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Like we said. In Europe we can’t have nice things… PBDC and PFFA and CLOZ are not in Europe. JEPQ is LSE and is available (fortunately)
Well than JEPQ is your best choice of the 3. can you get PBDC9% yield, PFFA 8%, or CLOZ 8%. These 3 plus JEPQ would get you to your income goal and leave you with
No emergency fund. Take out margin against your assets if you need the cash Plenty of places to earn good interest like CLOZ, JAAA, etc
Even if you were the worst investor in history and always lump summed the day before a downtown, you’d still be so much further ahead. With inflation, you have to think of your SPAXX as losing whether there is a downturn or not. You do you of course, but since you asked for advice. There is even a happy medium here. There are conservative dividend funds and closed end funds like JAAA or CLOZ that can earn you 6-9% with little volatility
Many low beta stocks or funds are Dividend stocks. So you could get: * Low beta * Low volatility. * and income At the same time without adding bonds cash in money market funds. you can get consistent dividend yields of 6 to 10% Which is better yield than banks money market or government bonds. And you can use the dividend to either increase your dividend over time by reinvesting it bank into the fund or stock. Or you could invest the dividend into more growth index funds. UTF 7% yield and UTG 6.3% yield are both good utility funds. Regulated stable companes. JAAA 6% yield and CLOZ 8%. These in collateral loan obligations JAAA invests In AAA rated loans and CLOZ invests in BBB rated loans. These loans are back by hard assets so it the company can't make its loan payment the assets can be sold to pay the investors. EIC 11% yield is a similar fund but it invests in CCC rated CLOs. Dividends are payed out generally quarterly or monthly. and it is not uncommon for dividend funds to pay out there dividend even if the stock price falls in a market crash.
You can move the account to a brokerage without insuring taxes. I use fidelity. All you have to do is contact them provide them with he account number for the american express account number and fill outcome forms and they will mov the acount to fidelity. >I guess I realize I lost money by not putting it in stocks and by inflation. I just don't know what to do. IT is important to realize your fear of risk is is not based on your experience with your investments but your fear of not knowing what will happen. In most cases the fear is a lot larger than actual risk. In my IRA I have a bond fundFAGIX that ear a steady 5% yield but I also have JAAA 6%yield, CLOZ 8%, UTG6.3%, UTF 7%, PFFA 8%. All of these investments produce cash payments into your account regardless of what the share price will do.The share pirice may go down but the cash will still be deposited quarterly. Generally people like you do better with these investments. Now you can add up to 7000 a year into an individual IRA. I strongly suggest you do this every month. Over time as you get more failure with these funds your fear will drop. Some higher yields can be achieved with slightly more risk with funds like PBDC 9% yield, SPYI 11%. And you could put some money in VT. All of these do hold stocks. Start out small first and gradually increase the ammount. in them.
there are always people saying don't invest for X reason or invest for Y reason. Ignore all that and focus on understanding the investment your advisor is recommending read the prospectus for any funds an in general learn how to evaluate your investments. Your advisor can probably guid you or recommend classes or books to read to help you learn. Right now this is all new to you so I would ignore the news and focus on learning about dividend and growth investing and and evaluating 12K a month you are going to owe taxes on that. So keep that in mind and make sure you have have a tax advisor. But that said what i would do is invest the money in low risk dividend stocks. Such as JAAA 6%, UTG 6.3%, UTF 7%, CLOZ 8%, PFFA 8%. Eventually the money your are getting now will run out. When it does you want something to fall back on. All these funds generate cash dividends.
Stable dividend funds like JAAA, CLOZ, MAIN, etc. these are stable and will pay you monthly
If you are so sure in a 10% reduction, why not buy puts? Anyway, if you are willing to take on even the slightest amount of risk, something like $CLOZ or $STRD will vastly outperform T-bills
Beware this sub is extremely risk-sensitive and will suggest you to keep $40k in a HYSA just in case you have an emergency car purchase at 2AM Christmas morning that cannot wait I also keep \~99.9% of my money invested, so yes, you can do this. I don't even have a savings account; money goes from checking straight into my brokerage and I make a conscious effort to keep my checking very low I think a few thousand is fine but I see no reason to keep $5k+ in checking/savings. I know my checking account could go negative and a margin loan created if I ever needed to, but in 10+ years this situation has never occurred I would also consider investment vehicles that are a higher return than a HYSA but lower volatility than SPY as your "emergency fund"; this could be $CLOZ, $STRD or similar
JAAA, and CLOZ if you prefer.
So what if you put your money into something like CLOZ, which gets you a \*pretty\* stable NAV and 9% per year? Would you be as anxious to get into the S&P quickly, or would you be more likely to wait for a dip?
