WEBVTT - The Rise of the Quick-Buck ETF 0:00:05.519 --> 0:00:07.400 Bok No Trillions. I'm Joel Webber and. 0:00:07.400 --> 0:00:11.640 I'm Eric Balchunis. 0:00:12.160 --> 0:00:15.600 There is this headline that jumped out at me the 0:00:15.720 --> 0:00:19.120 moment I saw it. It was a big take from 0:00:19.360 --> 0:00:26.200 our colleagues Danizza Takova and Veldonajdrik. It describes something called 0:00:26.200 --> 0:00:29.440 a quick buck ETF and that immediately made me go, 0:00:29.720 --> 0:00:32.320 we got to talk to them and a character in 0:00:32.360 --> 0:00:35.479 the story, but you know, set the table for us. 0:00:35.520 --> 0:00:40.320 What is a quick buck ETF? According to Eric Baltunis, well. 0:00:40.640 --> 0:00:45.599 Look, over the years, there's been a sort of movement 0:00:46.000 --> 0:00:49.159 to launch kind of unusual products. So try to get 0:00:49.200 --> 0:00:51.800 very creative for the ETF industry. Why the core of 0:00:51.800 --> 0:00:54.280 the portfolio? A lot of people go to like cheap 0:00:54.280 --> 0:00:56.920 index funds and you can't really compete there. What are 0:00:56.920 --> 0:00:59.120 you gonna do? Launch like a two basis point SMP 0:00:59.240 --> 0:01:02.760 five hundred, hang Guard and Blackrock own the core. So 0:01:02.840 --> 0:01:04.520 what a lot of issuers are doing is trying to 0:01:04.520 --> 0:01:07.560 innovate their way to something different and new. Some are 0:01:07.560 --> 0:01:11.160 innovating on the buffer side to sort of ease worry 0:01:11.160 --> 0:01:14.280 for older investors, and some are innovating to try to 0:01:14.360 --> 0:01:17.080 appeal to younger investors and retail investors who may favor 0:01:17.120 --> 0:01:21.080 income over total returns or in some cases a lot 0:01:21.120 --> 0:01:24.479 of leverage. We call it packaged adrenaline. So on that front, 0:01:24.520 --> 0:01:26.640 we have this, you know, sort of phrase we call 0:01:26.720 --> 0:01:29.600 hot sauce, and we have there's like six different flavors 0:01:29.640 --> 0:01:32.040 of hot sauce, and one of them are these I 0:01:32.080 --> 0:01:34.120 call them yield boost that's the brand name of one 0:01:34.160 --> 0:01:37.760 of them. But the yield Boosters, this one firm went 0:01:37.800 --> 0:01:39.399 from like no money at the beginning of the year 0:01:39.440 --> 0:01:43.480 to like four billion, and every product has inflows and 0:01:43.520 --> 0:01:45.759 they just write call options barely out of the money, 0:01:45.800 --> 0:01:48.280 so you give up almost all your upside, but you 0:01:48.320 --> 0:01:51.520 get a giant fat yield. So some of them yield 0:01:51.560 --> 0:01:56.080 over one hundred percent. So it's just another example of 0:01:56.120 --> 0:01:59.000 how the ETF industry is a big tent serving many 0:01:59.040 --> 0:02:03.960 different people, and this is one sort of evolution in 0:02:04.000 --> 0:02:05.400 what I call the hot sauce bucket. 0:02:06.240 --> 0:02:08.360 We're going to be speaking with Denisa and Veldona, our 0:02:08.480 --> 0:02:11.640 cross asset reporters with Bloomberg News, as well as one 0:02:11.639 --> 0:02:14.360 of our sources, Todd Can. You can find him on 0:02:14.400 --> 0:02:22.480 YouTube at Unconventional Wealth Ideas, this time on trillions quick 0:02:22.520 --> 0:02:28.560 buck ETFs. Deniza Veldonna Todd, Welcome to Trillions. 0:02:29.000 --> 0:02:29.880 Thanks for having. 0:02:29.680 --> 0:02:31.880 Me, Thanks for having me, thanks for having us. 0:02:32.840 --> 0:02:35.520 Okay, Denise, I want to start with you. How did 0:02:35.560 --> 0:02:37.959 you spot what became this story? 