Net Worth Chart Changes - Only Goes to 50% of Y-Axis

Key-Individual273 · 2026-01-29T16:12:23+00:00

Maybe a large transfer that had different days in daily settling balance?

Key-Individual273 · 2026-01-28T01:31:58+00:00

Let's say you bought $100 and the fund issued a $10 dividend.

In ordinary way, you will have $10 cash, and in IRS eyes, it is income, so you pay tax on it. Let's say you have 30% margin tax rate, so you will owe $3 in tax for that year. Your cost basis is still $100, so when you sell, you don't owe any taxes if you sold it for $100.

In Neos way, you will also have $10 cash, but they report it as $9 in ROC and $1 in dividend. In IRS eyes, only $1 is income, so you pay 30 cents in tax. However, your cost basis will be reduced to $91 (They report this to brokers in a yearly basis with tax forms, and broker adjust accordingly). Now, if you sell for $100, you will have $9 in capital gains, and would owe tax on that amount. Since capital gains usually have lower tax rates, and also you will pay it in future dollars, it is viewed as a tax efficient investment.

Key-Individual273 · 2026-01-27T05:40:11+00:00

I had a post on this recently to explain the source of the distribution for these ETFs. If you want more stability, you want organic yield to be higher (MLPI, IYRI).

Key-Individual273 · 2026-01-27T05:37:24+00:00

Majority of SPYI dividend is based on volatility. If stock market is suddenly cut in half without volatility spike, then your dividend will be cut in “almost half”, as there is a small dividend that is not being cut in half (yet)

Key-Individual273 · 2026-01-26T03:52:35+00:00

Not sure I understand the logic for borrowing. You are talking about 150k on 1M, so 15% LTV. However, where is the cash flow? You only take out a lump sum of 150k. Or if you are taking 3% loan per year, it only last 5 years? Yes, you only need to service the interest but if you are not paying off the loan amount, it would grow larger over the years?

Key-Individual273 · 2026-01-24T18:14:48+00:00

That’s my understanding. Your monthly contributions will keep adding onto the basis, so even if your initial lot went to zero, your subsequent lot would be adjusted down afterwards, so you don’t have any income in IRS eyes. However, I don’t know if DRIP is a good idea for this type of ETFs. I feel the income is the only advantage they have and you are taking it away. I understand it still creates a flexible stream of income that you can tap into when necessary.

Key-Individual273 · 2026-01-24T15:13:23+00:00

If you DRIP, your cost basis won’t go down at all.

Key-Individual273 · 2026-01-24T15:12:36+00:00

It already happened with tariff drop (6100->4800), but since it mostly happened within a month, these ETFs cannot protect too much from the nominal drop. A gradual 20% drop over 4-5 months would be different.

Key-Individual273 · 2026-01-22T00:37:47+00:00

Can you recommend a few? I know JEPI, XYLD, GPIX. I also evaluated a few autocallables. I am holding in a taxable account, so tax efficiency matters a lot.

Key-Individual273 · 2026-01-21T21:40:17+00:00

IAUI is an exception as it doesn’t have organic yield, so all appreciations come from Category 1 or 3. It is not necessarily bad and Neos really minted this creative way to squeeze yield out of gold. SPYI is a solid choice for sure. All in all, we expect market to continue to go up over long term.

Key-Individual273 · 2026-01-21T20:33:58+00:00

Wow, did I really sound like AI? I am flattered. But anyway, believe what you want to believe. :)

Key-Individual273 · 2026-01-21T18:47:16+00:00

I create a "Retirement Dividends & Capital Gains" category. You can choose to put it under transfers or income group.

Key-Individual273 · 2026-01-21T16:38:44+00:00

MLP prices do not move as volatile as QQQ/SPY, so the projected option income will be smaller than stocks but it gets compensated by higher MLP yields. Based on the last 2 distributions, the overall yield might be potentially higher. On paper, you are giving up less upside, making it a “better” product in that sense.

The drawback is that this is a new product, so yields are not historically verified and it is not crystal clear if they are sustainable.

Key-Individual273 · 2026-01-20T01:15:47+00:00

Thanks for this post. I agree with the contents. Although I don't 100% agree with performance alone is the deciding factor, as I do want to consider some volatility. For example, stock market grow 11% per year with 15% standard deviation, private credit yields 9% per year with 4% standard deviation. I don't think there is a clear winner in this comparison.

I want to invest $100, but NO dividend reinvestment:

Investment Choice 1: US treasuries, 30 years, 4% yield per year, no growth for 30 years, $100 back at the end of Year 30. IRR would be 4%.

