As of writing QYLD dropped to ~16 dollars per share and inflation is rising. Some commentators pointed out that there are scarse mechanisms for it to rebound back, so it is basically a depreciating asset, unless the managers change the fund's strategy.
The Compound Annual Growth Rate of the S&P 500 since 1871 is 7.14%, if adjusted for inflation, and 11.00% if not. If considering ever since 1950, we would have 9.46% adjusted for inflation, and 11.76% without accounting for it. This to me signifies the best performance you can get with any ETF in the longest timespan, and any decrease in risk will detract from these values.
If you simply follow the 4% rule on the S&P 400, you would have an investment that at the very least is unlikely to eat away the principal, and might incur in profits if you are in a bull run. If 4% is our minimum and 7 to 9% is our maximum, it would stand to reason that the best a covered call ETF focused on income could ever do would be to yield more than 4 and less than 9 percent in dividends per year while still maintaining its principal, basically sacrificing future growth for present income.
Question is: is there any ETF that yields more than 4% in inflation adjusted income per year while still maintaining its principal intact?
Submitted September 05, 2022 at 12:39AM by Redvolition https://ift.tt/rpCSHx9
