Author: Everyday-Freethought

Here is the dividend income report for June, 2022.

The monthly dividend income came out to $3154.20. The yearly income total for 2022 through the end of the month was $5703.41.

The income for June, 2021 was $2162.36, and the yearly income for 2021 through the end of June was $4662.40.

The total was not only better than last June. It was better than July and August. WDIV has a pattern of paying $400 one quarter, then $1000 or more the next quarter. This was one of the good quarters. XYLD paid twice since the May payment usually gets carried over into June. RWR paid twice because I have it in two accounts; first I bought some shares in the wrong account, then I decided to buy some more in the account I originally wanted them in the first place when the price got lower. The first set of RWR shares have lost about 25% of their value. I know I always say that we should focus on income more than price, but I still hate losing money. I will hold on until the income puts the value of the shares above what it was when I bought it.

Last month I predicted that my dividend income might go down. I assumed that was because if there is a recession, a lot of companies would go under. I think it is just as likely to go up. If prices are higher that money has to go somewhere. I am not seeing more in my paycheck.

I still believe the basic point of last month’s essay: If you invest in a new area, you are probably going to get hosed. Invest in survivors and incumbents. You might not make as much money as whoever is lucky enough to pick this cycle’s winners, but you are less likely to get hosed.

I think anything to do with corrupt-o-currencies or NFTs is a scam and I think it should all die in a fire. It is bad for the environment. It is designed to be inefficient. If all the buttcoin miners doubled their mining capacity, the hash rate would decrease. This is something to keep in mind the next time they compare it to the rest of the financial system. Ark Investments (Cathy Woodshed’s firm) tried to debunk some buttcoin “myths”, and they addressed the energy issue. And I think they failed miserably. According to the article, Traditional banking emits 1,368 Megatonnes (Mtoe) of carbon per year and gold mining emits 144 Mtoe. Bitcoin emits 61 million Mtoe, less than 5% and 45% of traditional banking and gold mining, respectively. But what about energy costs taking into account the number of transactions? Yes, buttcoin is using far less energy overall, but then doesn’t buttcoin have fewer transactions than the traditional banking system? What is the “per-capita” energy use of Bitcoin vs traditional banking? I think the rate of a buttcoin block being validated every 10 minutes is fixed forever. So if the miners throw more capacity at the blockchain, they won’t get anymore transactions. If anybody else on the planet increases capacity, they get more output. Bitcoiners love to tout that miners are looking for more renewables energy sources. They kind of have to. And there is nothing to stop everybody else from using more renewable energy.

I hate it when buttcoin fanboys respond to the energy criticism by saying things like, “What about all the energy used for video streaming, or porn, or playing games?” Again, those servers can become more efficient in ways buttcoin cannot. Also: Gamers, streamers and “actors” are not going around claiming to be the only thing standing between humanity and tyranny. Given how things are going, tyranny seems to be winning over buttcoin. Plus: no planet, no freedom.

I am not clear exactly what the Lightning Network is; I think the idea is to make buttcoin transactions faster by doing transactions on another blockchain. I thought buttcoin is supposed to prevent double spending by putting all transactions on one chain. LN sounds like an admission of failure: “Bitcoin is great! As long as we have this totally different thing on top of it.” I think if corrupt-o-currencies can ever work as actual money that is used by Main Street, you would need to add so many layers you basically have something like what we have now.

There are also issues with keys. I don’t know how common this is anymore, but there are plenty of stories of early adopters looking for hard drives in dumpsters and landfills because those hard drives had their wallets. I know VCRs are out of date, but a lot of people had the blinking twelve problem. That is the level of technological sophistication that most people have. A no-recourse financial system is not the answer. I do not want to be the bank.

They also tried to rebut the myth associating buttcoin with crime. If you read the original buttcoin paper, the entire point was to make a payment system for non-reversible transactions. If you get scammed or have to pay a scammer with buttcoin, you will never see that money again. So crime is a bigger issue for buttcoin than the conventional financial system.

For about three decades after WWII we had strong regulation of the banks. Some of the regulations started in the Great Depression. Then Saint Ronny came along, and he started deregulating. Now things seem to keep falling apart on a regular basis. I read somewhere that Glass-Steagall was in place for 65 years, then less than a decade after repeal we had a crisis. I am sure that a lot of crypto-bros will say that regulation is not the answer, but I think that is circular reasoning. It is amazing that they have gotten people to talk about this in everyday conversation. If you can do that, then I think you can shift people’s mindset about regulation. Reducing corporate influence on government is the answer. If the crypto-bros actually replace governments and the current financial system, then THEY are The Man, and we are back where we are now.

When I read articles or tweets online buttcoin sounds like another speculative asset. “I bought at X and now it is at Y.” The world already has speculative assets. We do not need another.

And it won’t work long term as a currency anyway. There is a hard limit on the number of bitcoins (at least now there is). So when all the buttcoins are mined, prices in buttcoin will be subject to deflation. Economies stagnate in deflation. And how will the miners make money when all the coins are mined? “Transaction fees” we are told. Since prices will be going down, I predict the fees will go up. People hate paying fees.

WRT “blockchain”: The only reason anyone talks about blockchain is because after people started asking what is the point of buttcoin, we were told that the magic isn’t buttcoin itself, but the blockchain. Blockchain advocates tell us that logistics and supply chains are the killer use case for blockchains. Then why haven’t we heard more about them? There have been a lot of changes in industries (and thus their supply chains) in the past decade: incumbent auto companies making electric cars, oil and gas companies increasing fracking, utilities increasing utilization of renewable energy. New products, new components, new vendors, new supply chains. If blockchain makes it all better, surely they would be using it, and surely word would have filtered out.

