Anybody Buying Yet? Where’s the Bottom?

[SAJ-99]

Thanks for your response. I did read the prospectus, before posting. It seems the option trading limits the upside (obviously) and little protection on the downside. They are also able to harvest losses which get returned as a return of capital reducing the basis in the asset.

I think that that you are probably write about investing in QQQ instead. But....

The option trading of the QQQI necessarily generates sales when the stocks are gaining whereas selling QQQ when I need income is random and my needs might occur at a bad time to sell. Perhaps sell 1% of the QQQ holding at regular monthly intervals would be a better strategy? OR perhaps harvesting any gain above 1% when and if it occurs. That would allow me to harvest all the gains and maintain the asset value at a consistent value other than dips.

I don't know. I have been accumulating/growing retirement assets my whole life without ever thinking of a strategy of how to actually liquidate the assets as needed for retirement, and going all into a "safe" bond or dividend investment is hard for me to swallow.

Couple of things. I get the attraction to these products. Dividends are enticing. However I generally don’t like buy-write strategies because they are expensive and underperform the index. It’s just the nature of stocks that returns are either great or horrible. It’s unusual for them to be around the average. Cutting off upside shows to be a bad idea from a mathematical standpoint.

Second, a lot depends on the type of account it is held in because of the tax treatment. 401k- doesn’t matter because it will be all income on your taxes, Roth- doesn’t matter because it will never be claimed as income on the taxes. Keep that in mind for the harvest-of-capital-losses part. In a taxable account it matters and you want the lower tax treatment of gains rather than income.

This question is why people pay advisors. But if you own enough shares, you can write your own options. I think the intent is you want upside and income but don’t want risk, and that isn’t possible. But a portfolio 100% in a buy-write still isn’t prudent. I can get better upside and same income from a something like a 60/40 mix in equity/fixed income.

There are other buy-write strategies. QQA for Nasdaq (cheaper), JEPI is the largest and most well know, but S&P.

There are some FAs on here that might have other insights and even real world experience with these things.

 

[Goatshoes]

This question is why people pay advisors. But if you own enough shares, you can write your own options. I think the intent is you want upside and income but don’t want risk, and that isn’t possible. But a portfolio 100% in a buy-write still isn’t prudent. I can get better upside and same income from a something like a 60/40 mix in equity/fixed income.

I think that risk is just part of the package. I don't think that I can achieve the long-term gains without taking the risk/volatility in the interim. But you are right that after I quit working, I will become more risk adverse. I need to develop a strategy that will allow me to weather the volatility. At this point in my life, I can handle a 30% loss as I know I have or can extend my horizon to recover. But once I quit working, not so much.

 

[SAJ-99]

I think that risk is just part of the package. I don't think that I can achieve the long-term gains without taking the risk/volatility in the interim. But you are right that after I quit working, I will become more risk adverse. I need to develop a strategy that will allow me to weather the volatility. At this point in my life, I can handle a 30% loss as I know I have or can extend my horizon to recover. But once I quit working, not so much.

I did some work from the inception day of QQQI (Feb 2024) and compared to QQQ. The difference in nominal cash received of dividends vs selling 1 share of QQQ was basically the same. Like I thought, the difference is more in the tax impact and I don’t know how much of the QQQI dividend is return of capital, so I have to make a bunch of assumptions which may not be correct. I also saw that the April drawdown was about the same, -21% vs -22% for QQQ, so I’m not sure it is “safer”. As I mentioned, risk should be managed by allocations to risk free or lower risk assets like bonds and the equity.
Enjoy retirement.

 

[Goatshoes]

Thanks. I will continue to research strategies to maximize my returns while also drawing my needs in retirement, safely.

 

[JAG]

I've been researching the benefits of nuclear energy since the recent executive order requiring the NRC to relax permitting of reactor builds, especially in the SMR niche. Power grid demands are surging with data center construction and are set to continue with an acute interest in cheap energy.

Nuclear SMR construction has a steep front-end cost, but a very appealing renewable, long-term benefit that outweighs nonrenewables like wind and solar. Especially appealing are certain SMR's that reuse spent fuel (OKLO) as opposed to storage of waste in underground vaults.

I hate subsidies that create dependence and malaise. However, I like subsidies that alleviate front-end investment costs to incentivize R&D and long-term growth. Elon shared this view until he didn't, lol.

As such, I'd like to see the current or future administration use this feature of subsidies for nuclear energy in the short term, with a planned retreat as plant installations mature.

 

[Bonasababy]

I've been researching the benefits of nuclear energy since the recent executive order requiring the NRC to relax permitting of reactor builds, especially in the SMR niche. Power grid demands are surging with data center construction and are set to continue with an acute interest in cheap energy.

Nuclear SMR construction has a steep front-end cost, but a very appealing renewable, long-term benefit that outweighs nonrenewables like wind and solar. Especially appealing are certain SMR's that reuse spent fuel (OKLO) as opposed to storage of waste in underground vaults.

I hate subsidies that create dependence and malaise. However, I like subsidies that alleviate front-end investment costs to incentivize R&D and long-term growth. Elon shared this view until he didn't, lol.

As such, I'd like to see the current or future administration use this feature of subsidies for nuclear energy in the short term, with a planned retreat as plant installations mature.

What about the elephant in the room? Can we bury the waste in Mike Lee's backyard?

 

[JAG]

What about the elephant in the room? Can we bury the waste in Mike Lee's backyard?

If oklo builds the SMRs, there won't be any waste to bury.

Plus, I'm thankful we can bask in the pleasure of his return to Utah with his tail between his legs.

 

[Forkyfinder]

I've been researching the benefits of nuclear energy since the recent executive order requiring the NRC to relax permitting of reactor builds, especially in the SMR niche. Power grid demands are surging with data center construction and are set to continue with an acute interest in cheap energy.

Nuclear SMR construction has a steep front-end cost, but a very appealing renewable, long-term benefit that outweighs nonrenewables like wind and solar. Especially appealing are certain SMR's that reuse spent fuel (OKLO) as opposed to storage of waste in underground vaults.

I hate subsidies that create dependence and malaise. However, I like subsidies that alleviate front-end investment costs to incentivize R&D and long-term growth. Elon shared this view until he didn't, lol.

As such, I'd like to see the current or future administration use this feature of subsidies for nuclear energy in the short term, with a planned retreat as plant installations mature.

Theres nothing as permanent as government subsidies. Ask renewables, agriculture, or the fossil fuel industry.