0:02:39.120 --> 0:02:42.399 Well, we saw we look at Reddit, and we look 0:02:42.440 --> 0:02:45.440 at one of the firms, field Max, which Eric mentioned earlier, 0:02:45.919 --> 0:02:49.680 and he'd already had ten thousands readitors tweeting about it 0:02:49.720 --> 0:02:52.960 every day, talking about it every day. And then we 0:02:53.000 --> 0:02:57.040 looked at the inflows and the growth was incredible. Just 0:02:57.080 --> 0:02:59.800 to give you an example, their first CDs was just 0:03:00.040 --> 0:03:03.560 two years ago and this year they launched nearly twenty 0:03:03.600 --> 0:03:06.800 products anything you can imagine. They have single stock products, 0:03:06.800 --> 0:03:10.560 they have inverse in those talk products that generate income, 0:03:11.280 --> 0:03:14.360 and then we realized that there is a much broader 0:03:14.480 --> 0:03:18.639 universe there. First, they charge us higher than average fees. 0:03:19.400 --> 0:03:21.920 We often see fees in the range of one percent 0:03:21.960 --> 0:03:24.640 in those products. So we saw a lot of new 0:03:24.840 --> 0:03:28.960 issues being part of that movement. We looked at the 0:03:29.040 --> 0:03:32.480 data and actually at the broader universe of the rialties 0:03:32.480 --> 0:03:36.040 and enhanced product We saw over one hundred and sixty launches, 0:03:36.600 --> 0:03:39.200 which is a record high. We looked at the assets 0:03:39.240 --> 0:03:42.400 under management and it's just the growth is so rapid. 0:03:42.520 --> 0:03:46.600 It reached three hundred billion, and just five years ago 0:03:46.680 --> 0:03:49.840 it was like fifty billion. So the more you looked 0:03:49.840 --> 0:03:52.920 into the space, the more you found the social media marketing, 0:03:53.240 --> 0:03:57.040 the long YouTube videos, like a whole universe of people 0:03:57.080 --> 0:04:01.160 that engage into this community daily that call it a 0:04:01.240 --> 0:04:04.600 yield community that you know, there are hundreds of products 0:04:04.640 --> 0:04:09.040 they talk about and compare and discuss. So it's really 0:04:09.120 --> 0:04:11.560 something that's been growing by the day. We run the 0:04:11.600 --> 0:04:13.440 data at the beginning of the story, and we pretty 0:04:13.480 --> 0:04:15.680 much had to update it every day because there were 0:04:15.760 --> 0:04:18.679 so many launches coming. Some of them had like twenty 0:04:18.680 --> 0:04:23.120 five products in them. So it's just like insane amount 0:04:23.160 --> 0:04:24.880 of products that are coming to the market at a 0:04:25.000 --> 0:04:25.760 very rapid base. 0:04:26.920 --> 0:04:30.080 Okay, well, Dona tell us more about what the products 0:04:30.120 --> 0:04:33.719 are and what an investor might hope to accomplish with them. 0:04:34.120 --> 0:04:36.320 So, as the NITSA mentioned, there's more than one hundred 0:04:36.360 --> 0:04:39.159 and sixty new ones just so far this year, which 0:04:39.440 --> 0:04:43.240 is a record high for the number of new We 0:04:43.279 --> 0:04:47.080 call them in the story derivatives enhanced exchange traded funds. 0:04:47.360 --> 0:04:50.320 You can divide them, as Eric does, into a number 0:04:50.320 --> 0:04:53.680 of different categories. We focused on two main categories in 0:04:53.720 --> 0:04:57.880 the story. One is the ones that have like the 0:04:57.960 --> 0:05:04.000 options overlays that then have these hefty yields, these hefty payouts, 0:05:04.279 --> 0:05:07.479 and another one is the single stock version, so those 0:05:07.520 --> 0:05:12.039 are levered or inverse funds that focus on just one company. 0:05:12.440 --> 0:05:16.040 One of the most popular ones is based on Navidia 0:05:16.120 --> 0:05:19.039 No Surprise. This year, and we mentioned in the story 0:05:19.160 --> 0:05:22.120 its assets grew from like two hundred million at the 0:05:22.120 --> 0:05:24.880 start of the year to five billion dollars currently, So 0:05:25.560 --> 0:05:28.880 just a tremendous amount of money is going towards anything 0:05:28.920 --> 0:05:33.279 that can sort of catch people's attention these days. Obviously, 0:05:33.320 --> 0:05:35.279 then Navidio one is actually a really good example because 0:05:35.360 --> 0:05:39.160 Navidia has the stock itself has been doing so well, 0:05:39.480 --> 0:05:42.480 and so then what people do is turn towards some 0:05:42.520 --> 0:05:45.720 of these ETFs that can amp up these returns and 0:05:45.800 --> 0:05:49.600 just juice things up even further and make things more exciting. 