I did find a few pages about Walmart Canada using blockchain with their suppliers. There is a page about it on Havard Business School’s site. The company providing the blockchain is DLT Labs. They are using a private blockchain built with Hyperledger Fabric. DLT Labs’ news page really pushes Walmart and a mining company called Teck Resources Limited. So a decade has gone by and we have two examples. I think blockchain is here to stay, but in a much smaller capacity than its advocates hoped. And even if it succeeds, it could still lead to some bad consequences. As a commenter on Hacker News put it: all the blockchain proves is that someone said they’d shipped you a box, you could still open it and find it full of rocks. If the blockchain vendors can solve that problem, now we have the building blocks for an insurmountable police state on a slowly boiling planet. (You said you were here, but we can prove you were there.) Thanks Satoshi!!

FYI: Walmart is using proof-of-stake since it uses less energy.

NFTs are proof that all of this is a solution in search of a problem. The only way to really make sense of NFTs is that you are spending money so you can say you spent money.

I don’t know if they have done this, but I can see Saturday Night Live doing a commercial for buttcoin like a pharmaceutical ad: Do you have more money than brains? Do you want to be one of those old men shaking their fists and yelling at clouds? If you answered yes to either of these questions, bitcoin might be for you.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each June from 2011 through 2022:

Month	YTD	Amount	3MMA	12MMA
2022-06	$5703.41	$3154.20	$1190.56	$999.37
2021-06	$4662.40	$2162.36	$861.08	$899.68
2020-06	$4407.77	$1957.12	$778.78	$885.91
2019-06	$4251.15	$2244.44	$959.55	$753.16
2018-06	$2185.04	$863.49	$319.68	$551.12
2017-06	$3108.53	$761.91	$539.42	$536.73
2016-06	$2744.28	$684.76	$464.00	$483.42
2015-06	$2415.32	$612.21	$411.83	$409.95
2014-06	$1933.90	$522.86	$333.10	$320.58
2013-06	$1492.72	$351.48	$257.79	$291.91
2012-06	$1574.81	$305.84	$260.85	$276.29
2011-06	$1351.34	$236.50	$235.38	$203.23

Here are the securities and the income amounts for June, 2022:

• Global X S&P 500 Covered Call ETF: $50.88
• Vanguard Total Bond Market ETF: $150.74
• Vanguard Total International Bond ETF: $9.51
• SPDR S&P Dividend ETF: $830.85
• SPDR Dow Jones REIT ETF: $115.70
• SPDR Dow Jones REIT ETF: $230.37
• SPDR S&P Global Dividend ETF: $1468.04
• Vanguard Utilities ETF: $248.92
• Global X S&P 500 Covered Call ETF: $49.19

 

Big Jim verified this article with an algorithm called Proof of Jim.

13-th century fresco by Manuel Panselinos (aka Μανουήλ Πανσέληνος); image from Wikimedia, assumed allowed under public domain.

Here is the dividend income report for May, 2022.

The monthly dividend income came out to $151.63. The yearly income total for 2022 through the end of the month was $2549.21.

The income for May, 2021 was $160.93, and the yearly income for 2021 through the end of May was $2500.04.

I did not buy or sell anything this month. I placed an order for more RWR that got filled faster than I anticipated.

The stock market is down, inflation is up, and a lot of people are predicting disaster. A lot of people are predicting a depression.

The problem is there are a lot of people predicting depression all the time. Then when things start getting shaky (like now), they think they are vindicated. Despite spending more time being wrong than being right. I don’t know what will happen. But I don’t think we will have a depression. I don’t think the boom times will be back soon. Some companies will go under. Some people will lose their jobs.

But some companies will still be making money. And they will still pay dividends. And some will keep increasing their dividends. Just like during the dot-com boom and bust. Just like during the Great Recession. Just like during the Coronavirus crash. Granted, I might be wrong this time. I know people love to say past performance is no guarantee of future results (even though past performance is usually their argument), but it does feel like the same thing over and over again. History does not repeat, but it rhymes.

Perhaps my dividend income will go down. Perhaps I will lose my job. But I have been through this cycle before. In the mid-2000s, first people told me I was stupid for not buying a house. Then they wanted me to buy their house. This time you were dumb if you did not buy the cash-burning unicorns or corrupt-o-currencies. When will people learn that relying solely on price is a game of musical chairs?

There is a line that Jeff Bezos has used a few times: Instead of asking what will change in 10 years, ask what will not change in 10 years (links here and here). Wise words, but a bit odd coming from a guy who builds rockets and made a bookseller into the largest cloud computing provider. What has not changed is that it is better to invest in companies that have a consistent cash flow stream that they share with investors in the form of dividends. I do not think that buybacks actually return cash to shareholders; they only do if your shares are bought. And companies tend to borrow for buybacks, and buy when the price is high. I have no idea why they keep doing this. There is a lot of cargo culting in Corporate America.

Granted, Amazon and Bezos also do a lot of things I disagree with: Buybacks, not paying workers well when your largest shareholder is a billionaire stupid enough to let a women as beautiful as Mackenzie Scott get away. (Advice to Jeff Bezos: You’re short, you’re bald, you have one eye bigger than the other, and you have an image as a greedy asshole, so watch your money carefully and be nicer to Charo if she becomes wife #2; also: you’re supposed to leave your wife for a younger woman, dipstick).

