Here is a topic I'd like to hear some discussion on. For some months now I have been trying to get a clear view in my own head about whether or not I should be actively trading income-producing ETFs.
I think my hesitation is because I do not have a clear reason in my head about why I own them. Do I put them in an actively-traded portfolio and treat them just like equity ETFs because I own them to make a profit on their price moves (having little to do with their income production), or do I own them because I want to reap the benefits of their income flow?
If the answer is the latter, then I feel I should have more of a buy-and-hold approach toward income-producing ETFs. Having said all of the above, one can absolutely lose their shirt in the short term especially with junk bond funds and long-term treasuries or corporate bonds.
I realize this has everything to do with one's investment time frame and also one's sensitivity to risk.
I'm curious. Can others offer opinions that will help me get a clearer view of what is now something of a conundrum for me?
Ernie,
I continue to follow one or more of the Kipling BHS or LRPC models. If treasury, bonds, or dividend ETFs are recommended, I will buy them. That was true about six to eight months ago. Since then most of those asset classes have been out of favor with equities taking over the top spots.
If you need income of around 3% to 3.5%, then you might want to hold income oriented ETFs that will provide this amount of income. Real Estate is an asset class to include.
You likely read this blog on income ETFs. If no, take a look.
https://itawealth.com/income-oriented-investors-21-january-2020/
Lowell
Lowell, just now saw your reply almost a month later. Somehow either I don't get replies to posts I am subscribed to, or they are trapped in my email's junk filter.
Ernie
Ernie,
I keep up with the Forum material by checking in every day to see if there are unread messages.
Lowell
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