Dragon Claws
Introduction
I’ve been on a mission to break down different dividend-yielding stocks. I have been focusing on BDCs, but lately started taking a look at other options. Last week, I wrote an article about FS Credit (
YMAX: A 70% Yield That's Mostly Illusion - Here's Why I'd Sell
Summary
- YieldMax Universe Fund of Option Income ETFs' high yield is mostly a return of your own capital, not true income, which erodes your investment over time.
- The fund's structure limits upside in strong markets and exposes you to losses in weak markets, with no real downside protection.
- Most investors misunderstand YMAX's payouts, mistaking principal return for genuine income, and face unfavorable tax consequences.
- I recommend selling YMAX; it's not a long-term wealth builder, and the risks outweigh the appeal of its headline yield.
I’m passionate about finance and investing, focusing on business analysis, fundamental analysis, valuation, and long-term growth, especially in sectors like AI, fintech, finance and tech. I study finance and economy and have hands-on experience in equity research, financial modeling, and creating investment content. I actively analyze publicly traded companies with a focus on business models, earnings performance, and competitive positioning. I also run a finance-focused YouTube channel called “The Market Monkeys”, where I share my thoughts on investment strategies, earnings reports, and market trends. I joined Seeking Alpha to contribute thoughtful, research-backed analysis that helps other investors make better decisions. My goal is to offer clear, unbiased insights into companies' strengths, risks, and valuation to help readers to build their unique opinion and investment strategy.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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