 12 months but get penalties for early cash out?
Insurance companies have been providing such funds for quite a while. If you take risk out, you don't earn the risk premium. It's that simple. These ETFs will not perform well.
How much does the $SPY need to rise for you to achieve your full 9%+ capped return? If $SPY was particularly bullish over the year, could you achieve the capped return more quickly and not need to wait the full year? The ETF started at 25 dollars. Is it guaranteed to never go below 25? Is that how the protection works?
SPY should drive the price and 25 should be the floor (or close). You may get close to the 9% return early but it would be hard to sell for a 9% gain until the options get to expiry.
Thank you. I have a question about the downside risk, if the stock drops by (say) 3% to 510 in your example, before the end of the year, would the price drop by 3%? In other words, do I need to keep it for a year to have the downside protection? Or it NEVER falls below the purchase price within the year and can only go up or stay the same throughout the year? I hope you see what I mean. Thank you very much!
It should stay between 0% and about 9.5% throughout the year. If it drops down towards 510 at expiration, you will have a small return overall since it is above 502... and near expiration it should be quite close to real price action if it is still between the 2 strikes of 502 and 552. Does that answer your question?
@@wealthadventures Thank you very much for your response. Yes, I think it answers my question. And thank you for your great channel! P.S. Please note there is spamming below, in the responses to davidbennet1
@@wealthadventures Thank you very much for taking the time to reply. I am still a bit confused as to why one has to buy it on the first day of the month. I guess I am not very smart. Thank you very much for your channel! 👍
@TheComedyChannel-oo5lk basically to provide the 0% loss they only cover the cost of the share at the start. If it starts at $25 but you later bought it at $26 . If market goes bad after the 1 year you will receive 25 per share. So you might loose a $1
So if you buy now 28 days later (from the start in early May), I will get what, less protection, more downside risk? Like buying from a gas station bathroom vs the corner drug store?
The problem with these are that they are a snapshot in time. You can do great for eleven and a half months and then the market corrects and you get nothing. I had an advisor buy some principal protected notes, which is what this is, and they sucked. This is the same thing hiding as an ETF
Seems like the promises of annuities. It's a synthetic collar. I have often thought that the insurance companies that provide annuities use this approach to be able to make their guarantees.
@@wealthadventures Yes I get that but after day 1 at what rate this ETF moves with the SPY underlying? within the cap , if SPY drops 20% black swan , the ETF can't go down that much correct? because there is a built in hedge
@@wealthadventures Sorry don't understand what you mean by "Established options" you mean the Flex but OTC options? or exchange traded options? But exchange traded options on SPY are americiun style , no good for this strategy and my fundamental question is at what rate the fund move upwards when SPY moves upwards ? no body seems to have a clear explanation if SPY move up 5% ( still within cap of say 9%) will the ETF move by 5%
I'm surprise that they did not use the ticker IUL (Indexed Universal Life Insurance (IUL)). It's copy the IUL without the insurance part. If I want something like this ETF, why not get IUL?!
80% equities 20% cash. I plan to take advantage of the s&p 500 as leading indicators predict above 10% rise by this year, my only issue is how to properly allocate a large stock/bond portfolio for substantial gains at minimum risk.
Keeping some gold is usually a wise decision. You would be better off keeping away from equities for a bit or, even better, seeking advice from an expert given the current market conditions and everything that is at risk with the current economy.
I agree, having a brokerage advisor for investing is genius! Amidst the financial crisis in 2008, I was really having investing nightmare prior touching base with a advisor. In a nutshell, i've accrued over $2m with the help of my advisor from an initial $350k investment.
Mind if I ask you to recommend this particular advisor you using their service?
Vivian Jean Wilhelm is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
I am a big ETFs guy. It has worked well for me. I still have 5 years or so until retirement and I sleep well at night.
To be kinda blunt I'm giving up on investing in stocks.... I put between 4000 to 5000 a month and it's nothing but down down down.... Sooooo frustrating and I only invest in boring companies
I hope that's not the case you should cost average into index funds for the long term at best if you're struggling with personal investing or sometimes it's even better to just hire a mutual fund manager. There's no shame over 90% of people people will underperform the index over the longer term the sp500 over a 20 year period has never lost a gain. Patience and steadiness is better than most TH-camrs stock recommendation.
