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A custodial account in my makes sense to me. You control the acount until you transfer it to your grandson. I would invest in a mix of dividend funds and growth. That way when he get it it will produce some income he can use immendiently if needed. And the growth would be a good long term way to save money with low tax. For growth you could use funds lit VTI and VSUS. For dividneds you could use funds like SPYI 11% yield , PFFA 8% yield, and CLOZ 8% yield. SPYI is a tx efficient fund PFFA is reliable source of coperate dividned income. CLOZ is a very stable fund with an with a really good divined.
it is a resky way to make money. If you pay close attention to your portfolio it can work. But most people don't want to focus that much time on it. In the end it is just a way to make money. There are funds that use covered calls (a type of option) on the S&P500 and pay a dividend. SpYI is one and it has a yearly yield of 11%with monthly payouts. QQQI cells covered calls on the Nasdaq 100 index (QQQ). It has a yield of 13%. So 100K in QQQI will generate 1K of income a month. Covered calls cap the growth of the index by converting growth into dividends. If you don't want to use 0ptions there are many dividned funds with good yields. ARDC, EMO, and PBDC all have a yield of 9% PFFa and CLOZ have a yield of 8%. Buy inviting in these and some covered call funds I now have a monthly income of 5K a month from simply holding the stock of these funds. I don't closely monitor them. I treat them just like growth index [funds.Buy](http://funds.Buy),hold , ignore.
The problem with the stock market prices of shares can move up and downunprdicatably. So if you need the money in 9 months you won't know how much money you will have in 9 months. You could have 180K or less or 220K or more in 9 months. But let's assume that you don't spend the at money on a new house to see what could be done. I you invested 200K in QQQI an income fund with a lileld of 13%. 200K in this fund will produce 2K a month of extra income. And do to it ROC tax classification on most of its dividends you would pay no tax on that income for about 6 years. Income that could cover much or all of your rent. Now it is possible to get higher yields but those are less stable so for this I wouldn't recomend anything higher than QQQI. Now there are other funds with yields between 10% and 5% yields but most don' have the tax classification of QQQI. So the extra income will be taxeded as regular incom. Which would be the same as 2000 a month raise in you pay. Some examples of lower yielding funds are ARDC 9%, EMO 9%, PBDC9%, PFFA 8%, CLOZ 8%, UTF 7%, UTG 6%.
I would gradually sell it off and reinvest it. yOU could reinvest some in JAAA 6% yield,9%.CLOZ 8% yield these are veritable reliable dividend payers, Keep each at 50K invested. Then add 50K in UTF 7% UTG 6%, PFFA 8%, PBDC9%, EMO 9%, ARDC. These funds produce income you could use to pay utility bills rent, mortgage. roth deposits or simply be reinvested in these funds. If you sick or injured injured or become unemployed for an extended period of time you can use the income to cover expenses until you can return to work. Or you could invest in growth index funds. If you have a big unexpected expense you can sell the growth shares you could get enough money to cover the expense.
I would put it in QQQI the high yield from this fund will generate about 1K of income a month. You can use this income to help cover living expense or used to make deposits into your Roth IRA. Or you could add more money to QQQI to get even more income. I did this and added more funds like SPYI, EIC, ARDC, EMO, PBDC, PFFA, CLOZ, UTG, JAAA. Today I have 5K a month of income from these investments.
I would go with CLOZ 8% and FXAIX (45% in each and 10% span. FXAIX is a fidelity S&P500 fund with a lower share price. CLOZ is a dividend fund. The dividend can be placed in with your cash Don't use dividend reinvesting. I believe SPAXX is a money market fund which is were the cash would be. Eventually the dividends will be enough to continuously refill your money market account. And if you want you can move the dividend out of the money market account to FXAIX or CLOZ.
Any dividned ETF with a yield of 1% that pays monthly well generate JAAA 6% yield will pay $60per year in $5 monthly installments. And you don't have to sell shares to get the money. It is simply deposited into your brokerage account. CLOZ 8% yield $6.6 per month. QQQI will generate $10.8 per month.
Your at a point were you need torethink how you invest. You can keep in vin sting in growth index fund (all the fund you listed ar growth index funds. I would suggest investing you money in the taxable account into dividned ETF. Dividends are cash profit sharing payments to you. For example you could put money in your taxable brokerage account into CLOZ with a 8% dividend yield. 100K invested in that fund will generate all the money you need for your roth deposits. Or you could use the money to pay bills and other expense. You can get yield from 1% to 10% with about as much risk as your growth index funds. CLOZ actually has less risk than growth index funds, I have fund these dividend funds in my taxable account EIC 11%, PFLT 12%, ARDC 9%, EMO 9%. PBDC 9%, PFFA 8%, CLOZ 8%, UTF 7%, UTG 6.3%, JAAA 6%
buy age 60 most people become risk avers. So if you put him in VT and the market crashes he will likely sell VT at a loss. it happens all the time. Good bond funds are really a better investment for people 60 or older. government bonds are more stable plus they produce income which is what older people really want. As long as the income keeps coming in they will be hesitant to sell. But don't just rely on government bonds. there are some good cooperate bond funds and CLO funds you could add to. I currently like JAAA 6% and CLOZ 8% yield. Very reliable dividend payers.