0:05:50.240 --> 0:05:52.360 And a lot of the launches are because you've got 0:05:52.400 --> 0:05:54.839 to cover all these stocks, so there's going to be 0:05:54.880 --> 0:05:57.719 like dozens and dozens of these over the years. I 0:05:57.760 --> 0:06:01.320 think Granted Shares has a filing to do this sort 0:06:01.360 --> 0:06:04.000 of yield boost thing. I think their firm is called 0:06:04.080 --> 0:06:06.839 yield Boost yield Boost, Yes, and they're going to do 0:06:06.960 --> 0:06:09.919 like three x q's yield boosts. So they're gonna do 0:06:10.600 --> 0:06:14.120 yield boost thing on something already really boosted. And I 0:06:14.120 --> 0:06:16.560 also noticed something funny about this. In Canada, there's an 0:06:16.560 --> 0:06:19.960 issue called there's an issue called Yield Maximizer, and their 0:06:20.000 --> 0:06:23.640 product line was Yield in all caps, but then Maximizer 0:06:24.000 --> 0:06:26.760 was in capital M and then lowercase, and they had 0:06:26.800 --> 0:06:28.960 an official name change for all their funds. And normally 0:06:29.000 --> 0:06:32.760 when you see that the name changes like dramatically or substantially. 0:06:33.240 --> 0:06:38.200 They just wanted to capitalize maximizer, so they and that's 0:06:38.200 --> 0:06:40.760 what I got a feeling that there's this like sort 0:06:40.760 --> 0:06:45.760 of race to package and push the envelope. I think 0:06:45.800 --> 0:06:48.840 of that top gun meme need for speed. You know, 0:06:49.040 --> 0:06:54.240 there is just a market for volatility, big numbers, and 0:06:54.320 --> 0:06:57.600 it's a you know, largely retail traders who are looking 0:06:57.640 --> 0:06:57.920 for this. 0:06:58.680 --> 0:07:00.679 Okay, speaking of retail trader, so I'm going to bring 0:07:00.760 --> 0:07:05.240 Todd Akenn here. Todd, you are a retail trader and 0:07:05.320 --> 0:07:08.480 you have a growing YouTube channel. Talk to us about 0:07:08.560 --> 0:07:12.040 how you got into this specific type of ETF. 0:07:12.640 --> 0:07:12.880 Yeah. 0:07:12.880 --> 0:07:15.960 Well, thanks for having me everyone once again. And well, 0:07:16.040 --> 0:07:20.040 when I started Unconventional wealth Ideas, I was investing in 0:07:20.080 --> 0:07:24.480 the more traditional kinds of ETFs, and then subscribers would 0:07:24.480 --> 0:07:27.560 bring yield max and these other ideas to me, and 0:07:27.600 --> 0:07:29.920 then I realized that not only is it a way 0:07:30.000 --> 0:07:34.040 to get more attention of my videos, but I thought, well, 0:07:34.080 --> 0:07:36.760 maybe there's a way to actually make this investment viable 0:07:37.200 --> 0:07:40.400 and work for everyone. And so it doesn't really work 0:07:40.440 --> 0:07:43.520 for others because they don't really play them right. But 0:07:43.560 --> 0:07:47.880 if you use them properly and you blend them with 0:07:47.960 --> 0:07:50.400 other ETFs that give you the growth so you don't 0:07:50.440 --> 0:07:52.800 have as much nabdicate, then you can kind of get 0:07:52.840 --> 0:07:57.480 an overall blend of ETFs that help you outperform the market. 0:07:58.440 --> 0:08:01.840 Talk to us about the specific products that you've used 0:08:02.200 --> 0:08:04.560 and what kind of experience you've had. 0:08:06.000 --> 0:08:10.120 Yeah, well, the first ETFs that came out were Tesla, 0:08:10.480 --> 0:08:13.480 and you know the more popular stocks that everyone trades, 0:08:13.520 --> 0:08:16.760 Tesla and Video. So we had Tesley and vide and 0:08:17.400 --> 0:08:22.120 Tesla was struggling with its stock price. So tes Lee 0:08:22.360 --> 0:08:25.560 was not liked by many people in the community. They 0:08:25.640 --> 0:08:29.200 kept saying, the nab erosion is so bad. And how 0:08:29.200 --> 0:08:30.920 are you ever going to get back to even on this, 0:08:31.520 --> 0:08:34.040 you know, with this investment. But I'm always from the 0:08:34.080 --> 0:08:37.160 camp