Income Investing Results - November

[COcheesehead]

I believe (from prior threads) ERD50 is a "TR only" guy and views everything in black and white from that perspective. YOC is just one of MANY things to look at....

Flieger

Being an old bond guy, I just got used to looking at it as a metric to determine if I can take advantage of an appreciated asset.

 

[ERD50]

I believe (from prior threads) ERD50 is a "TR only" guy and views everything in black and white from that perspective. YOC is just one of MANY things to look at....

Flieger

Believe what you want, but here I'm trying to understand why anyone thinks YOC matters, at all. It only seems to distort the view.

 

[Flieger]

Believe what you want, but here I'm trying to understand why anyone thinks YOC matters, at all. It only seems to distort the view.

I will, since it is my thread. Thanks for the approval.

Flieger

 

[ERD50]

I have many times looked at my spreadsheet and noticed big difference between YOC and current yield and actively sold and bought another fund with better current yield, gaining some extra monthly income.

So you traded something for a higher current yield. That makes perfect sense (all else being considered equal - you can always trade risk for higher yield, etc)).

But what you paid for it originally (other than taxes) does not change the equation, and should not affect the trade decision. That's similar to the old 'sunk cost fallacy'. And that's what YOC seems to push you towards.

What Is a Sunk Cost—and the Sunk Cost Fallacy?

A sunk cost is an expense that cannot be recovered. These types of costs should be excluded from decision-making.

www.investopedia.com

I'll give a fictitious example with 2 stocks in an IRA (assume no divs to keep it simple):

Stock XXYYZZ: My crystal ball says this will go from $100/sh to $120/sh in the next year.

Stock AABBCC: My crystal ball says this will stay flat at $100/sh in the next year.

Clearly, I should sell AABBCC and buy XXYYZZ.

It does not matter if I paid $200/share or $50/sh for AABBCC or XXYYZZ or any combination. It simply does not enter into it. You look at where oyu are today, and where you expect things to go, and decide from there.

As @Taco pointed out, with YOC, two identical stocks with different purchase dates give you different YOC values. How does that help you compare anything to anything? You can't even compare to the same thing?

 

[surprising]

It gives you two data points to help make decisions. YOC is what you got when you purchased the fund. Current yield is what you'd get today if you purchased it. If YOC is 10% and current yield is 5%, then there is an opportunity to take that gain and search for something else that currently yields 10%. Yes you can use cost basis to arrive at the same conclusion, but since I'm buying these specifically for yield, it helps me to look at it in terms of yield.

 

[Taco]

... If YOC is 10% and current yield is 5%, then there is an opportunity to take that gain and search for something else that currently yields 10%. Yes you can use cost basis to arrive at the same conclusion, but since I'm buying these specifically for yield, it helps me to look at it in terms of yield.

You mention that
- if YOC is 10% and current yield is 5%, you want to look for an alternative yielding 10%.
I would assume that
- if YOC is 10% and current yield is 10%, you would not be looking for an alternative yielding 10%.

The only thing that is different in those scenarios, and therefore what seems like it would be the *primary* driver in your decision making process, would be current yield.

I understand you are looking at both YOC and current yield, which highlights cases where there has been significant price movement. No problem with that.
But if you can take an asset currently yielding X, and re-deploy it into something with a current yield greater than X, you generate more income. And that is true regardless of YOC on the initial investment. So as an income investor focused on yield, comparing current yields of your investments to other current yields seems like it would be very important - that is how you would best identify opportunities to increase your income.

 

[COcheesehead]

YOC is just an indicator of what has happened price wise to the underlying asset. It exposes where appreciation has occurred or the opposite. It doesn’t have to be the basis of comparison, but it can be a heads up on an opportunity.

 

[Taco]

YOC is just an indicator of what has happened price wise to the underlying asset. It exposes where appreciation has occurred or the opposite. It doesn’t have to be the basis of comparison, but it can be a heads up on an opportunity.

I've read enough of your posts to know you are way more investment savvy than me, but unless I'm seriously confused, that is not correct.

YOC, at least by itself, cannot be counted on as an indicator of price change.

Example:
You buy XYZ at $10 with a $1 dividend. YOC (and current yield at that time) is 10%.
A few months later, the price has increased to $14.72 and the dividend remains $1.
The current yield is now 6.79% and of course YOC is still 10%.
There has been no change in your YOC, so how would that indicate there has been price appreciation?

