"Spot on analysis! People treat a 12%+ distribution yield like it's a free lunch, completely ignoring the upside cap. In a roaring bull market, you are basically trading away your long-term capital compounding just to collect your own money back as 'income'.
Total return over headline yield every single time!That said, to me, covered call ETFs are a legitimate way to build financial freedom, but these financial products have a very specific usage within your portfolio.
Sometimes it really is about cashflow over ultimate paper gains—you just have to use them strategically rather than blindly."
"Spot on analysis! People treat a 12%+ distribution yield like it's a free lunch, completely ignoring the upside cap. In a roaring bull market, you are basically trading away your long-term capital compounding just to collect your own money back as 'income'.
Total return over headline yield every single time!That said, to me, covered call ETFs are a legitimate way to build financial freedom, but these financial products have a very specific usage within your portfolio.
Sometimes it really is about cashflow over ultimate paper gains—you just have to use them strategically rather than blindly."