that if you hold your dividends long enough, you'll 0:08:37.200 --> 0:08:40.520 eventually cash flow. But the key with Tesli is that 0:08:40.559 --> 0:08:42.840 you can't live out of it because if you're trying 0:08:42.880 --> 0:08:44.640 to live out of Tesli and live free from your 0:08:44.720 --> 0:08:47.840 nine to five with things like Tesli, well, that obviously 0:08:47.840 --> 0:08:50.720 has too much volatility. It drops, it can be a 0:08:50.760 --> 0:08:54.600 widow maker in your account by itself. And so you know, 0:08:54.640 --> 0:08:56.880 you don't want to have too much stock exposure anyway 0:08:56.960 --> 0:08:59.359 with any one stock. You want to stay with the indexes. 0:08:59.720 --> 0:09:02.640 So Tesla just had bad luck, you know, and share 0:09:02.679 --> 0:09:06.480 prices down. So Tesley was was not a favorite for others. 0:09:06.520 --> 0:09:09.840 But if you hold it long enough, you'll come out 0:09:09.880 --> 0:09:12.120 on top, you know, if you hold it long enough. 0:09:12.160 --> 0:09:14.800 And so that's my belief is well, cash flow eventually, 0:09:14.840 --> 0:09:17.840 but in the meantime, in the meantime, how can you 0:09:17.880 --> 0:09:20.800 still get performance and not only outperform the markets, but 0:09:20.880 --> 0:09:24.199 withdraw freely out of your account without it cannibalizing your account. 0:09:24.360 --> 0:09:26.560 So we combine it with other yield max ETFs that 0:09:26.640 --> 0:09:30.199 actually grow, you know, some other yield Max stocks have 0:09:30.280 --> 0:09:33.640 been doing doing well. In VIDI was doing well. It 0:09:33.720 --> 0:09:36.760 was moving upward left right on its chart, so even 0:09:36.760 --> 0:09:39.560 though it was it had a huge dividend, you're still 0:09:39.600 --> 0:09:42.480 getting some growth. So people were really happy with NVIDI, 0:09:42.920 --> 0:09:46.360 not happy with Tesli, and I just started, you know, 0:09:46.880 --> 0:09:50.679 diversifying my portfolio out with the you know, Amazon's apples 0:09:50.720 --> 0:09:53.160 of the world through yield Max, and then they came 0:09:53.160 --> 0:09:55.360 out with their fund of funds, which helped give a 0:09:55.360 --> 0:09:59.760 little bit more diversification and stability with volatility, but still 0:09:59.800 --> 0:10:02.160 that it wasn't quite enough to live out of your 0:10:02.160 --> 0:10:03.840 account with. You have to combine it with some of 0:10:03.840 --> 0:10:06.599 these other funds that have come, you know, out to 0:10:06.679 --> 0:10:09.720 the market. Now. Like you know, y'all mentioned yield Boost, 0:10:10.160 --> 0:10:14.040 there's also defiance and rec shares and stuff like that, 0:10:14.080 --> 0:10:16.679 which all help balance out your portfolio a little bit better. 0:10:17.559 --> 0:10:21.000 And I think something that Total also mentioned there is 0:10:21.040 --> 0:10:24.719 such a wide variety of products. And we talked a 0:10:24.760 --> 0:10:27.760 lot about the smaller firms that have been around for 0:10:27.840 --> 0:10:30.400 just a few years. But for example, one of the 0:10:30.400 --> 0:10:34.400 biggest products is coming from JP Morgan Acid Management, and 0:10:34.920 --> 0:10:37.800 during twenty twenty two, that product actually worked quite well. 0:10:37.840 --> 0:10:41.160 There's obviously a massive sell of and due to the 0:10:41.200 --> 0:10:46.880 covered code nature, they manage to outperform the SMP and 0:10:47.040 --> 0:10:50.800 Acid jumped to seventeen billion. I think they kind of 0:10:50.960 --> 0:10:53.679 tripled in twenty twenty two, which you know was a 0:10:53.760 --> 0:10:58.280 year when people were staying away, you know, staying in cash, 0:10:58.360 --> 0:11:01.880 being careful and JEPI got that popularity. So we have 0:11:02.000 --> 0:11:06.160 those big players actually running some of the biggest products now. 0:11:06.400 --> 0:11:11.560 Is thirty six billion obviously really really big TTF, A 0:11:11.559 --> 0:11:14.880 lot of options, people are writing about it whatever it's rebouncing, 0:11:14.960 --> 0:11:20.000 so it has its own power and importance in the market. 