There is nothing wrong with taking some advice from someone and ignoring other things they say. One of the first authors who turned me on to the idea that you should focus on cash flow and not capital gains was Robert Kyosaki in Rich Dad, Poor Dad. Granted, he also pushed silver and putting everything into a shell company in that book. There is an analysis of Rich Dad, Poor Dad by they third-most-famous John Reed (not the Senator, and not the CEO of Citibank, but the other one). John Reed #3 got sucked into the whole “Obama will make us Weimar Germany” BS, so take him with a grain of salt as well. In fairness, if you can show Mr Reed #3 he is wrong about something, he does seem like the type of guy who would admit to being wrong.

I do not know much about real estate. I defer to Mr Reed #3 on that. I remember Kyosaki’s advice about using a corporation to shield your assets seemed shady. I do not remember if I had any opinion on the rest of RK’s book, but it did not make me want to get involved in real estate. In fairness, the notion of investing in stocks solely for capital gains was (and is) so entrenched in our culture, that even coming from a con man it is a revelation. I think RK is right about this point. (Mr. Reed #3 says that RK changes his story a lot.) I also came across the idea of investing for cash flows and not price appreciation in an article from Motley Fool that I have mentioned before on this site: The Secrets of 9-Figure Fortunes.

Back to what Bezos said about what hasn’t changed in 10 years: I think we will see the same cycle as before. People who think it’s all about finding someone else to hold the bag will get hosed. Meanwhile, most companies that pay dividends will continue to do so.

While this site does have a disclaimer, I think anyone can build some wealth slowly over time. It is the people who promise quick riches who can get you into trouble. Stick to profitable companies with cash flow. Leave the sexy stuff to people with money to lose. Forget about “disruption”. Who keeps telling us that we should invest in “disruptive” companies? The VCs. For these companies, our “investing” is the VCs cashing out. The same people who pushed internet companies that didn’t make any money 20 years ago. Who have been pushing “unicorns” for the past decade that haven’t made any money. And now they are pushing corrupt-o-currencies, blockchain and NFTs on everyone. They push companies that do not make any money, and tell the rest of us that the world has changed and “you just don’t get it”. Then it all comes crashing down, and it turns out we did get it.

The problem with investing in disruption is not all the disruptors last or make money. Some of them become the new incumbents, and eventually do make money. Incumbents tend to stick around for a long time. Let the market tell you where the money is.

Look at the dot-com boom and bust. Except for Amazon and eBay, most of the companies that everybody thought were going to change the world went bust or got bought by someone bigger. The real change from the dot com boom wasn’t the “new economy” web companies displacing existing corporations; the change was that existing corporations learned to be more efficient using the web.

If corrupt-o-currencies become mainstream (which I think is highly unlikely), they will not displace banks. They will be absorbed by banks.

Andreeson Horowitz (aka “a16z” amongst the cool kids) are backing a crypto startup with Adam Neumann, known for one of the biggest pre-IPO blow-ups of all time. VC, crypto, greenwashing and a con man: It’s like they are trying to sweep Asshole Bingo in one move. If they could incorporate SPACS, Cathy Woodshed, Uber and Facebook they could cause a Fraud Singularity that would open a rift in the space-time continuum that could revive Bernard Madoff and put Enron back together. An article on Coindesk notes that the a16z/Neumann deal may have happened before the world starting cracking apart, but isn’t the whole selling point of VCs that they can see around corners? (Additional articles on TechCrunch here and here.)

Also: We have rising interest rates, rising inflation, a sinking stock market, supply chain chaos, conflict in Europe, and just about everybody thinks a recession by the end of the year is more likely than not. Isn’t this the sort of environment in which corrupt-o-currencies should be soaring? Yet they are not. Even with all the bad news, “Bitcoin at $1 million” sounds and feels like “Gold at $5000” did in the 2000s.

What won’t change in ten years? The S&P Composite 1500 will still be around, filled with companies that meet the “financial viability” criteria, and VCs will be pushing garbage. If you want to invest in a new industry, wait until after the crash and invest in the survivors. As Ron DeLegge pointed out, the point of investing is to make money. Not to have fun, or because it’s educational. Not for the memes or the lulz. But to have more money in your pocket, especially when the hype comes crashing down.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each May from 2011 through 2022:

Month	YTD	Amount	3MMA	12MMA
2022-05	$2549.21	$151.63	$750.34	$916.72
2021-05	$2500.04	$160.93	$742.94	$882.58
2020-05	$2450.65	$179.08	$747.49	$909.85
2019-05	$2006.71	$150.95	$592.51	$638.08
2018-05	$1321.55	$44.66	$398.51	$542.66
2017-05	$2346.62	$531.68	$553.90	$530.30
2016-05	$2059.52	$436.85	$479.79	$477.37
2015-05	$1803.11	$361.99	$411.92	$402.51
2014-05	$1411.19	$280.01	$304.77	$306.30
2013-05	$1141.24	$242.65	$260.91	$288.11
2012-05	$1268.97	$258.15	$257.13	$270.51
2011-05	$1114.84	$266.55	$233.03	$194.61

Here are the securities and the income amounts for May, 2022:

• Vanguard Total Bond Market ETF: $143.12
• Vanguard Total International Bond ETF: $8.51

 

Big Jim might be wrong, but he’s not asking for your money.

Fresco of the Annunciation in the Saint Sophia Cathedral, Kyiv ; image from Wikimedia, assumed allowed under public domain.

