Earn more income despite market volatility with QYLD
Major stock indexes swayed from red to green, but savvy investors are in a position to take advantage of the opportunity.
These wild rides in the stock market are nothing new. History has shown that these roller coasters are often normal and the patient investor is the one who wins in the end.
“Seasoned investors know that volatility is part of the package,” says a Chase.com article. “Looking back to recent history, we saw historic volatility in 2008 with the Great Recession, 2015 with the global stock market selloff and, of course, 2020 (no comment needed).
“But all this historic volatility has become precisely that: ancient history,” the article continues. “These dips and wild swings have averaged out and normalized over time.”
A big part of weathering the storm is ignoring emotions. Often, emotions can result in a rash decision like selling too soon.
“Okay, so volatility is going to happen. It’s going to be tough,” Chase says. a pro. It may feel like a roller coaster, but you’re more in control than you think.
Earn income while markets fluctuate
One ETF that has benefited from market fluctuations is the Global X Nasdaq 100 Covered Call ETF (QYLD). While volatility measured by the VIX index is up more than 70% since the start of the year, the distribution yield on QYLD is up 22%.
QYLD follows a ‘covered call’ or ‘call-sell’ strategy in which QYLD buys shares of the Nasdaq 100 Index and ‘sells’ or ‘sells’ corresponding call options on the same index. As such, not only does QYLD offer equity exposure, but the ETF also offers an income component.
In today’s low interest rate environment, fixed income investors understand how difficult it is to try to extract as much income as possible from public debt. QYLD seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the CBOE Nasdaq-100 BuyWrite V2 Index.
QYLD offers investors:
- High Income Potential: QYLD seeks to generate income through the writing of covered call options, which historically produces higher returns during periods of volatility.
- Monthly distributions: QYLD has made monthly distributions for six consecutive years.
- Efficient Options Execution: QYLD sells call options on the Nasdaq-100 Index, saving investors the time and expense of doing so individually.
For more news, insights and strategy, visit the Thematic Investing Channel.