0:11:20.360 --> 0:11:24.400 Goldman is also having similar products. A lot of the 0:11:24.400 --> 0:11:27.480 big issuers are working on them, whether it's Buffer, whether 0:11:27.480 --> 0:11:32.600 it's covered CO. They're less likely to engage with retail, 0:11:33.240 --> 0:11:37.040 even though we've seen some of the portfolio managers like 0:11:37.080 --> 0:11:39.679 Hamilton Reiner, you know, I've seen a few videos of 0:11:39.760 --> 0:11:42.440 him on YouTube engaging with some of them. But it's 0:11:42.480 --> 0:11:47.840 really those mainstream products like eield Max, like Tidal, they're 0:11:47.880 --> 0:11:54.840 really encouraging that interaction with retail traders. And something they're 0:11:54.880 --> 0:11:57.240 saying is a lot of maybe the big names like 0:11:57.320 --> 0:12:01.839 JP Morgan and you know, big financial institutions are maybe 0:12:01.920 --> 0:12:05.040 underestimating retail traders. You are not going directly to them, 0:12:05.520 --> 0:12:07.960 so they find this is a way to market and 0:12:08.000 --> 0:12:11.160 reach a new audience. And indeed they're seeing big impact 0:12:11.240 --> 0:12:13.920 from it. After each video they appear, they're saying, oh, 0:12:13.920 --> 0:12:16.959 we're seeing more inflows after we go on YouTube. So 0:12:17.000 --> 0:12:19.559 it tells you a lot about how the ETF industry 0:12:19.600 --> 0:12:20.040 is changing. 0:12:28.200 --> 0:12:32.120 Jeffy, which is the JP Morgan equity premium income, I 0:12:32.120 --> 0:12:36.080 would call that more conservative. That's writing call options way 0:12:36.120 --> 0:12:40.120 out of the money, right, so you get some upside, 0:12:39.840 --> 0:12:42.320 you get a little income like eight nine percent. As 0:12:42.360 --> 0:12:46.120 you said, those I think are really appealing to older investors, 0:12:46.120 --> 0:12:47.920 but some younger One guy on our team we call 0:12:47.960 --> 0:12:50.240 him Jeffy. Jackie loves that ETF and I likes JEFFQ. 0:12:51.200 --> 0:12:54.480 But I think what the yield Max and yield Boost 0:12:54.480 --> 0:12:56.599 people did to say, oh, that's an interesting idea, but 0:12:56.600 --> 0:12:59.040 why don't we write calls right here? Or why don't 0:12:59.080 --> 0:13:01.360 we do a straddle? And this is how the ETF 0:13:01.360 --> 0:13:05.240 industry progresses. Like the first smart beta ETF was very general. 0:13:05.320 --> 0:13:08.920 Let's wait by price to earnings and we're screened by that, 0:13:09.520 --> 0:13:11.560 and then all of a sudden, you get ones that have, like, 0:13:11.720 --> 0:13:15.160 you know, twenty five different criteria. Now, so when it 0:13:15.200 --> 0:13:18.520 comes to these ETFs, I want to ask Todd a 0:13:18.600 --> 0:13:23.679 question about this. If you buy Tesla Tesla tsly, that's 0:13:23.679 --> 0:13:25.640 the one that writes call options just out of it, 0:13:27.400 --> 0:13:30.760 are you making a call that Tesla won't go up 0:13:31.000 --> 0:13:33.160 because you are giving up a lot of your I 0:13:33.160 --> 0:13:36.720 mean almost all your upside so you do get this dividend, 0:13:37.280 --> 0:13:39.560 so I guess you have to believe Tesla's not going 0:13:39.600 --> 0:13:41.720 to go on some big run. And then the second 0:13:41.720 --> 0:13:45.920 thing is dividends are taxes ordinary income. I was having 0:13:45.960 --> 0:13:49.440 a conversation with someone says, actually might be more tax 0:13:49.480 --> 0:13:51.480 efficient to take a stock you've held for a year 0:13:51.920 --> 0:13:55.520 and just sell small increments of it and almost pretend 0:13:55.559 --> 0:13:58.240 that's your dividend to be tax less. What do you 0:13:58.240 --> 0:13:59.080 think about both those? 