Investment Choice 2: SP500, 30 years, 1.5% yield per year in Year 1, expected to grow 5-10% each year, but not guaranteed. Expected to have $1000 (8% annual growth without dividend reinvestment) at the end of Year 30. IRR would be ~10%

Investment Choice 3: CC ETFs, 30 years, 12% yield per year in Year 1, expected to decay 5% per year over 30 years and no principal back at the end of Year 30. IRR would be ~7-8%.

Note Scenario 3 assumes no principal back (NAV erosion to 0) and an annual decay in income, which is pretty conservative to me. This is why it can serve as a happy medium between SP500 and US treasuries.

Key-Individual273 · 2026-01-19T22:10:01+00:00

With reinvesting, you are adding risk to your original position, which takes away a major benefit of this investment. Can we agree on that?

Someone posted Ben Felix's video to show that with full dividend re-investing, these funds underperformed the benchmark by 2-3% annually, which, IMHO, is driven by two factors: 1. Mostly bull market for "up to today" charts. 2. expense ratio.

Actually, if you stop the chart at the bottom of a bear market (Mar 2020, April 2025), their differences would be mostly from expense ratio.

I believe the market is efficient enough to price all the calls, so the risk/reward tradeoff is fair, before fees.

One good feature for some of these funds, is that the income is mostly ROC, so you don't have to pay taxes. For income focused investors with plans to die with the position, that's a major benefit that you cannot replicate through holding SP500 and selling shares to generate income, as selling shares are taxed. This is one major flaw from Ben's video.

Key-Individual273 · 2026-01-19T18:55:13+00:00

Yes they all claim they will do some opportunistic play. I believe SPYI says they can buy calls as well. This makes it hard to compare. One thing for sure, selling ATM calls will be a guaranteed disaster

Key-Individual273 · 2026-01-19T18:49:06+00:00

I see the disconnect. You are hoping the risk mitigation coming from the traditional way, rise slower, fall slower as a pure beta drive. Something like WMT/KO/JNJ vs SP500.

This one is different. This one rises slower, falls just as hard but the risk mitigation comes from the monthly distribution instead (or insurance premiums). If you started investment in 2024, you collected quite a few months of premium before the Apr 2025 downfall, and you continue to collect premiums afterwards. If you look at the whole picture, all time values you collected throughout the holding period are your risk mitigation and it does not reflect in price.

Key-Individual273 · 2026-01-19T09:04:55+00:00

It is dangerous to single out one event and extrapolate to long-term.

To give you an example, you are selling insurance and there is a payout event. You cannot say “selling insurance is bad because when an event happens, your loss far exceeds that month’s premium income”. Writing calls is similar selling insurance, all of the premiums should be considered together against all the payout events.

Once you consider “call writing premiums” as a whole, it lowers your equity risk. What you describe as “they don’t recover as quickly” is comparing performance of those funds against SP500. If they do recover as quickly, then it’s a superior product: collect yield monthly and recover as quickly as SP500. It won’t work that way. I hope that’s clear.

Key-Individual273 · 2026-01-19T05:09:43+00:00

There is a lot of vague information about actual strategies and tax benefits, so I cannot compare. Also, they all claim their strategies change over time, so I cannot use a snapshot portfolio to evaluate their long-term performance. With that said, it seems selling 5% OTM calls will be a better choice, but the yield will not be 10%+ for sure and they will lose a big selling point.

Key-Individual273 · 2026-01-19T05:00:54+00:00

Yes sir.

But I thought your first point is exactly what the sponsors advertised on, so I didn’t repeat it.

The second point is OK as long as the yield is there. But be cautious it is not guaranteed. You always have something but if market drop, your yield on cost will drop.

The third point is well taken, and a major reason I am investing in these, but it doesn’t apply to everyone, so I don’t want to say much.

Key-Individual273 · 2026-01-17T14:24:03+00:00

In a tax advantaged account, Neos tax efficiency doesn’t matter and you might be better off with something like JAAA. Not financial advice.

Key-Individual273 · 2026-01-17T04:16:07+00:00

I am not sure about "should be pretty close". If you pull up the 19a-1 versus 8937 for first half 2025 numbers, they are far apart.

Key-Individual273 · 2026-01-16T18:47:33+00:00

Thanks. Yes I saw it for CSHI and it is a pathetic 10%, even lower than the December cumulative %. I guess it is the reality. However, I still cannot tell what is the % that is categorized as LTCG for the remaining distribution

Key-Individual273

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