Great advice here. Keep it simple, buy things you understand, take some risk but don’t try to shoot the lights out. Diversification is KEY! I use a CFA and it's a great hands off way to approach it, I conservatively follow *Lina Diniekiene's* recommendations and market entry and exit points, and tbh this makes it possible for me. Started in '22 but with a lot of financial strength and in-depth research I did hit that coveted 100K and recently the 1m mark :)
Congratulations! Thanks for reminding me to stop being Stupid. I've been buying stocks like a drunken sailor😂and not much too show for it🥲
Haha! I feel great about 'the market' as long as the companies (or ETFs) we invest in have strong earning trends. Over many decades, the prices will follow net earnings within about 0.5%. Nobody, can explain all the short-term noise so as an investor you should be galvanized to tune out the static. Build a nice system based on your risk tolerance and goals, stay the course and win this simple game in the long run.
Two closed end funds, CSQ and CCD, are also Calamos. Fun fact, the founder John P. Calamos, Sr. is a combat veteran. He was a Forward Air Controller in Vietnam (boots on ground) calling in airstrikes.
Interesting! Thanks for sharing.
I HAVE been in, CSQ for the Last, 3 Years ( I'm a Swing Trader that, LIKES Dividends, while waiting for,.. "Good",.. Cap Gains !
CSQ,.. "Gets IT, Done" for Me !
"Take that rubber out of your wallet and throw it away, you weren't going to use it anyway"
And I took that personally.
But am I wrong?
FUNNY.....Have fun with the rubber.
100% agreed, my so called target retirement fund in 401k had absolutely terrible return compared to sp500. I moved all to sp500 but biggest regret of my life I didn't do it sooner..What else is best way for me to invest 200k for stable cashflow?
I would avoid index funds, mutual funds, and specific stocks for the time being. Right now, the best option is a fixed income of 5%.
you need a certified financial planner straight up! personally, I invest in ETF's and also love investing in individual stocks. yes it’s riskier but am comfortable in my financial environment
You're right, I and a few Neighbors in Bel Air Area work with an advisor who prefers we DCA across other prospective sectors. Instead of a lump sum purchase, Following this, my portfolio grew 35% in the last quarter.
@kansasmile I'm intrigued by this. I've searched for financial advisors online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
Wow, her track record looks really good from what I found online. I'll take a chance and see how it goes. Thanks for the info
Appreciate the “cash is not trash” candor at the end.
It certainly is not trash... but might be time to add some bond duration. 5 year?
Pacer funds has the same thing comes in three flavors conservative moderate flex difference is the cap and downside % … I think you you have a ton of money and don’t want to loose it and yield better than bonds
In my youth, I used to run a hedged portfolio similar to how these funds operate. Over the long run you, after fees, you end up making about the same as you would in treasury bonds.
I could see it playing out like that.
True. Insurance companies have been providing such funds for quite a while. If you take risk out, you don't earn the risk premium. It's that simple.
Great explanation of this product. We could also do this on more aggressive stocks since the downside is fully protected the upside will be a little higher because of higher implied volatility for some aggressive stocks.
Perhaps. The put will be more expensive as well.
kind of I wished I used protection before so this is interesting to consider, especially if it is 100% pregnancy proof
A tale as old as time...
I want my $2.00 !!! Love that movie
Good movie!
Quoted it today at work.
Another great video - thanks sir!
Good report with a fun twist ! 👌👌
Thanks!
So far only had Calamos' CEF *CHY* (bonds, BB and lower, annual dividend yield ~11%) on my watch list.
This sounds familiar to some of the buffered ETFs that came out a couple years ago. That is a capped upside and a buffered downside for a period of time.
My question is with one of those, someone could buy when the period starts. Then if the ETF reaches its top before buffering, I thought it would then be smart to sell then and wait for the next ETF to come along. If I thought of this, it has to be too simple, and I am missing something. I've never owned this kind of investment and I don't think I would ever do it. The ER on these are also 0.69%.
As the index climbs, the return for anyone buying the ETF reduces and downside develops. Problem is you need to find a buyer for a product with a lower return and downside. Not so attractive!