0:13:59.080 --> 0:13:59.320 Todd? 0:14:00.840 --> 0:14:05.400 Yeah, Well, so they have vehicles that they combine, you know, 0:14:05.520 --> 0:14:08.160 you can combine with the test lead to get your upside, 0:14:08.240 --> 0:14:11.960 like a t SLL. I don't know if that's granted shares, 0:14:12.000 --> 0:14:14.880 but y'all were mentioning yield boost before, and so there 0:14:14.920 --> 0:14:17.640 are vehicles that you can use to get your upside. 0:14:17.679 --> 0:14:20.280 I mean me myself. I will buy a little bit 0:14:20.280 --> 0:14:24.440 of Tesla stock or sell put options on Tesla to 0:14:24.520 --> 0:14:27.560 get more upside appreciation and lower my risk a little 0:14:27.600 --> 0:14:29.960 bit there, and then I'll buy test Lead just for 0:14:30.040 --> 0:14:34.640 the income. And obviously my big thing at my channel 0:14:34.680 --> 0:14:37.800 is I stick with the index. Is where Tesla is 0:14:37.800 --> 0:14:39.920 a large part of let's say the nasadack, it's a 0:14:39.920 --> 0:14:42.920 pretty good chunk of it. So I don't mind putting 0:14:43.200 --> 0:14:47.000 the most the bulk of my money in things like Cornerstone, 0:14:47.040 --> 0:14:49.560 which is you know, like JEPI is one of my 0:14:49.960 --> 0:14:52.160 one of my favorites. That's a that's a crowd favorite. 0:14:52.200 --> 0:14:54.800 It's more conservative, but Cornerstone was one of the first 0:14:54.880 --> 0:14:57.560 ever you know, they've been around since the eighties. And 0:14:57.600 --> 0:15:00.320 that's where I get a lot of my perform hormans. 0:15:00.360 --> 0:15:02.640 That's index. So I don't have to reach reach for 0:15:02.720 --> 0:15:06.560 a Tesla or any stock specific gains I can. I 0:15:06.560 --> 0:15:10.440 can put it in something like a Cornerstone CRFCLM, and 0:15:10.480 --> 0:15:13.360 then that gives me not only the index exposure that 0:15:13.400 --> 0:15:16.840 I need, but it's it's a very unique, a very 0:15:16.920 --> 0:15:19.120 unique fund. It has a twenty one percent dividend at 0:15:19.120 --> 0:15:22.360 the NAV and it drips that dividend, and it drips 0:15:22.360 --> 0:15:25.160 the twenty one percent divinitent down at NAV for free 0:15:25.240 --> 0:15:27.360 money every month. As I always say, so it's you know, 0:15:27.480 --> 0:15:30.560 if there's like an eighteen percent premium right now with 0:15:31.000 --> 0:15:34.080 Cornerstone shares to its net asset value, So when you 0:15:34.120 --> 0:15:36.680 drip that twenty one percent dividend, you're also getting that 0:15:36.800 --> 0:15:41.280 premium gain every month, which is really, you know, really interesting, 0:15:41.320 --> 0:15:43.880 and I don't know why more people don't discuss Cornerstone. 0:15:43.920 --> 0:15:47.360 It's four star rated on morning Star five stars sometimes, 0:15:47.520 --> 0:15:50.400 and so I instead of reaching for a tesla, I 0:15:50.480 --> 0:15:53.120 go with the indexes and I go with things that 0:15:53.160 --> 0:15:57.440 can help me get performance. Cornerstone moves. It has twenty 0:15:57.480 --> 0:16:00.600 percent premiums on average, and it has a twenty percent 0:16:00.640 --> 0:16:03.040 dividen and it drips it down at the NAV. So 0:16:03.120 --> 0:16:05.160 I kind of get my oun performance that way, and 0:16:05.160 --> 0:16:07.480 then I play it around It's Wright's offerings to really 0:16:07.560 --> 0:16:10.240 level up my account. But then I have Cornerstone and 0:16:10.440 --> 0:16:12.320 all these other funds that I mentioned, Rex Funds and 0:16:13.080 --> 0:16:16.160 other funds like that. But as far as the taxes go, 0:16:16.360 --> 0:16:20.640 Cornerstone is also a return of capital. So many of 0:16:20.640 --> 0:16:23.560 these funds might be a return of capital, but Cornerstone, 0:16:23.600 --> 0:16:25.360 if you don't sell those shares, you don't have to 0:16:25.360 --> 0:16:27.480 pay taxes. So that's also how I get around the 0:16:27.520 --> 0:16:29.400 taxes with you know, return of capital. 