Here is the dividend income report for April, 2022.

The monthly dividend income came out to $265.84. The yearly income total for 2022 through the end of the month was $2397.58.

The income for April, 2021 was $259.95, and the yearly income for 2021 through the end of April was $2339.11.

I sold RLI. I spent about $2500 total, and when I sold I got about $12K. I had already sold about $3K in 2019, so I was “playing with the house’s money” (as Cramer would put it).

I think I will use that money to buy a commodities fund. There are not too many that pay dividends. I made a list of the broad commodities from the ETF.com commodities channel, and find one that pays a good dividend. But as I was looking through the pages for the S&P Indices, I thought perhaps there is one for commodities that I could look at. I will look into the S&P GSCI Dynamic Roll index. The corresponding ETF is COMT, the iShares GSCI Commodity Dynamic Roll Strategy ETF. It paid quarterly up through 2018. Since then, it has only paid dividends in December. In 2019, it paid $0.857 a share. In 2020, it paid $0.096 a share. In 2021, it paid $5.494 a share.

I will also look into looking at AAM S&P 500 High Dividend Value ETF (NYSE:SPDV). It is follows the S&P 500 Dividend and Free Cash Flow Yield Index. It has not had a lot of capital appreciation, but it does pay a monthly dividend.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each April from 2011 through 2022:

Month	YTD	Amount	3MMA	12MMA
2022-04	$2397.58	$265.84	$774.77	$917.50
2021-04	$2339.11	$259.95	$750.24	$884.09
2020-04	$2271.57	$200.13	$753.19	$907.51
2019-04	$1855.76	$483.26	$588.35	$629.22
2018-04	$1276.89	$50.88	$405.77	$583.24
2017-04	$1814.94	$324.66	$532.02	$522.40
2016-04	$1622.67	$270.38	$461.86	$471.14
2015-04	$1441.12	$261.30	$409.21	$395.68
2014-04	$1130.58	$196.43	$323.64	$303.18
2013-04	$898.59	$179.23	$262.82	$289.40
2012-04	$1010.82	$218.56	$274.05	$271.21
2011-04	$848.29	$203.10	$216.30	$179.46

Here are the securities and the income amounts for April, 2022:

• Vanguard Total Bond Market ETF: $140.65
• Vanguard Total Bond Market ETF: $60.12
• Vanguard Total International Bond ETF: $8.59
• Global X S&P 500 Covered Call ETF: $56.48

 

Big Jim is slowly completing the picture.

Painting “The Fire at Night” by Francisco José de Goya y Lucientes, aka Goya (1746-1828); image from The Goya Foundation, assumed allowed under public domain.

 

Here is the dividend income report for March, 2022.

The monthly dividend income came out to $1833.54. The yearly income total for 2022 through the end of the month was $2131.74.

The income for March 2021 was $1807.93, and the yearly income for 2021 through the end of March was $2079.16.

I decided to sell Gladstone Land (LAND). The income was not growing that much, and the price was rising so high that I was not getting as many shares per quarter as I would like. I also bought more SPDR Dow Jones REIT ETF (RWR) after not having any for about almost two years. I sold during the Coronavirus crash, and I should have held on. I think I put too much emphasis on wanting my income to be less lumpy and having most of it in the “C” months and having more in the “A” and “B” months, but I think for the near future I should stick with ETFs. My income took a big jump when I went to ETFs from individual stocks.

I am also considering selling RLI. It was one of the first stocks I bought in 2010. I am not clear why I held onto it; perhaps because it is an insurance stock. They pay a dividend every quarter; they also pay a special dividend every December. The amount of the special dividend varies, and this has caused the income from RLI to fluctuate. I may use the funds to add to an ETF, or I might buy an individual stock with more consistent income.

The income for WDIV was not that great. I am not too worried for the moment. I looked at State Street’s ETF distribution history page, and it is not uncommon for WDIV to have low payouts in March.

Last month I wrote about looking into some ETFs related to gold and covered calls. I might put that off for a while. I am looking into some commodity ETFs. I am trying to see if I can hew more closely to Ron DeLegge’s framework. One issue is that most commodity ETFs do not pay dividends, and those that do only pay in December.

I might just go with ETFs for a while and let it all ride. I have a lot on my mind these days. I really really really really really hate my job and have no respect for the people I work for. I am also starting to lose respect for a lot of other people; everybody just makes jokes about how badly the project is run. I would like to get a job in something totally different, but in order to lear it well enough I would need to stop working.

I might write something up about why I think investing for dividends is better than investing for capital gains (and why buybacks are evil and only stupid people think they are a good idea). Earlier this month, I looked at the factsheet for one of the S&P Dividend Aristocrat indices, and I found this gem: Since 1926, dividends have contributed nearly a third of total equity return while capital gains have contributed two-thirds. So why focus on dividends if it is only one-third of the return? For one thing, stocks that do not pay dividends are missing out on part of the return; if a stock has had a lot of capital appreciation, why should someone else buy it from you? One problem with capital gains is you can only sell once. Another thing: the one-third from dividends is more stable that capital gains. And you don’t have to do much work figuring out which companies pay those dividends.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each March from 2011 through 2022:

