ETNs Of The Month: GLDI, USOI

First, a sale!  Facebook (FB) triggered a sale after declining 20% from its all-time high.  First bought in January 2016, it was repurchased seven additional times but not since May 2018.  It was sold for a 159% gain (17% annualized).  Facebook is a cash cow which seems to have squeezed every imaginable dollar from its current platforms.  Facing an uncertain future with its announced pivot to the Metaverse™ as well as increasing regulatory scrutiny, I am more comfortable owning FB via QQQM and not directly.  

The proceeds from this sale were directed into my favorite basket of yield ETF/Ns:  the index covered calls of QYLD, RYLD, and XYLD; the covered calls of SLVO (silver, previously bought); and new covered calls GLDI (gold) and USOI (oil).

As noted in July, SLVO's yield was an unsustainable 35%; it is currently 28%.  GLDI and USOI are currently yielding 11% and 24% respectively.  Anything above the index covered calls' range of 9% to 12% is a bonus.  Adding GLDI and USOI to SLVO will result in more reliable, less lumpy overall monthly cash flows.

Boilerplate time...

As a stretch goal: for dividend income purposes, I'd like this portfolio to eventually be as much as a 50/50 split between stocks and yield. As seen below, it is currently 54/46.

I am in no rush to flip into yield. I would rather let my winners run forever. However, if in any given month I see no stocks that present themselves as especially good buying opportunities, I have no reservations in simply adding to my bond, preferred stock, and/or covered call ETF/Ns. It is truly a month-to-month situation (as it has always been!).

For the foreseeable future, I want to track my Big Five Two every month, whether I buy them or not.

Amazon (AMZN)

• $1.73T market cap
• no dividend
• $458.0B revenue
• 15% revenue growth
• $79.0B cash
• $152.8B debt
• $54.7B operating cash flow
• $9.3B free cash flow

Microsoft (MSFT)

• $2.42T market cap
• 0.8% dividend yield
• $176.3B revenue
• 22% revenue growth
• $130.6B cash
• $78.9B debt
• $82.0B operating cash flow
• $49.8B free cash flow

Here's my current portfolio (buy, hold, and sell). As always, I believe in all of these stocks/ETF/ETNs - until I sell them.

Microsoft (MSFT) 16.16%

Amazon (AMZN) 12.48%

Global X U.S. Preferred ETF (PFFD) 11.77%

iShares Broad USD High Yield Corporate Bond ETF (USHY) 11.73%

Xtrackers USD High Yield Corporate Bond ETF (HYLB) 11.60%
Invesco NASDAQ 100 ETF (QQQM) 7.21%
Alphabet (GOOGL) 5.75%

Global X NASDAQ 100 Covered Call ETF (QYLD) 3.79%

Invesco NASDAQ Next Gen 100 ETF (QQQJ) 2.82%
Intuitive Surgical (ISRG) 2.69%

Global X Russell 2000 Covered Call ETF (RYLD) 2.43%

Global X S&P 500 Covered Call ETF (XYLD) 2.34%
Costco Wholesale (COST) 1.70%

UnitedHealth Group (UNH) 1.51%

Verizon (VZ) 1.09%

Visa (V) 1.06%

AT&T (T) 0.94%

Credit Suisse X-Links Silver Shares Covered Call ETN (SLVO) 0.84%

Credit Suisse X-Links Crude Oil Shares Covered Call ETNs (USOI) 0.75%

Credit Suisse X-Links Gold Shares Covered Call ETN (GLDI) 0.75%

ProShares UltraPro QQQ (TQQQ) 0.10%

ProShares UltraPro S&P 500 (UPRO) 0.04%

ProShares UltraPro Russell 2000 (URTY) 0.03%

I Say "Invest Every Month." Have I Actually Done What I've Said?

TL;DR - no.  But I've tried.

If someone asks me what was the one thing I did right as an investor for the past 20+ years, it is that I have invested often.  Markets down, markets up; single, married; career going not-so-well, career going well; etc.  I would boil this invest-often philosophy into some expression like "invest at regularly scheduled intervals" or more simply "invest every month."  So here is the hypothetical follow-up question to be answered:  Have I actually done what I've said?

[As you can see, the title of this graph is "Number of Months Invested per Year" when a more correct title would be "Number of Months with Deposits per Year - Ignoring Withdrawals and Purchases funded by Sales."  I chose the former because it more clearly expresses the ability to save money to my investment account]

Recency bias strikes again.  From 2013-2020, "invest(ing) every month" was more or less true.  Before that, it seems more of an aspiration.  

Early in my career, I just didn't have extra money in most months.  2011 and 2012 were spent knocking out student loan debt (not the smartest choice, especially given market performance since).  In my best years I didn't hit 100%.  Even worse, there appears to be some correlation between market performance and number of months invested; the dreaded act of "timing the market." There is definitely some not-so-great, actually-quite-awful personal financing going on here for nearly two-thirds of my career.  Further data supporting here...

[Monetary amounts removed because 1) it's tacky and 2) in the context of this post, the amounts matter more in the relative sense]

In conclusion, "invest every month" is not the best advice.  Perhaps "invest what you can, when you can" is better, with the knowledge that approximately no one ever has regretted investing too much or starting too early.

An Updated Summary of My Grand Unified Theory of Investing

 Check out my previous post for how we landed here...

Account:	IRA	Roth IRA	Stocks & Income
Current percentage of total holdings:	~26%	~4%	~70%
Investment philosophy:	Jack Bogle	George Soros	Warren Buffett
Headline summary:	“Don't Do Something, Just Stand There!”	“You Call That A Position?”	“Wonderful Companies at Fair Prices”
Account holdings:	• 55% indices (IWM, QQQJ, QQQM, VOO) • 23% high-yield stocks (VIG, VYM) • 22% high-yield bonds (HYLB, USHY)	• 100% one “high-conviction” stock (???)	• 55% stocks (2 core holdings + others, QQQJ, QQQM, TQQQ, UPRO, URTY) • 8% index covered call ETFs (QYLD, RYLD, XYLD) • 37% preferred stock/bond/ commodity ETFs (HYLB, PFFD, SLVO, USHY) entire portfolio detailed here
Are dividends reinvested?	Yes	No	No
Investment schedule:	N/A	Asynchronous	Synchronous
When do I intend to make changes?	Never	When I have a higher-conviction bet than the existing one	Monthly purchases; "I believe in all of these stocks - until I sell them"
Is account actively funded with new contributions?	No	No	No
Is account written about on this blog monthly / ever?	No	No	Yes