> defensive core against market crash Your defense against market crashes is the fact that you have 30-40 years. The market can (and will) crash over and over and over; it's not a big deal. Forget UTES, XAR, QTUM, and FTWU. > I have CLOZ/CLOX/FSCO/OUNZ as purely a safety net of capital preservation Also totally unnecessary. If this is for 30-40 years from now there's zero need to worry about capital preservation. Time is your friend.
Appreciate the details about the default rates and risk. I was missing that. >What I have been doing is a money market for for Cash A mix of high yield stock dividend funds and loan obligations with a goal of about 10 separate funds. Like a mixture of VMFXX, SPYI/JEPI, and JAAA/CLOZ? Here is my updated scenario based on your info: name | old | new | change ----|---|---|------ SGOV | 50K | 40K | FLOT | 30K | 0K | dropped, underestimated JAAA's stability JAAA | 20K | 40K | CLOI | 20K | 0K | dropped, redundant JBBB | 10K | 0K | dropped, redundant CLOZ | 10K | 20K | SPYI | 0K | 40K | replaces some CLOs, tax efficient vs. JEPI/Q total | 140K | 140K | still 100K in fixed, now 40K in high-div. volatile stocks yield | 5.3% | 7.5% |
Reasonable goal so 100K in money market fund or several bond funds. >The remaining 140K will be in fixed income assets, of which 40K (JBBB,CLOZ, CLOI) will pay the highest rate but could default and I could theoretically permanently lose that 40K Also reasonable but I think your risk estimate is overly high. Of all the junk bonds issues in a year (mainly from JBBB) only 4% actually go into default. A good fund manager would know this and would either avoid companes in poor financial condition or have or have bonds from 100 or more companies so that a 4% default rate would mean only 96% of the bonds would pay out as expected. So the loss of 40K is highly unlikely. Worst case the dividend might be reduced slightly in a bad year. Also some funds only invest in senior loan obligations. So if a company goes bankrupt the senior loans would have priority to be payed off by the assets the company has less. So again you are not going to loose all your money. So the risk from CLOA and CLOI might be lower than your think Also having 3 high yield funds reduces the risk significantly. Index funds are good thing to have in a bad economy since they can be sold for cash. But Keep in mind the in a bear market you hav sequence of return risks which can be significant. What I have been doing is a money market for for Cash A mix of high yield stock dividend funds and loan obligations with a goal of about 10 separate funds. With an overall yield of about 8% with enough income from these funds that they would cover my my living expenses if needed. Then Stock index funds for a long term asset I can sell.if needed. So in my case I have a lot more money in high yield funds since I want enough income to cover living expenses. With a smaller ammount in cash and index funds.
Forgot to mention that I plan to gradually move the JBBB, CLOZ, and CLOI (40K total) into VOO. That's the "play" money. For now, I want to keep them somewhere with better yields than SGOV. I know you're not supposed to time the market but I want to have that 40K in hand in case the market tanks later this year due to tariffs, inflation, job losses, or Elon Musk sniffing a bad batch of ketamine. It's fine if I'm wrong and miss out on larger gains. Personally I'd rather risk having smaller gains if it means having a chance to buy at a big discount. Basically, 100K will remain in what I assume are reasonably safe options: SGOV, FLOT, and JAAA. I have both FLOT and JAAA in the mix because they are built differently and presumably would behave differently under a stress. A further "diversification", if you will. The other 40K in cash, which I would not need to withdraw immediately and could wait longer for their prices to bounce back, would remain in these higher-yield places and eventually invested into VOO when there is a dip or bear. TLDR: If I wasn't so greedy I'd just store the "need ASAP" money into SGOV and the rest into stock ETFs, but I *want* to time the market and I want to keep the standby cash into a higher yield place the risk of which is reasonably managed.
The goal is to balance between maximum yield, reduced volatility, and liquidity, so I will likely have access to 100K at any given time without having to sell the stocks. 60K will be in stocks. I won't touch them because there might be a bear market in a few years, who knows. The remaining 140K will be in fixed income assets, of which 40K (JBBB and CLOZ) will pay the highest rate but could default and I could theoretically permanently lose that 40K, leaving me with 100K. I suppose the JAAA and FLOT could also TEMPORARILY lose value but I believe they do not lose value drastically and they recover much faster, which is why I have this "ladder" of safety and risk. Is there a flaw in this logic? I don't want long duration bonds like BND because of how they got decimated in 2022. I cannot rule out another rate hike soon if we have a high inflation so I don't want long term treasuries, but I'm also too greedy to put everything in the "low yield" SGOV. I should also mention that I have taken into account the fact that SGOV is state tax exempt while the others are not. I've also looked up CDs but they seem to pay a lower rate and I'm not a fan of locking up the funds. But I'm open to suggestions.