Month	YTD	Amount	3MMA	12MMA
2022-03	$2131.74	$1833.54	$710.58	$917.01
2021-03	$2079.16	$1807.93	$693.05	$879.10
2020-03	$2071.44	$1863.26	$690.48	$931.10
2019-03	$1372.50	$1143.33	$457.50	$593.19
2018-03	$1226.01	$1099.99	$408.67	$606.06
2017-03	$1490.28	$805.35	$496.76	$517.88
2016-03	$1352.29	$732.13	$450.76	$470.38
2015-03	$1179.82	$612.48	$393.27	$390.27
2014-03	$934.15	$437.87	$311.38	$301.75
2013-03	$719.36	$360.85	$239.79	$292.68
2012-03	$792.26	$294.68	$264.09	$269.92
2011-03	$645.19	$229.43	$200.06	$163.15

Here are the securities and the income amounts for March, 2022:

• Global X S&P 500 Covered Call ETF: $54.11
• Vanguard Total Bond Market ETF: $130.67
• Vanguard Total International Bond ETF: $7.82
• RLI Corp: $26.91
• SPDR S&P Dividend ETF: $839.47
• SPDR Dow Jones REIT ETF: $75.65
• SPDR S&P Global Dividend ETF: $411.99
• Vanguard Utilities ETF: $230.25
• Global X S&P 500 Covered Call ETF: $56.67

 

Big Jim’s plan is to stick to the plan.

Image of Ladder of the Divine Ascent, a 12th century icon at Saint Catherine’s Monastery, image assumed allowed under public domain.

Here is the dividend income report for February, 2022.

The monthly dividend income came out to $224.92. The yearly income total for 2022 through the end of the month was $298.20.

The income for February 2021 was $182.83, and the yearly income for 2021 through the end of February was $271.23.

Over the past few months I have mentioned that I am thinking about buying some shares in individual stocks again. I had to move hosts and go through some posts to update the image links, and I re-read some posts about individual stocks vs ETFs. The reasons I went to ETFs was that it was less work to keep track of in general, companies can make things more complex by doing mergers or spin-offs, and they will sometimes try to buy out shareholders with less than 100 shares at less-than-market prices. The advantages of individual stocks was that generally the income increased every quarter, while for ETFs (even ETFs based on DGI indexes) the income is variable.

I downloaded the dividend history for SPDR S&P Dividend ETF (SDY) from December of 2005 to 2020, and plotted the four-quarter moving average. It started at $0.30 in 2005, peaked at $0.50 in 2009, went down to $0.40 in 2010, and had some ups and downs until getting to about $0.83 in 2021. Not as much of a straight line as it is for, say, VZ, but still growth.

I also did the same for Vanguard Total Bond Market ETF (BND) for as long as I have had it (State Street gives the full distribution history for its funds; as far as I can tell, the supposedly investor-friendly Vanguard only gives about a year and a half). It went up from about $0.15 to about $0.20, and then gradually down to $0.14 again. I have more shares, but I am getting less income.

I am also considering another covered call exchange-traded product. I may not actually get any of these for a while since this involves a LOT of reading.

For some background: I just listened to an episode of the Index Investing Show from 2020 where he talked about why holding GLD (SPDR Gold Shares) is better than buying bullion. You do not have to deal with storage, insurance or commission fees. He also mentioned you can generate income by selling covered calls on GLD.

One issue w/covered call strategy outside of ETFs/ETNs and using the product yourself is that your shares can get called away. Ron DeLegge said this has happened with his ETF Guide Premium Covered Call portfolio strategy. I guess that’s a fact of life, and it is not the end of the world. But then in order to continue, you have to go out and buy more shares in the underlying securities (presumable at a higher price than when you originally bought them). I think using ETFs that execute covered call strategies removes this potential burden.

I am looking at an ETF (exchange traded fund) and an ETN (exchange traded note) that sell covered calls on GLD.

An interesting fact about GLD: as far as I know, it is the only ETF with its own website. It also has a page on the State Street Site.

The ETF is the FT Cboe Vest Gold Strategy Target Income ETF (IGLD), offered by a company called First Trust. According to the summary prospectus, a lot of the work is done by a sub-advisor called Cboe Vest.

The ETN is the X-Links Gold Shares Covered Call ETN (GLDI) by Credit Suisse. It follows the Gold FLOWS 103 Index, which I think Credit Suisse made up. If the company running the fund also made the index, is the ETN really passive?

I have to read more through all the docs, but I think the general state is: GLD holds gold bullion in vaults, GLDI holds GLD and sells covered calls with a strike price 3% above the then-current price, and IGLD holds treasury bonds and sells different types of options on GLD without holding GLD itself.

GLDI is an ETN, and I need to look into how ETNs are different than ETFs (start with articles here and here). I think the basic differences are that ETNs have better tax treatment, and they are notes and depend more on the solvency and financial health of the issuer, which ETFs are all legally separate vehicles; in other words, there are different ways you can lose money. I don’t think Credit Suisse is going bust anytime soon. I have never heard of First Trust until now. Since I will do this in an IRA account, I don’t think that the tax differences will matter.

I will have to read the documents for the ETFs and the ETN before making a decision. I should probably go through GLD first, then IGLD, then GLDI. The methodology for the Credit Suisse Nasdaq Gold FLOWS 103 Index is 22 pages. The prosectus for GLD is 36 pages, which up until I had opened it was the longest prospectus I had seen for a single fund (some fund families will have prospectuses for multiple funds in one document). The prospectus for GLDI is 189 pages. That is longer than some annual reports. Usually they are a lot of verbiage explaining that you are on your own and listing all the theoretically possible ways your money could go up in smoke. But this is by far the longest one I have seen.