0:16:29.760 --> 0:16:31.720 I want to jump in and say, just to be 0:16:31.800 --> 0:16:34.840 super clear, like a lot of people will consider these 0:16:35.640 --> 0:16:40.600 investments really really risky. And Eric, you mentioned that they 0:16:40.600 --> 0:16:44.240 can trail. A lot of them trail they're underlying stock 0:16:44.320 --> 0:16:47.880 or they're underlying index, So you know, you'll have like 0:16:47.920 --> 0:16:51.360 the Tesla will just be underperforming by that much more 0:16:51.640 --> 0:16:55.080 versus Tesla. Even during a year when Tesla is down 0:16:55.120 --> 0:16:58.120 a lot, it'll be down even more. The same goes 0:16:58.200 --> 0:17:01.320 for you know, the coinbase one we mentioned in the story, 0:17:01.480 --> 0:17:04.840 and a lot of other ones for retail investors. For 0:17:04.840 --> 0:17:08.359 a lot of retail investors, that might not matter. Maybe 0:17:08.400 --> 0:17:11.480 they're more interested in getting that dividend income and less 0:17:11.480 --> 0:17:15.359 interested in maybe it's just not as big of a 0:17:15.400 --> 0:17:19.040 concern that something is underperforming. They want the dividend income. 0:17:19.520 --> 0:17:22.040 But I just wanted to caveat that they really are 0:17:22.080 --> 0:17:25.639 considered a lot of them are considered risky by you know, 0:17:25.680 --> 0:17:27.840 the investment community, people who watch this space. 0:17:27.960 --> 0:17:30.360 Yeah, no, doubt. I mean this is we have our 0:17:30.400 --> 0:17:33.600 traffic light system. These would be yellow lights. They're not 0:17:33.680 --> 0:17:36.840 quite red because there's no leverage involved. They're not rolling futures, 0:17:37.400 --> 0:17:40.000 but you are. You got to really read the fine 0:17:40.000 --> 0:17:43.080 print here and know what you're doing. I think something 0:17:43.119 --> 0:17:45.680 like a two x tesla, though that is red light 0:17:45.800 --> 0:17:50.160 because you could lose money quicker. These are a writing call. 0:17:50.240 --> 0:17:53.240 It's just it's different. Once you add leverage into the mix, 0:17:53.840 --> 0:17:55.840 then everything could go twice as fast up or down. 0:17:55.920 --> 0:18:00.199 So I think that's where these are moderately risky. But 0:18:00.280 --> 0:18:05.199 they're again I think Todd, you seem like you have 0:18:05.240 --> 0:18:07.840 a plan for this. You like this sort of mixing 0:18:07.880 --> 0:18:11.040 and the concoction of different things, and this is what 0:18:11.080 --> 0:18:13.800 you like to do every day. So I think this 0:18:13.840 --> 0:18:16.520 is the kind of template for like the kind of 0:18:16.560 --> 0:18:20.159 retail trader because remember Joel we had, Remember we had 0:18:20.200 --> 0:18:23.199 that guy on that nineteen year old who'd love to 0:18:23.240 --> 0:18:27.520 trade sqqq and tqqq but he monitored all day. 0:18:27.760 --> 0:18:31.600 It seems so long ago and quaint it does well. 0:18:31.640 --> 0:18:34.439 Honestly, that's a lot of volatility, though that guy was 0:18:34.880 --> 0:18:37.719 that's a whole other level. I think this is actually tamer. 0:18:37.760 --> 0:18:41.480 But at some point, I think, Todd, let me ask 0:18:41.520 --> 0:18:44.000 you this, like, you have fun trading, you do this 0:18:44.000 --> 0:18:47.720 stuff like at some point you know, either you do 0:18:47.840 --> 0:18:50.639 really well and you stick to it, or maybe you're like, 0:18:50.720 --> 0:18:55.119 you know, actually, I'll just buy Tesla stock or the 0:18:55.200 --> 0:18:59.040 cues and just not mess with this anymore. I do 0:18:59.119 --> 0:19:02.479 think sometimes trade do come to that, But on the flip, 0:19:02.760 --> 0:19:05.240 that's not as fun. And this is part of what 0:19:05.359 --> 0:19:08.879 we call roe returnal entertainment because a lot of people 0:19:08.880 --> 0:19:10.480 have a Core four one K. They can't touch it. 0:19:10.480 --> 0:19:12.200 You got away thirty years for it to compound. It's 0:19:12.200 --> 0:19:14.720 like watching paint dry. Actually it's watched like watching a 0:19:14.760 --> 0:19:17.400 tree grow. You would go mental looking at it every day. 0:19:17.800 --> 0:19:19.639 So they like to have fun with some stuff on 0:19:19.680 --> 0:19:21.879 the side. Is that this for you or is this 0:19:22.000 --> 0:19:25.000 like your whole nest egg? I guess. And how do 0:19:25.040 --> 0:19:27.320 you feel about that idea of do you think you'll 0:19:27.320 --> 0:19:28.840 someday come out the other end and be like, you 0:19:28.880 --> 0:19:31.560 know what, I'll just buy the stock and wait thirty years. 