@@wealthadventures Thanks. I knew there was something I was missing. I'll just stick with my regular ETFs and some mutual funds.
I think they have the hedge too close to the money. I like to sell the calls that pays for the hedge at a rate of about 3 to 1 in credit. (So if it costs me $100 for the hedge I get paid $300 for the short call). That way you can aggressively lower the cost of entry. You mentioned it Dave. Its the risk/reward ratio. You should do it 3 to 1 in my opinion.
I like this hedging strategy, especially if you’re trying to protect your portfolio from big downside moves
Well so much for 100% downside protection. Down 5% today
Buffer ETF’s are also available like BMAY BJUN etc that protect the first 9%down and gives you first 17% up. Structured like Fixed Index Annuities but NO long term commitments and the cap doesn’t change arbitrary to whims of the insurance company. In a flat market you lose the.69% fee plus the 1.29% dividend you would have received in spy. This would be a place to put some of your bond portfolio money.
Sounds about right.
Do you have any opinions on THTA? It seems like an interesting income play that has performed pretty well with very low delta credit spreads… 13% yield on a stable share price is pretty nice.
That is a new one to me. I will check it out.
Can you do one on IVVW and IWMW. Some of the lowest expense ratios for buywrite etf, also backed by ishares. Would love if you could contrast this with JEPI, ISPY AND.SPYI. Thanks Dave.
Yes. I've been looking as ISPY but will look at IVVW and IWMW as well. Thanks!
I bought 4 shares of CPSM the moment it was released. Cool.
High Roller!
It does not seem to working can you update?
Good morning, and thank you.
Question,
If most money managers cannot beat the market, why should we as individuals be in the market if we are not better than the professionals..
Most money managers don't beat the market. That is why we should buy the market - VOO, IVV or SPLG and chill.
Based on some very rough Math if you’d invested 100k in 2000 in SPY and 100k in this you may well have been better off today (I think around 20k) with this vehicle, without any of the pain. Think I might model it out properly.
Interesting! Let me know if you do.
That is only if you got in from day one
Any later than day one the protection goes down and its only good for one year
Yes!
I have 2 for you XDTE & QDTE. Would love to get your thought?
I will take a look!
Very interesting video. how do you invest your portfolio? What is your expected average ROI? Do you share these details somewhere?
Hi Dave
In your example there is a $35k difference between the put they are buying and the otm call they are selling. How do they make up that difference so as to guarantee 100 pct capital protection? Cash position? Doesn't compute
True! I still need to dig through the prospectus but believe this is from cash. These products pop up when interest rates rise and it makes more sense to use options versus buying stocks.
Great, thanks!
THANK YOU.
You're welcome!
looks a sound strategy however I didn't get which strike deep in the money did they purchase
I think he said $250 which would be a 99% delta if you used SPY LEAPS as of May 13th. I don't know anything about FLEX options.
So they have a Synthetic Covered Call SPREAD to capture ALOT more up side than a slightly otm or atm covered call would still given some downside protection
Can they do this same strategy, but monthly instead of annually? They can pay any upside as a distribution
They could. Probably already in the works the way these products are hitting the market.
I think I understand the 100% downside protection, but how long do you need to hold the share(s) to make the gain? Is it kinda like a 12-month CD where you get the stated return if you hold for 12 months but get penalties for early cash out?
Insurance companies have been providing such funds for quite a while. If you take risk out, you don't earn the risk premium. It's that simple. These ETFs will not perform well.
True. We get paid to take the risk
Do they pay monthly dividends
Nope.
How much does the $SPY need to rise for you to achieve your full 9%+ capped return? If $SPY was particularly bullish over the year, could you achieve the capped return more quickly and not need to wait the full year? The ETF started at 25 dollars. Is it guaranteed to never go below 25? Is that how the protection works?
SPY should drive the price and 25 should be the floor (or close). You may get close to the 9% return early but it would be hard to sell for a 9% gain until the options get to expiry.
No dividends? So if someone doesn't understand options and doesn't want to, like myself, this might be something to buy.
Maybe... Could get them back in the market.