I also plan on going through a list of commodity ETFs from ETF.com. Perhaps one of them pays a consistent dividend, and I can be closer to the ideal put forth by Ron DeLegge. He has said a lot of people are missing commodities. I do not want to invest in anything without a decent cash flow, and most commodity ETFs have no cash flow. There are a few that do covered call strategies, but not for too many commodities. There are a couple for GLD, and Credit Suisse has one for silver and one for crude oil. The price on the oil ETN took a dive, as did the distribution (which are called “coupons” for ETNs): from $3.68 in 2019 to $1.06 in 2021. I have not been able to find any covered call ETFs for anything agricultural or the overall commodity sector.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each February from 2012 through 2022:

Month	YTD	Amount	3MMA	12MMA
2022-02	$298.20	$224.92	$1235.58	$914.87
2021-02	$271.23	$182.83	$1253.94	$883.71
2020-02	$208.18	$196.17	$1259.50	$871.11
2019-02	$229.17	$138.45	$847.72	$589.58
2018-02	$126.02	$66.43	$654.60	$581.51
2017-02	$684.93	$466.05	$570.90	$511.78
2016-02	$620.16	$383.08	$524.89	$460.41
2015-02	$567.34	$353.85	$492.40	$375.72
2014-02	$496.28	$336.61	$363.62	$295.33
2013-02	$358.51	$248.39	$348.20	$287.16
2012-02	$497.58	$308.90	$337.51	$264.48

 

Here are the securities and the income amounts for February, 2022:

• Global X S&P 500 Covered Call ETF: $53.26
• Vanguard Total Bond Market ETF: $137.97
• Vanguard Total International Bond ETF: $10.62
• Gladstone Land: $23.07

Big Jim likes investments that do the work for him.

Some terms in this post are trademarks of Credit Suisse, First Trust, State Street Global Adivisors, and possibly other entities.

Here is the dividend income report for January, 2022.

The monthly dividend income came out to $73.28. The yearly income total for 2022 through the end of the month was $73.28.

The income for January 2021 was $88.40, and the yearly income for 2021 through the end of January was $88.40.

So far there is not much to tell. I am getting back into listening to some conference calls and taking notes in Org Mode. I plan on buying a REIT that pays monthly in the next few weeks.

When I first went to ETFs, there was not much income in January since bond funds do two payouts in December. That is starting to change for me with LAND and XYLD.

I tend to let podcasts pile up, and sometimes have years of archives to go through when I change podcasts. Now I am listening to The Index Investing Show with Ron DeLegge. I am now in April of 2020. It looks like he ended the podcast. I have not listened to the last episode in full, so I do not know if he will continue it elsewhere. He has another site: ETF Guide, and a YouTube channel. I did briefly listen to the beginning of the last episode, and he hinted that the Index Investing Show might continue on YouTube, but so far I only see the ETF Guide channel, and that channel does not have a video about the Index Investing Show.

In one of the episodes I listened to, he mentioned that everyone should have a written investment policy statement. I said a few years ago I would write one, and so far I have not. I added it in my ever-growing to-do list in my Org file.

One of his videos on the ETF Guide channel was an ETF battle: It was JEPI (JPMorgan Equity Premium Income ETF) vs SCHD (Schwab US Dividend Equity ETF) vs XYLD (Global X S&P 500 Covered Call ETF). SCHD won the battle due to cost and performance. I don’t think SCHD fits with the other two. It is just a standard stock ETF focusing on dividend stocks. The other two invest in large-caps stocks and sell options. JEPI has lower cost, but it is JP Morgan, and frankly I do not want to give those bungholes any more of my money. I think the reason JEPI has lower costs is because it has more assets and JP Morgan is a bigger company. Also it is actively managed, and I prefer index funds. XYLD uses the CBOE S&P 500 BuyWrite Index, which I grant is pretty obscure (methodology here).

On the Index Investing Show, Ron DeLegge often talks about the ETF Guide Premium newsletter. They have monthly income trades. They sell covered calls on 2 ETFs: SPDR S&P 500 (SPY) and SPDR Gold Shares (GLD). Sometimes they have a third. I got a free sample of the newsletter, and I think that XYLD can yield the same amount with less effort.

When I was living in Chicago, I knew a lot of people who worked in trading. One guy was thinking about applying for a job at one of the exchanges, and he got some pamphlets explaining derivatives. One of them said something to the effect of, “If this all sounds like legalized gambling, that is because it is.”

As I understand the covered call strategy, you are placing a bet that the stock will stay below a certain price (known as the “strike price”). You are selling an option, or “writing a call”. The other party pays you a premium to buy the option. If the stock prices is above the strike price at the expiration date, the buyer of the option can compel the seller of the option to give the buyer their stock. (Someone told me the difference between options and futures is that futures must be exercised, while options do not, which is why options are called “options”.) If the stock is below the strike price at the expiration date, nothing changed hands and the buyer keeps the premium. Many parties buy options as a form of insurance, and most expire worthless, allowing the seller of the option to keep the premium. Per the index methodology doc, the index writes 2% out-of-the-money call options expiring in the next month.