0:19:32.160 --> 0:19:35.000 Yeah, I appreciate that question, Eric. You know, for me 0:19:35.400 --> 0:19:38.359 it is it is fun to not have fomo because 0:19:39.080 --> 0:19:42.560 when you're in the indexes You'll see other stocks kind 0:19:42.560 --> 0:19:44.640 of jump up and you'll say, oh, man, I wish 0:19:44.720 --> 0:19:48.560 I was in that stock. So what yield Max and 0:19:48.600 --> 0:19:50.600 some of these funds do for me is they allow 0:19:50.640 --> 0:19:53.760 me to not have fomo. I invest a very small amount, 0:19:53.880 --> 0:19:57.320 and these kinds of vehicles like yield Max. I always say, 0:19:57.720 --> 0:20:00.120 you know, if I have one hundred thousand dollars position 0:20:00.280 --> 0:20:02.560 in this index over here, well then yield Max will 0:20:02.600 --> 0:20:05.040 be like one or two thousand dollars of my dollars 0:20:05.280 --> 0:20:07.800 towards the bottom of my portfolio. They just kind of 0:20:07.800 --> 0:20:10.359 give a little bit of extra growth for me. The 0:20:10.400 --> 0:20:13.400 whole name of the game is qualifying income. And when 0:20:13.400 --> 0:20:16.560 you mentioned your trader that did SQQQ and t QQ, 0:20:17.119 --> 0:20:21.000 I strangle those often. But my thing was the banks 0:20:21.000 --> 0:20:23.840 didn't let me get my house with those gains. They 0:20:23.840 --> 0:20:26.639 were two up and down. I needed dividends. So I 0:20:26.720 --> 0:20:29.639 go with yield Max and all these other dividend funds 0:20:30.040 --> 0:20:33.639 to give me the qualifying income I need to get 0:20:33.840 --> 0:20:36.680 loans and to live free. And if I hold them 0:20:36.680 --> 0:20:39.200 long enough again, they'll cash flow. And even though they're 0:20:39.240 --> 0:20:43.440 down at the moment, they will eventually cash flow eventually, 0:20:43.600 --> 0:20:46.760 And you know, I keep them so small to where 0:20:46.760 --> 0:20:48.840 they don't even affect my performance. They just kind of 0:20:48.840 --> 0:20:51.560 give me the fomo that i'm you know that I can, 0:20:51.920 --> 0:20:54.520 I can take care of their and they give me 0:20:54.560 --> 0:20:57.280 the qualifying income I need to live free from a 0:20:57.320 --> 0:20:57.840 nine to five. 0:20:58.480 --> 0:21:00.600 That is interesting, guy, It's a great anecdote touch. 0:21:00.840 --> 0:21:05.320 So I'm so curious about that, toddic So just in general, 0:21:05.359 --> 0:21:08.040 talk to us about how you approach a portfolio. 0:21:08.960 --> 0:21:11.600 Yeah, I mean every day I say it in my 0:21:11.720 --> 0:21:16.959 videos to stay with the indexes. And obviously on my 0:21:17.000 --> 0:21:19.320 about a million dollars invested in my account, we're up 0:21:19.359 --> 0:21:21.719 thirty two percent for the year. Most of that is 0:21:21.720 --> 0:21:26.400 because I anchor my portfolio to Cornerstone, and then I 0:21:26.440 --> 0:21:30.400 anchor it next to Defiance and then round Hill because 0:21:30.480 --> 0:21:32.679 Roundhill gives you some of the gains that move up 0:21:32.840 --> 0:21:36.400 upward left right and you get the dividends. But Cornerstone 0:21:36.440 --> 0:21:39.520 I always tout that one because it has the lowest maintenance, 0:21:39.720 --> 0:21:41.760 which is another term. I don't know if y'all want 0:21:41.760 --> 0:21:44.160 to get into that on this podcast, but in order 0:21:44.200 --> 0:21:45.720 to withdraw out of your account, you need to have 0:21:45.800 --> 0:21:49.399 low maintenance names, and Cornerstone is such high quality that 0:21:49.440 --> 0:21:51.880 it's low maintenance, whereas a lot of yield Mac's names 0:21:51.880 --> 0:21:55.040 are low quality, so they have high maintenance, so they 0:21:55.119 --> 0:21:57.280