Thank you. I have a question about the downside risk, if the stock drops by (say) 3% to 510 in your example, before the end of the year, would the price drop by 3%? In other words, do I need to keep it for a year to have the downside protection? Or it NEVER falls below the purchase price within the year and can only go up or stay the same throughout the year? I hope you see what I mean. Thank you very much!
It should stay between 0% and about 9.5% throughout the year. If it drops down towards 510 at expiration, you will have a small return overall since it is above 502... and near expiration it should be quite close to real price action if it is still between the 2 strikes of 502 and 552. Does that answer your question?
@@wealthadventures Thank you very much for your response. Yes, I think it answers my question.
And thank you for your great channel!
P.S. Please note there is spamming below, in the responses to davidbennet1
@@wealthadventures Thank you very much for taking the time to reply. I am still a bit confused as to why one has to buy it on the first day of the month. I guess I am not very smart.
Thank you very much for your channel! 👍
@TheComedyChannel-oo5lk basically to provide the 0% loss they only cover the cost of the share at the start. If it starts at $25 but you later bought it at $26 . If market goes bad after the 1 year you will receive 25 per share. So you might loose a $1
@@fusionev0 Thank you very much. It's all clear now!
Probably don’t include dividends
You don't own anything with this so no divs.
So if you buy now 28 days later (from the start in early May), I will get what, less protection, more downside risk? Like buying from a gas station bathroom vs the corner drug store?
New one should be released on 6/1. If the S&P is up since the release, you will not want to buy it. You will have downside and less upside.
@@wealthadventures yeah I kicked it around but after this video I definitely not going down that road. Thanks for the video
The problem with these are that they are a snapshot in time. You can do great for eleven and a half months and then the market corrects and you get nothing. I had an advisor buy some principal protected notes, which is what this is, and they sucked. This is the same thing hiding as an ETF
I don’t understand it. Dose it pay dividends?
Yes. That would be a concern.
Indexed annuity without the annuity. Is it 100% participation on the cap?
Full gain realized at the sold call strike.
What happens if Mr Market stays flat 🤔 ?
You would show a small loss from the fee. In that case, better off in cash.
@wealthadventures
With ZIVB, you can do better than that.
Or you can just buy put options.
True but that can be expensive.
Sounds like an annuity
In some ways. No guarantee of any return however.
A few questions. How is this different than the wheel strategy or Poor Man's?
100% downside protection from the purchased PUT would be the main difference.
@@wealthadventures so, you don't have to pay the fees if the fund declines? If you do then you will lose money. Just saying.
@@wealthadventures A very major difference
Seems like the promises of annuities. It's a synthetic collar. I have often thought that the insurance companies that provide annuities use this approach to be able to make their guarantees.
Sounds about right.
Is it 100% downside? and from what price? original price or the price you purchase at?
Downside is established day 1. Buying after day 1 and you could incur losses depending on the price.
@@wealthadventures Yes I get that but after day 1 at what rate this ETF moves with the SPY underlying? within the cap , if SPY drops 20% black swan , the ETF can't go down that much correct? because there is a built in hedge
@@jiti5034 That is true. It is limited by the established options.
@@wealthadventures Sorry don't understand what you mean by "Established options" you mean the Flex but OTC options? or exchange traded options? But exchange traded options on SPY are americiun style , no good for this strategy and my fundamental question is at what rate the fund move upwards when SPY moves upwards ? no body seems to have a clear explanation if SPY move up 5% ( still within cap of say 9%) will the ETF move by 5%
@@jiti5034 FLEX options, *European* style (see the prospectus on their web site).
I'm surprise that they did not use the ticker IUL (Indexed Universal Life Insurance (IUL)). It's copy the IUL without the insurance part. If I want something like this ETF, why not get IUL?!
This sounds similar to HEQT.
In some ways. HEQT is not fully protected but also offers more upside.
Dave, I don't have a rubber in my wallet... lol
Ha! That's what they all say.
No glove, no love.
So is it kind of a mix between a poor man´s covered call and a collar?
It looks like the zebra.
Any dividends?
Nope. Not with this product.
SPLG V CPSM V JEPI
Sounds IV sensitive……
No way just buy FEPI,
That's a bit of a different animal!
No thanks.
not worth it
I agree. Still an interesting concept.
Haha
Want ULTY. With 100% downside protection.
Pointless