I see two basic mistakes people are making. >Completely ingnoring dividend investments and just investing just in growth. >Focusing only on retirment and investing taxable brokerage account that can help them cover living expenses now rather than later. Dividend play an important part in the overall market. And ignoring basically leaves potential earnings out of your investments. Growth can make you rich really fast but It can vanish just as fast without you doing anything. Dividend income is much more stable an can allow your Roth or 401K add more shares of stock while you are unemployed and the market is down with minimal or no growth. Also with all the focus on retirment many ignore the advantages of taxable brokerage account. Today many only only have money market accounts (that are basically HYSA) in a taxable brokerage. Frequently you see people post they yield of the money market account or HYSA is dropping and they are looking for a higher yield. And often the ammount of money list is well over the 6 month emergency savings recommendation. Most of these I got a higher heat at X brokerage or invest in SGOV. funds like JAAA 6%yield and CLOZ 8% yield are both very low risk funds that easily earn more than HYSA and money market funds. And there are some really good dividend funds with yield in the 9% range. In my opinion once you reach the 6 month emergency fund level you should invest for divines to slowly convert your emergency reserve to a dividend passive income fund. Keep the emergency reserve but add enough passive income from bonds and dividend fund to generate enough cash for your yearly roth deposit or use the passive income for you monthly bills. Passive income from bonds or dividends never runs out it is continuous income. The 6 month emergency fund only last 6 months.
At this point in like you should have about half of your IRA invest in bond or dividend funds that produce passive income to cover your bills. You want enough passive income to cover about 1.3 times your yearly living expenses. IF you don't spend all of it in a year reinvest the excess. Bond are nice and safe but the yield is low so you might be short on income if you just use government bonds. With dividend income from dividend ETF the yield is higher and you should be able to get the income you need. If you invest in finds like JAAA 6% yield, CLOZ 8%, PFFA 8%, PBDC 9% EMO 9%, you should be able to create a portfolio with an average yield of about 7% to generate 56K a year of income. As long as you are working you can reinvest the income to grow your portfolio even more. You might want to read the book The income factory and look at armchair income on youtube for additional fund ideas.
What are you taxes on the HYSA now assuming it has the ammount you want to invest? It isn't likel that much money. For HYSA you are now getting about 4% yield and it is likely dropping. You could open a taxable brokerage account and put your money in a dividend fund like CLOZ you would get 8% yield payed monthly with can be reinvested in the fund or spent. You can make adjustment with your work tax withholding to account for the extra income. if you slowly build up the money in the fund it will eventually produce enough to start covering some of your bills. And eventually it could cover all of your living expense. If you don't like CLOZ you can use QQQI 13% yield, SPYI 11%, EMO 9%, PBDC 9%, PFFA 8%, UTF 7%, JAAA 6%.
If you want to retire before age 60 you need to have taxable account to provide you with income until age 60. So this typically means people have a taxable account and retirement account. And sometimes just a taxable account. Now in a taxable acount the tax is generated by dividends, and capital gains from the sale of stock. Often dividends is what people worry about the most because that is taxed on the year it is received. Capital gains taxes mainly occur when you sell share with likely won't happen until you retire. Now an easy way to avoid dividend taxes is to use an ETF with a very low dividend. Growth index funds typically pay a dividend of 1%. So the dividend income on 1 million in invested is only about 10K. Since growth index funds average a total return of about 10% a year most people invest in these funds and then sell off about 4% a year for income when retired. At a 4% liquidation rate the income should last 30 years. 30 years is fine if you retire at age 60. You likely will die in 30 years. But if you retire at age 40 you need income for about 50 years. Which teams a withdrawal rate of 3% or less. Which also means you need to save a lot more money. These is another way to FIRE that doesn't involve liquidating stock for income. Invest for dividends. Using dividend ETF. You can easily get a dividendyeild between 5 and 10%. And dividned income doesn't involve selling shares. So if you save up 1.5 million and invest in a portfolio yielding 7% your after tax income would likely be around 80K a year. So you could focus on taxable account and build up a dividend portfolio using funds Like QQQI 13% yield, Spy 11% yield, PBDC 9%, EMO 8%, PFFA 8%, CLOZ 8%, JAAA 6%, and UTF 7%. you can do it . Now you likely would have to make quarterly 5K estimated tax payments to the IRS. But despite that you still have enough income for retirment. And if you take 7000 of that dividend income you could put that in a Roth to build up more tax free income. you can use after 60.
