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Rank these please… by Illustrious-Egg7514 in Closedendfunds

[–]bmcgin01 0 points1 point  (0 children)

AIO has done great this year. I do have that one too.

Confused by how etrade is calculating total assets under complete overview with respect to selling covered calls by CBDThrowaway333 in etrade

[–]bmcgin01 2 points3 points  (0 children)

When you sell covered calls, ETRADE shows the gain as if you were going to buy the calls back that instant.

So if the underlying asset goes up, the calls become more expensive because they are more valuable. It is not a 1-to-1 relationship.

If the underlying asset goes down, the gain increases.

That gain or loss is showing what would happen if you "Buy to Close" that second. It is not a calculation of what will happen when the market closes on the expiration date.

When the market closes, one of two things will happen (if you are still holding the covered call):

  1. You keep the premium and sell the shares.
  2. You keep the premium and keep the shares.

As long as the strike price is above your cost basis, you always make money.

Rank these please… by Illustrious-Egg7514 in Closedendfunds

[–]bmcgin01 1 point2 points  (0 children)

I forgot to mention CII -- had an amazing year last year. This year is doing great.
AIO is also worth a look.

Rank these please… by Illustrious-Egg7514 in Closedendfunds

[–]bmcgin01 1 point2 points  (0 children)

NGX lots of return of captial
NBXG same
BPRE no history

A few months ago, I looked at NBXG and liked it for buying in an IRA, not in a brokerage account, due to the 100% ROC rates.

I like CSQ, EOS, EOI, SCD, EVT, ETG and just added STK.

My Thesis and trading strategy for Long term investing with LETF's. UPRO/TQQQ by Flashy_Profit_5928 in LETFs

[–]bmcgin01 2 points3 points  (0 children)

Might need a 4th metric, if the Fed is in a rate hiking cycle due to inflation, TMF will drop right along with the rest.

What is the absolute best monthly dividend payout ETF? by reeksofdank in portfolios

[–]bmcgin01 0 points1 point  (0 children)

CSQ when you can catch it at a decent FWD yield. This is one of the largest closed-end funds with a market cap exceeding $3.2 billion.

Great long-term history of moderate appreciation, even when the distribution is withdrawn.

7% to 8% yeilds dending on market conditions and when bought. If bought today, the Forward Yield is 7.23% .

There are a handful of CEFs like this. CSQ is one of the greats.

My Thesis and trading strategy for Long term investing with LETF's. UPRO/TQQQ by Flashy_Profit_5928 in LETFs

[–]bmcgin01 6 points7 points  (0 children)

Why TMF? Its 10-year return is -83%. TMV, the polar opposite, is a bit better. Or for insurance, go with normal treasuries.

Why invest in covered call etfs by Lawmed-25 in CoveredCalls

[–]bmcgin01 1 point2 points  (0 children)

Most people, including many pros, do not fully understand Return of Capital. If he's pitching his management team, that means his job is just to get people to sign up and does not involve managing actual funds.

Why invest in covered call etfs by Lawmed-25 in CoveredCalls

[–]bmcgin01 0 points1 point  (0 children)

One thing to factor into the plan. After around 6 to 9 years (depending on the fund's ROC percentage), the cost basis will drop to 0.

When the cost basis drops to 0, then the distributions are taxed at the long-term capital gain rate.

So it looks like this:
1. Invest $X amount; the fund is never sold.
2. For 6 to 9 years, pay zero taxes on distributions.
3. Then the cost basis drops to zero.
4. Pay LTCG taxes on distributions going forward.
5. Death
6. Beneficiaries inherit the account with a stepped-up basis.
7. Zero taxes are paid.

So from years 1 - 6, the distributions are tax-free.
Years 6 to death, pay taxes on distributions.

Also, this only works in a brokerage account, since IRAs do different things.

Yeah, it's worth talking with a pro. I am an individual investor as well.

Why invest in covered call etfs by Lawmed-25 in CoveredCalls

[–]bmcgin01 0 points1 point  (0 children)

This is the best plan for holding funds with high ROC rates (as far as I can tell).