So far XYLD is working out well for me. Like all the other ETFs, the dividend amount is inconsistent.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each January from 2012 through 2022:

Month	YTD	Amount	3MMA	12MMA
2022-01	$73.28	$73.28	$1215.96	$911.36
2021-01	$88.40	$88.40	$1258.54	$884.83
2020-01	$12.01	$12.01	$1236.27	$866.30
2019-01	$90.72	$90.72	$818.52	$583.57
2018-01	$59.59	$59.59	$819.32	$614.81
2017-01	$218.88	$218.88	$584.54	$504.86
2016-01	$237.08	$237.08	$550.81	$457.97
2015-01	$213.49	$213.49	$471.54	$374.28
2014-01	$159.67	$159.67	$335.67	$287.98
2013-01	$110.12	$110.12	$348.07	$292.20
2012-01	$188.68	$188.68	$316.66	$256.77

 

Here are the securities and the income amounts for January, 2022:

• Global X S&P 500 Covered Call ETF: $50.25
• Gladstone Land: $23.03

 

Big Jim’s year is starting out pretty well.

Painting of Last Judgement in the Arena Chapel in Padua by Giotto di Bondone (1267 – 1337); assumed allowed under public domain.

Here is the dividend income report for December, 2021.

The monthly dividend income came out to $3408.55. The yearly income total for 2021 through the end of the month was $10951.48.

The income for December 2020 was $3490.60, and the yearly income for 2020 through the end of December was $10541.51.

I had a big jump in my yearly income in 2019 over 2018 after I switched from individual stocks to ETFs. It was about 30%. I know that jumps that big will not happen too often, but since then it seems like my income is stagnant. Granted, a lot of companies were hit by COVID in 2020, but still it seems like things have stalled out. Perhaps as the world gets used to COVID the increases will continue. I hope there are some bigger increases soon. I only have about 10 years to set myself up for the next 10 years after that (or 20 or 30).

I am realizing you need a lot of assets to have a decent cash flow. I read a blog post using Warren Buffett’s stake in Coca-Cola to show how great DGI is. The kicker is that he has 400 million shares. I can’t afford 400 million shares of anything decent. Maybe I need to get an account on a DGI forum and connect with other people at my level. My 100 shares of RLI giving me $8/month will not keep my out of the poorhouse.

I am thinking of putting some more money into individual stocks again. I know I stopped because it was a lot of work keeping track of all of those stocks (I use both GnuCash and a spreadsheet to track all of this), but I really really really like some securities with income that only increases (barring dividend cuts). Again, maybe this is obvious to everyone like me, but I am not clear why some dividend ETFs do not have consistently rising income. I can see why for WDIV, since foreign companies do not pay consistent amounts from quarter to quarter. But since American companies do pay more consistent amounts, I do not understand why SDY is so variable. I get that some companies get dropped from the index, but I think that happens once a year. Perhaps it is because people can buy and sell ETFs anytime. But still, while individual stocks are more work, I would like a some more predictability in my income, especially since the point of all of this is to have income in the future when I am no longer working.

I would also like to buy some that pay in the “A” or “B” months, since the “C” month is already the biggest month. A lot of companies and just about all ETFs pay in “C” months. That being said, I have the fact that sometimes Vanguard ETFs miss the “C” month and pay in the next “A” month.

I am considering getting an account with Morningstar or Yahoo Finance to look at individual stocks. Or figure out how to calculate payout ratios myself. I know there are a lot of DGI bloggers who start paid newsletters analyzing stocks. I find that a depressing trend. Isn’t DGI enough? There are about 4700 stocks traded on the NYSE and the NASDAQ. There are about 700 in the Dividend Champions spreadsheet. You have already eliminated 85% of the stocks on the market with DGI. How many newsletters do you need to do DGI? How much guidance does a DGI investor need? Perhaps joining one of the free forums is all you need to do.

One thing I have wondered is if there is a term for companies that have increased their dividend for less than 5 years. If we are going to stick with words that start with “C”, perhaps “Dividend Children”. Granted, companies that have 50+ years are “Kings”, so perhaps “Trainees” is a good word. Or if we want to stick with the “K” sound, “Qualifiers”.

I plan on buying some shares in REITs that pay monthly: O, STAG, or both. Then I will look at other stocks.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each December from 2011 through 2021:

Month	YTD	Amount	3MMA	12MMA
2021-12	$10951.48	$3408.55	$1346.62	$912.62
2020-12	$10541.51	$3490.60	$1294.16	$878.46
2019-12	$10515.13	$3611.13	$1343.15	$876.26
2018-12	$6971.76	$2313.99	$1165.08	$580.98
2017-12	$7536.98	$1837.78	$913.40	$628.08
2016-12	$6076.53	$1027.76	$605.28	$506.38
2015-12	$5472.07	$954.52	$575.86	$456.01
2014-12	$4438.02	$909.86	$481.67	$369.80
2013-12	$3406.20	$594.59	$344.05	$283.85
2012-12	$3585.01	$686.10	$386.41	$298.75
2011-12	$3091.99	$514.94	$323.40	$253.92

 

Here are the 2020 and 2021 amounts for the securities that I own, with the difference. There might be a couple of arithmetic errors, but I think it is pretty accurate. It shows that the big culprits for the lackluster growth are the bond funds and WDIV:

Security	2020 Income	2021 Income	YOY Change
BND	2049.06	1796.86	-252.20
BNDX	140.71	453.20	312.49
LAND	0	204.55	204.55
RLI	201.61	315.22	113.61
SDY	3125.98	3616.80	490.82
VPU	940.53	943.49	2.96
WDIV	3556.01	3080.13	-475.88
XYLD	0	473.24	473.24
Sold	527.61	67.99	-459.62
Total	10541.51	10951.48	409.97

 

Here is a table of the number of Dividend Champions, Contenders, Challengers, and a total of all three for each January from 2011 to 2022. I think there are a few errors in the 2022 table; I will contact the people who made it (they list DTE which cut its dividend, and removed ETN, which did not; the 2021-12 table was correct for those companies, and there might be a few other issues with their first 2022 table). This table is also on this site on the main dividends page.

