Well the NASDAQ is taking quite a spanking today being off over 2%–of course this pulls down the tech laden S&P500 as well–but the DJIA is up by a fair amount. Techs are worried about chip stocks being more heavily taxed (tariffs etc)–by tomorrow I expect this worry will be behind us as investors have shorter memories than ever.
Many times when common shares are off sharply it will tend to pull some of the income issues down with it–but not seeming to be the case today as issues are just up and down nickels and dimes and I am happy about that being the case.+
The 10 year treasury yield is off about a basis point to trade at 4.16%–one has to believe (at this moment) that the next leg down is going to take us to the 4% area—but it is going to take a favorable personal consumption expenditures (PCE) number next week to make that happen.
I have worked my way slowly back to the 60% area as far as my preferred stock and baby bond allocation goes–the balance is CDs, money market and treasuries. The ability to garner coupons in the 5.3% area presents a risk/reward proposition that I like–it has been so many years since we could get these yields it is difficult to wean oneself off of them. I am thinking 70% might be the ultimate allocation I am looking at–but all will depend on how well coupons hold up on competing instruments.
“Techs are worried about chip stocks being more heavily taxed (tariffs etc)–by tomorrow I expect this worry will be behind us as investors have shorter memories than ever.”
It will be interesting see how short term memory can come back to bite you in the ass…If a 10% tariff were to be implemented, by the time short term memory awakens , IT WOULD BE TOO LATE…markets anticipate 3-6 months for future probabilities…
FEPI is an equal-weight big tech covered call etf. Anybody have thoughts?
I told people for years now since we flipped back into bull market mode in 2023 that you basically just needed JEPI and JEPY for high income and even some cap appreciation since covered calls are sold on just 60-70% of the portfolio.
Now with rates coming down, TLTW and LQDW are interesting.
Interesting comments on JEPI from Scott Kaufman (Treading Softly) on SA- at min 13:00 on this Podcast:
” baby-bonds-cash-flow-and-portfolio-agnosticism-with-high-dividend-opportunities? “
I own 200 shares of JEPI since May 2024. JEPI owns selected stocks in the SP500. They write monthly call options on the SP500 index to generate income (along with dividend payout). It is an actively managed ETF, so their stock selections change but all their call option activity is against the SP500 index.
It generates annualized dividends of 6.88% – 7.34% depending on whether it’s the SEC yield or Distribution yield. Pays monthly.
This is a stock ETF that writes covered calls.
Thanks, Legend.vs
I checked out JEPY. I like their strategy. It is something that I cannot replicate myself. My Schwab account does not allow daily option trading. Nor do I think that I would be very good at it.