I think this is overly complicated and don't understand the logic with so many funds. I would put the $100k in SGOV and be done with that portion. Next, for the $100k remaining, decide what your goals and risk tolerance are. For me, I would just put 100% in VOO and be done. If you want the equity portion to be more conservative, do a mix of VOO & JBBB/CLOZ
They're charging fees to create this. You would likely be better off on a risk adjusted basis just buying preferred shares or mezzanine CLO Debt like CLOZ or CLOB and avoid all the added complexity they unnecessarily create and charge you for
CLO stands for Collateralized Loan Obligation. It’s essentially a type of debt that has some type of collateral against it. Specifically business loans. AAA and BBB are rankings of the loans, based on credit worthiness of the borrower. AAA is the safest rating, then AA, then A, then BBB, then BB. The lower safety it is, the higher the interest rate charged to the borrower. Companies have packaged these loans into ETFs like JAAA, JBBB, ICLO, CLOZ, etc. Like with the interests rates on the loans, the safer ratings yield smaller amounts while riskier ratings yield larger amounts. Safer ratings also see more stable prices while riskier ratings may see more price movement. JAAA and ICLO are currently yielding a little over 6%. JBBB and CLOZ are currently yielding 8% and 8.5% respectively. I categorize these this way: HYSA is extremely safe with no chance of losing money but pays the smallest yield. Good for essential emergency funds I may need access to at any time / less than 48 hours. AAA CLO ETFs are very safe, may see minimal price movements, but yield more than an HYSA. Good for extended savings (like a house down payment or a vacation fund) and emergency fund amounts that I won’t need immediately since it may take a bit of time to sell and transfer them to a bank to become usable (so 1 month of transfer time in the worst case scenario). BBB CLO ETFs are somewhat safe. They could see more price movement but yield more than the AAA CLOs. Best for cash you won’t need for a while as you may need to wait for price recovery before selling. Basically the “last resort” portion of your emergency fund. These also make a decent conservative investment option when rates are high - an 8% return is nothing to sneeze at.
SGOV JAAA JBBB CLOZ SVWXX all variations to keep liquid is valid in current stream,volatility,government etc.
Thanks for your response. It is appreciated. I currently hold JBBB and CLOZ.
At this time, we are in the very early stages of a credit downturn - I have exposure to CLOs (JAAA, CLOZ) and Mortgage REITS (MORT) etfs, and both have been hit and will continue to underperform (? relative to what ?), but the interest/dividends maybe (?) ok JAAA is the senior tranche and so I am playing this out - there are two threats here. One is recent European regulations, and the other is tariffs related bankruptcies and loan related credit events. CLOZ is a junior tranche. MORT is backed by mortgage loans for REITS and has also been hit hard - it has never even moved the trend up back to pandemic highs. If your risk horizon is greater than 5+ years, 10+ is even better - then you would have gotten back our capital plus more - do not reinvest dividends. I am using in-lieu of long-term care so this "bucket" will be available then
AAA CLO ETFs invest in only the AAA tranches of CLOs. Funds such as CLOZ or CLOB also invest in non investment grade CLO tranches, which are more risky, but they will have higher returns to compensate for the extra risk
Some prominent examples include the Panagram BBB-B CLO ETF (CLOZ), the VanEck CLO ETF (CLOI), and the BlackRock AAA CLO ETF (CLOA). Other options include the PGIM AAA CLO ETF (PAAA), the Invesco AAA CLO Floating Rate Note ETF (ICLO) and the AXS First Priority CLO Bond ETF (AAA).
I cashed out in late November. My intent was to pile into GLD, CLOZ and EUAD until we found something near a bottom. Sat on my hands with GLD, and now I think it’s too frothy. So, I think I’m going to sell Jade Lizards on a few equities and, if I get assigned, sell strangles out of them. I really would be feeling better if I would have went into GLD when I thought about it.
What's the deal with CLOZ? 7% yield? Is it risky? Any catch? It looks too good to be true but if it is true I want in. :-)
Like the supplements to EUAD! Yeah, EUAD and CLOZ are the only things I’m putting new money into at the moment.
I did similar. 2 weeks after the election, I sold everything that wasn’t hedged and sat in cash. I’ve been adding CLOZ and EUAD shares recently so that I’m not just cash - but I’m definitely trying to figure out when a good time to rotate back in will be. I have a spreadsheet that tracks my avoided loss by getting out, lol. I hate making myself feel better about sitting on the sidelines while a bunch of people are watching their IRA’s implode, though. It’s a tough to reconcile morally.
I see an increase in the potential for stagflation. The stagflation risk seems more real to me. I am speaking only to the risk. I am not saying that I believe it will happen. I think the general business environment is quite challenging. Inflation persists, consumer confidence is down, unemployment is likely to increase, fiscal policy is unreliable, long term rates are high, short term rates are unlikely to decline anytime soon. And the housing market, which has a tremendous multiplier effect on the economy, is weak and in decline. I am taking profits from my “fun money” and rolling that into CTA (managed futures). I will continue selling out fun money positions and grow my CTA position. I’m sticking with my other positions, including BDCs and CLO ETFs (CLOZ, JAAA). No panic. Acting with intent. I’m retired, I want protection against a big drawdown.