Year	Total	Champions	Contenders	Challengers
2022	708	127	302	280
2021	729	139	308	282
2020	866	138	265	463
2019	864	131	205	528
2018	822	115	220	487
2017	768	108	227	433
2016	753	107	250	396
2015	611	106	246	259
2014	476	105	210	161
2013	458	105	183	170
2012	448	102	146	200
2011	447	99	141	207

 

Here are the securities and the income amounts for December, 2021 (in December, some securities have multiple payouts):

• Global X S&P 500 Covered Call ETF: $39.74
• Vanguard Total Bond Market ETF: $135.69
• Vanguard Total International Bond ETF: $7.45
• RLI Corp: $211.09
• RLI Corp: $26.39
• Vanguard Utilities ETF: $240.27
• SPDR S&P Dividend ETF: $1044.31
• SPDR S&P Global Dividend ETF: $1051.93
• Vanguard Total Bond Market ETF: $141.88
• Vanguard Total Bond Market ETF: $130.95
• Vanguard Total International Bond ETF: $275.29
• Vanguard Total International Bond ETF: $1.30
• Vanguard Total International Bond ETF: $79.31
• Gladstone Land: $22.95

 

Big Jim knows that the commandment that your second derivative must always go up will be the death of us all.

Painting by Alberto Sotio, 12th-century Italian painter; image from Wikimedia, assumed allowed under public domain.

Here is the dividend income report for November, 2021.

The monthly dividend income came out to $166.06. The yearly income total for 2021 through the end of the month was $7542.93.

The income for November 2020 was $196.63, and the yearly income for 2020 through the end of November was $7050.91.

I have not started using Org Mode to take notes on conference calls. I am still going through all of the notes I have collected on various topics throughout the years. Some of them will show up as insightful and profound posts on this blog. If any of the fit ladies out there are sapiosexuals, this blog is your one-stop shop for everything you need.

The interest income is still declining, but I think it may have bottomed out. I still think a big factor in the inflation we are seeing is trade routes being disrupted: People started buying more stuff from China, so transit across the Pacific is more profitable than other routes. A lot of people think it is all “money printing”. There was a lot of “money printing” after the Great Financial Crisis. While it impacted asset prices (and things Paul Singer can afford that I cannot), I do not recall prices at the grocery store going up. I am not saying money printing has no effect, but the people saying so this time sound like (and in many cases are) the same people who priedicted disaster the last time. If all these bozos who think the Federal Reserve and the federal government are the source of all the world’s problems, perhaps they can explain why big chunks of the private sector cannot figure out a way to make money other than playing financial games (like stock buybacks). If you think the private sector is the solution to every problem, then stop blaming everything on the government.

As a commenter on Hacker News put it in 2016: “Indeed – as Krugman keeps going on about, there’s little risk of ‘classical’ inflation. What there is is a lot of complaining from the rentier class (and some of the better off pensioners) that they can’t make 4% for doing nothing any more.”

At least this time nobody is comparing the USA to Weimar Germany or Zimbabwe. Which is ironic, because this time inflation is worse than it was a decade ago. So maybe some of these conservative bozos are slowly learning something. I think if the shipping industry can get things sorted out, things will get better (although I am sure that there is probably some manipulation going on as well). One of the things I have noticed while cleaning my notes up in my migration to Org is that I have a lot of sites flagged as potential economic indicators and a lot that are news sites about specific industries. I will be on the lookout for some about the shipping industry.

I think the Fed should raise interest rates. It would lower stock prices and PE ratios (which is good for a dividend investor), force companies to figure out how to make money in their nominal industries, kill companies that should not be living, and probably kill a lot of cryptocurrencies.

I really really really really really hate my job and I am thinking about quitting and learning technology that interests me. I have some money saved up. I don’t know how bad inflation will get, but I should have enough for about a year and a half, maybe two and a half. If I leave, my 301K can be moved to my Roth IRA, and I will start getting a lot more money each month. Maybe I already do have enough to retire.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each November from 2011 through 2021:

Month	YTD	Amount	3MMA	12MMA
2021-11	$7542.93	$166.06	$824.63	$919.46
2020-11	$7050.91	$196.63	$742.84	$885.10
2019-11	$6904.00	$126.48	$843.65	$768.17
2018-11	$4657.77	$50.86	$562.56	$541.30
2017-11	$5699.20	$560.60	$559.31	$560.58
2016-11	$5048.77	$506.98	$502.98	$500.27
2015-11	$4517.55	$460.83	$477.55	$452.28
2014-11	$3528.16	$291.27	$357.30	$343.53
2013-11	$2811.61	$252.75	$277.74	$291.48
2012-11	$2898.91	$247.99	$262.78	$284.49
2011-11	$2577.05	$246.37	$232.84	$240.81

Here are the securities and the income amounts for November, 2021:

• Vanguard Total Bond Market ETF: $134.58
• Vanguard Total International Bond ETF: $8.57
• Gladstone Land: $22.91

 

Big Jim has many thoughts, and they are very deep.

Painting by the Master of San Martino, made between 1270 and 1290, hanging in National Museum of San Matteo, Pisa, image from Wikimedia, assumed allowed under Public Domain.