The difference between YOC of 10% and current yield of 6.79% probably does indicate a price increase has occurred. (Maybe that is what you meant?)
But isn't it much easier to just see that the price has increased from $10.00 to $14.72 and is up exactly 47.2%?

It seems odd to me that one would want to use an indicator like "YOC vs current yield" to expose that some fuzzy amount of price appreciation has occurred, when it is so incredibly easy to know exactly what amount price appreciation has occurred by using one's cost basis and the current price.

 

[COcheesehead]

I think I said everything in post #26.

 

[Taco]

Fair enough.

 

[Waynew]

Finally closed October's 2025 review of dividend income. This does not include options income, which is just about to hit $180K and might hit $200K by year end. I'm not afraid to invest in individual stocks, equity ETFs, BDCs, and REITs. That would frighten many investors, but I have a long-term perspective, so volatility is my friend. I have been able to move several investments from my T-IRA to my ROTH. The ROTH now is close to the T-IRA in dividend income. This image summarizes all of our investment accounts (ROTHs, IRAs, and brokerage accounts.)

 

[aja8888]

^^^^^ very nice, Wayne!

 

[SunGuy]

buying FLWS iykykmair

 

[aja8888]

buying FLWS iykykmair

 

[Flieger]

2H25 (and YTD) Cost basis taking a hit. Again, after WD (Nov WD hit Thursday). Income remains steady at this point. Nov Div's a little lower, but Dec comes back strong.

Flieger

 

[Flieger]

Limit order hit for remaining VZ.

Out of curiosity, what are others investing in for their Growth, outside of S&P (like VOO) and Nasdaq (like ONEQ) funds?

Flieger

 

[dobig]

Limit order hit for remaining VZ.

Out of curiosity, what are others investing in for their Growth, outside of S&P (like VOO) and Nasdaq (like ONEQ) funds?

Flieger

SCHG, GRNY, SPMO, FTEC, SPYM, VIG.

 

[Flieger]

Well, I am now out of my Yieldmax experiment (ULTY and MSTY). Both TR losses of more than I could handle despite the weekly (but declining) Div.

On to other Income funds.

Flieger

 

[COcheesehead]

Limit order hit for remaining VZ.

Out of curiosity, what are others investing in for their Growth, outside of S&P (like VOO) and Nasdaq (like ONEQ) funds?

Flieger

THOAX, up 34% YTD. SGENX, up 27% All global go anywhere funds.

 

[COcheesehead]

Well, I am now out of my Yieldmax experiment (ULTY and MSTY). Both TR losses of more than I could handle despite the weekly (but declining) Div.

On to other Income funds.

Flieger

Yieldmax products were my worst investments ever.

 

[dobig]

If you want some growth in an etf that doesn't have ridiculous weighting towards the Mag 7 or tech this looks like a nice little fund with excellent returns. I have a small 3% position and have been happy with it.

RDVY

 

[Flieger]

So, half way through November has been pretty rough. I have abandoned the Yieldmax products (definition of ROC, with not only significant decreased Cost basis, but also decreasing weekly Div). That has reduced my monthly Div forecasted (now $9,846 Nov/$11,600 Dec) but hopefully helps with the Cost Basis drop (now YTD of -3.2%). I do know that many funds are down, but those were the biggest hitters. Added some SPYI and QQQI for now to provide some of the income return. Will be looking for some more. Also added some to my Growth side (Approx 1%).

Flieger

 

[Flieger]

Holdings as of 11/15/25

Flieger

 

[Waynew]

There are several ways to look at income. Certainly capital gains and dividend income are key components. Although I have locked in some gains from selling positions during 2025, a much larger income stream has been the normal monthly and quarterly dividends.

This morning I decided to graph the 2025 dividends by month. Then I took the dividend history for 2020-2025 and the same years for “synthetic” options dividends. The reason for this is simple. Total income matters. By allocating some of our investment dollars to investments that don’t pay a dividend, I can generate additional income using covered call options or cash covered put options. The combination of the dividends, calls and puts is a huge plus on the income side.

 

[Flieger]

That's an awesome income Wayne. I just a not sophisticated enough for the Options stuff, and I don't think I have the same capital to work with. Great job!

Flieger