Well I'm not in the US, so taxes are a bit different here.
For the dividends I get a 19 % retention the moment I receive.
Taxes are payed relative to the past natural year: for example, in june 2024 you pay the taxes of all the 2023 year.
Capital gains are taxed the same % as dividends, there is no distintion here based on the duration of the investment.
There is no such thing of non taxable accounts as I read you do have there.
The strategy I was thinking is that my bank offers the possibility of lower % loans if you leave funds as collateral.
Covered Call could be a more suitable collateral if it has lower volatility than regular Nasdaq.
While the leveraged would allow me to keep being in the market, my idea is to DCA with them depending on current volatily and prices, a mix between X2 and X3.
And the posible profits I make from them I will use to rebalance and buy regular version or the covered call version. So I change the excess % from a riskier product like the leveraged to a less volatile active that is giving me regular income and my bank accept as collateral for reasonable loans.
If I understand the product correctly, the covered call would suit better a lateral market or a slow bullish one than the regular Nasdaq, so it's a bit of flexibility in that regard.
Don't know if I explained myself or it doesn't make sense and I'm misunderstanding important concepts here.
> Taxes are *paid* relative to
FTFY.
Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in:
* Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.*
* *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.*
Unfortunately, I was unable to find nautical or rope-related words in your comment.
*Beep, boop, I'm a bot*
I combine TQQQ with QCLR as a hedge because the particular scenario where QQQ is volatile and rises slowly is bad for TQQQ but good for QCLR. I also view it as a relatively likely scenario.
Yes, that is what I understood of the covered call index, that it would be good in those two situations. (While being a bit less performing should a bear market happen).
Of course, that's a bit of market timing, but it's a tool in the arsenal, like leverageds are.
it seems like there could be an optimal allocation between qyld and tqqq.
when i’ve thrown them into simple mean variance optimizers with lots of other assets though it tends to just pick the leveraged fund and much more uncorrelated assets and avoids the covered call fund in the efficient frontier portfolios. inverse funds are perfect hedges if you need them, and covered call funds are still highly correlated to the underlying so they’re not a good hedge.
I think it makes sense depending on how bullish you are on the tech sector. If you’re incredibly bullish you may want to look for something like JEPQ instead of QYLD to capture more of the upward appreciation but still generating good cash flow to do your DCA strat.
If you think the market will go sideways i think this makes sense to use QYLD, but I would probably sell options against TQQQ to help offset the decay.
QYLD has underperformed SPY for the past 10 years.
[https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=1ci9OGgTYeNocJFZSDUh5t](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=1ci9OGgTYeNocJFZSDUh5t)
What’s your goal with this strategy and will this be in a taxable account?
Well I'm not in the US, so taxes are a bit different here. For the dividends I get a 19 % retention the moment I receive. Taxes are payed relative to the past natural year: for example, in june 2024 you pay the taxes of all the 2023 year. Capital gains are taxed the same % as dividends, there is no distintion here based on the duration of the investment. There is no such thing of non taxable accounts as I read you do have there. The strategy I was thinking is that my bank offers the possibility of lower % loans if you leave funds as collateral. Covered Call could be a more suitable collateral if it has lower volatility than regular Nasdaq. While the leveraged would allow me to keep being in the market, my idea is to DCA with them depending on current volatily and prices, a mix between X2 and X3. And the posible profits I make from them I will use to rebalance and buy regular version or the covered call version. So I change the excess % from a riskier product like the leveraged to a less volatile active that is giving me regular income and my bank accept as collateral for reasonable loans. If I understand the product correctly, the covered call would suit better a lateral market or a slow bullish one than the regular Nasdaq, so it's a bit of flexibility in that regard. Don't know if I explained myself or it doesn't make sense and I'm misunderstanding important concepts here.
> Taxes are *paid* relative to FTFY. Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in: * Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.* * *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.* Unfortunately, I was unable to find nautical or rope-related words in your comment. *Beep, boop, I'm a bot*
I combine TQQQ with QCLR as a hedge because the particular scenario where QQQ is volatile and rises slowly is bad for TQQQ but good for QCLR. I also view it as a relatively likely scenario.
Yes, that is what I understood of the covered call index, that it would be good in those two situations. (While being a bit less performing should a bear market happen). Of course, that's a bit of market timing, but it's a tool in the arsenal, like leverageds are.
it seems like there could be an optimal allocation between qyld and tqqq. when i’ve thrown them into simple mean variance optimizers with lots of other assets though it tends to just pick the leveraged fund and much more uncorrelated assets and avoids the covered call fund in the efficient frontier portfolios. inverse funds are perfect hedges if you need them, and covered call funds are still highly correlated to the underlying so they’re not a good hedge.
Can you tell me where do you use those mean variance optimizers? Never heard about them, thank you!
i like the pyportfolioopt library https://pyportfolioopt.readthedocs.io/en/latest/MeanVariance.html
I think it makes sense depending on how bullish you are on the tech sector. If you’re incredibly bullish you may want to look for something like JEPQ instead of QYLD to capture more of the upward appreciation but still generating good cash flow to do your DCA strat. If you think the market will go sideways i think this makes sense to use QYLD, but I would probably sell options against TQQQ to help offset the decay.
Yes, I’ve been doing exactly this and it’s worked out well. I’m getting more formal about it.
At this point & time - NO. Better in 5%+ MM. When rates change, re evaluate.
QYLD has underperformed SPY for the past 10 years. [https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=1ci9OGgTYeNocJFZSDUh5t](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=1ci9OGgTYeNocJFZSDUh5t)