Most of your investment are growth funds. meaning 99% of your earnings comes from share price increase. There are fund that invest in companies with little to no growth but they produce a profit sharing cash payment to you about once per month or quarterly. So when the market crashed these stocks still (of at least most of them) still pay a dividned. You can get dividends from 1% yield to 100%. but for what the best rang is about 1% to 8%. Some of the safest don't even invest in companes. Bond (corporate and government), and Collateral loan obligations are some of the best. Some of these that I will probably be adding to my portfolio are JAAA 6% yield, UTG 6.3%, UTF 7%, CLOZ 8%, PFFA 8%, Inane bear market dividend producing assets do better than growth assets. In a bull market growth does better than dividends. Since about 1/2 the time the market in a bull or bear condition it only makes sense to have a protfolio that is a mix of dividend and growth.
Crash resistant fund are generally dividned funds that in vest in very stable assets. These funds will go up and down in share price with the market but even in a sever crash like in 2008 they likely will continue to pay a dividend. Some of the best ones I know of are JAAA 6%, UTG 6.3%, UTF 7% CLOZ 8%, PFFA 8%,
You chasing returns and constantly checking your portfolio as a reasult. most growth index funds average about 10% a year. You could rediscover what your dad did. Dividend stocks. Is your dad constant checking the market and stressing about when the buy and sell? Likely the answer is no. For example you could invest in JAAA 6% yield ,UTF 7%, CLOZ 8%,PFFA 8%, without doing daily checks. Also with dividends stocks like these you they alway pay a very stable and predictable dividend. dividend cuts are rare with these funds. And you can boost the dividend to about 10% buy adding some higher higher yield funds PFLT 12% PBDC 9%, EMO 9%SPYI 11%, QQQI 13%. For dividends you buy and hold. With many of the funds I have list they deposit cash monthly into your account. Others deposit quarterly. Also many worry about market crashes with many of the lower yeild funds will continue to pay even when the market is down a lot. I ha30K of dividned income before Covid. The market crashed and 50% of the stock price disappeared quickly. But my dividned chacks came in on schedul and I still got 30K a year. And after covid the shoe price recovered with the market. Today I retired early at 55 and have 5K a month of dividend income from a taxable account that coves all of my living expense In Fact I routinely invest 1K back into the market. You can get this level of income with about 500K invested at a 10% yield. Just invest what you can monthly and reinvest the dividends. It will take time but you will get there. If you want you can start with the higher yielding funds first and then switch to the lower yielding funds. and your can use the dividends from a taxable account to fund your Roth or pay regular monthly bills. day trading and growth investing is like making bets a a football game and watching the gave.. Dividend is like watching plants grow. you wanch and occasional trim.
Moving assets to income producing securities should be done before you get to retirement to secure reduce your risk. BND is a good choice but there are many good choices. Funds like JAAA 6% yield, JBBB 7.8%, CLOZ 8%, UTF 7%, and UTG% 6.3%. All have higher yield than BND and other government bond funds and historically are very safe investments. less safe but still not terribly risky are PFFA 8% yield, PBDC 9%. But you also need to factor in your expected income needs. you need to have a good estimate of your income needs in retirement and then gradually work on configuring your portfolio to generate more than that income. IF your account generates more than you need and you reinvest the excess income you will never run out of money.
Most peop le keep money money market fund or HYSA. This is find with 6 months of cash but if you are unemployed at the start of recession you could be out of work for a year or more. At that point your emergency fund is gone Now what? At some point it is better to invest the money into dividend fund that will provide continuous income. Say you have an emergency fund that has grown to 100K. If investing in a HYSA account yielding 5% you get 5000 a year of income. But if invested in a fund with yield 10% you are getting 10,000 a year. pu that to 12% and you now get 1K a month of income Enough to cover basic needs. It is not unusual to see people with 300K in a HYSA. That could generate 30K a year, just under 3K a month of income. Now if you need money you don't need to liquidate the fund for money. You can set up a brokerage account so that all the dividend money will go into money market account. So you can have a 6 month emergency fund. And if the cash fund is large enough you can reinvest the money back into the dividend fund for more passive income. The passive income could be a bond fund or a safe CLO fund (JAAA 6%, and CLOZ 8%). Or it could be a higher yield fund like QQQI 13% yield is a good choice. In addition to its high yield it is also tax efficient. With a good dividend fund you could keep your emergency fund full and grow passive income Eventually you could build the dividend fund to produce enough inocme to produce enough income to cover all of your live expenses.
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.