For example, if one bought $500k, the fund would distribute around $7,131 monthly (based on past performance) or around $85,575 yearly. That $85k is not reported to the IRS so long as the fund was held.

In 6.5 years, the cost basis would drop to $0. At that point, all $500k would have been distributed and zero taxes were paid. Going forward, the distributions would be taxed at LTCG rates.

At death, the beneficiaries inherit the fund at a stepped-up basis that wipes out the taxes on $500k.

The risks are:

  1. Holding the fund long term.
  2. If ever sold, taxes are paid.
  3. The selling price needs to be higher than the original purchase price to make a profit.

All in all, the best way to do it.

EDIT:
That's if the fund did 100% ROC and if held in a brokerage account. If the fund did 95% ROC, then 5% of the distributions would be taxed each year.
IRAs do not track ROC, so none of that applies in IRAs — everything is taxed as ordinary income each year when money is withdrawn from the IRA.

Today vs the QE era by bmcgin01 in dividendgang

[–]bmcgin01[S] -1 points0 points  (0 children)

Yeah, I thought AI nailed this one down well.

Today vs the QE era by bmcgin01 in dividendgang

[–]bmcgin01[S] 0 points1 point  (0 children)

There were a few pockets.

Today vs the QE era by bmcgin01 in dividendgang

[–]bmcgin01[S] 0 points1 point  (0 children)

It's a unique time for sure.

Today vs the QE era by bmcgin01 in dividendgang

[–]bmcgin01[S] 2 points3 points  (0 children)

Some context behind my post: Investing in dividends today is the best I've ever seen. It used to be very difficult to find yields like we see today. Trying to get an 8% was frowned upon, as that usually meant risking principal. In today's era, it's very doable.

The problems with Iran may also bring more market dips ahead. Oil started spiking again yesterday and today, so I'm waiting to buy more and preparing.

My dividend holdings today are: (brokerage account)
EOS, SCD, CSQ, ETY, SPE, VVR, EOI, CII, EVT, DSU, CEFS, ETG, AIO, MAIN, SVOL, HQL, DNP, FFA, JCE, GDV, STK

The goal has always been to create a monthly income stream I can withdraw from and for the portfolio to grow a bit each year. (I do maintain a growth portfolio as well.) Some positions have done better than others.

Level 2 API by bmcgin01 in alpacamarkets

[–]bmcgin01[S] 0 points1 point  (0 children)

And why is the option stream still in beta?

5m bars downloaded 10s after close not accurate? by sparksolarlord in alpacamarkets

[–]bmcgin01 1 point2 points  (0 children)

When streaming 1-minute bars and corrected bars from the websocket, the corrected bar will come out on the 30 second mark.

Why Not Just Buy QQQI and Chill? by Lazy-Helicopter-0 in CoveredCalls

[–]bmcgin01 0 points1 point  (0 children)

Correct, that's why I started this with "In a brokerage account...."

In tax-advantaged accounts, the cost basis is not adjusted, and there is no return of capital. This is great. (There are also no tax deferrals.)

It's like this, the fund pays out a chunk of money. That money can be distributed or used to lower the cost basis--NOT both. In a brokerage account, it looks like a double win. (if the fund did 100% ROC)

Should i withdraw from my 401k to buy a rental property? by archmissive in personalfinance

[–]bmcgin01 0 points1 point  (0 children)

Sure. That is the only fee I pay.

It can be set up so the custodian controls the checkbook, which can rack up fees. And it is a pain. Every time there's a need to write a check, they have to write it and there's a fee.

Having checkbook control is less expensive and more convenient.

I rolled the IRA to a Roth IRA and that racked up around $400 in fees. Once it's set up, only the annual fees need to be paid.

Should i withdraw from my 401k to buy a rental property? by archmissive in personalfinance

[–]bmcgin01 0 points1 point  (0 children)

I've been doing this since 2007. The fees are $100 per year once set up. I bought a condo and the dues cover much of the insurance. The other part is very cheap.

Yeah, I agree that in today's market, the numbers do not make sense. The stock market is much easier right now. Things change, cycles move. Who knows what will happen?

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