I'm retired, so I want to avoid a significant drawdown. I like a "managed futures" holding, CTA. I hold CLO ETFs, such as JAAA and CLOZ (there are plenty of others). Also, I like BDCs. I keep a basket of BDC holdings, anchored by MAIN. I consider SPHQ and FDVV as my "core" holdings. I'm building those as I exit individual equities. Basically, I've trimmed my "fun money". I'll continue to use the "fun money" without regard to possible recession, stagflation, and/or bear market.
Some conservative investments: You might consider a "managed futures" ETF. I have a position in CTA and I am quite pleased with it. I like BDCs. I have a basket of BDC holdings. The ETF PBDC is an easy way to take a BDC position. CLO ETFs also work for me. I like CLOZ and JAAA, I have much more in CLOZ than JAAA. Regarding individual equities, I'm pleased with LRN. I think it's a pretty conservative holding. UBER has a strong outlook. I bought in completely below $80 though. AMZN and TSMC have already been mentioned.
I can’t get with the “all-or-nothing” thinking. Thinking like that and acting accordingly is nothing but trouble in life, including investing. Selling everything, all at once, I can’t support that. I am shifting to less risk, for me it’s a process. I’m carefully selecting positions to reduce holdings, and sliding those funds into safer investments. I evaluate each holding. For example, I reduced my SPHQ position, because I believe that it will see a large drawdown in a general market correction. On the other hand, I believe that NVDA is a great company, and that investing in AI is an opportunity of a lifetime for me. I’m not selling any NVDA. I like CLO ETFs, I chose JAAA and CLOZ. I also like “managed futures” funds, in particular CTA. I didn’t know about ICSH, that looks interesting. I can’t see how “I’m selling everything” could be an optimal solution to a riskier market environment.
your comparison off your comparing Bank Loans to Equity CLO's you need to be using DEBT Clo's like PAAA or CLOZ or JAAA or JBBB to BKLN and SRLN(or FLRT or FLBL)
i would suggest you put this to CLOZ or JEPQ. At least they have the yield higher than the interest rate. But again… monthly repayment is mostly for the principal, NOT the interest. That’s why I only get loan from my broker. I only need pay the interest :)
CLOZ return rate looks pretty solid
As an alternative, I suggest that you research JAAA, JBBB, and CLOZ. I hold JBBB and CLOZ. JAAA is lower risk and hence lower return.
Big shift, in my view. Fundamental positioning by the Fed towards anti-inflationary policy. At most a 0.5% reduction in rates across all of 2025. Long term Treasuries at 4.5%. And I expect that to hold for some time. I cleared completely out of REITs. Took Utilities profits and a lot of dividend ETF profits. Loaded up on CLOZ, JBBB, and bought more MAIN. Bad news for small cap and mid cap.
9% pretty safely with CLOZ, and then you don't feel compelled to throw all of it in at once. Market is high right now, everyone predicting 10% next year with 3% per year average over the next decade (meaning they think a crash is coming at some point). Or you can just make 9% and chill. 16% with SVOL. Go wild.
They are lower risk, lower yield CLO portfolios compared to CLOZ. I chose CLOZ because it had the best total return at the time I researched.
CLOZ looks like a decent debt security, thoughts?
You could put it into a CLO CLOZ offers a 8.5% yield and it basically moves right to up on a chart. JAAA is also a good one. Not financial advice but smth to look into
OXLC and ECC are CEFs that use leverage on top of CLOs. There are now CLO ETFs, which may not be mentioned in income factory. JAAA, JBBB, CLOI and CLOZ. Without the leverage the pure CLO ETFs are less volatile than the CEFs and also Senior loan ETFs like BKLN and SRLN,
I’ve been looking at CLOZ with intrigue. It’s an ETF that seems to preserve capital and provide an 8% dividend.
I'm going to ignore tax implications because I have no idea how an ESOP rollover works. But beyond that your goals are a bit incompatible. You said "small risk", but you're looking for something that returns 12-18% annually but are compressing your time horizon to not deal with any real intra-year risks. It's certainly possible the S&P 500 will go up 2-3% in the next 60 days, but it's also possible it will drop 5%. Is that a "small risk" in your mind or not? If you want something that's more than a HYSA/MM that might at least in theory be safer, you could look for bond funds that pay monthly dividends on higher risk bonds. Personally, I've put some money in CLOZ recently for this purpose, but even that is only a 9% yield.
You could look at corporate loans. There is a product called a CLO that aggregates hundreds of corporate loans. I personally like CLOA for AAA relaunches and CLOZ for BBB traunches.