PFFA - 2 Magnificent Funds To Generate Passive Income

2024-06-10 07:35:00 ET

Summary

• $7.1 trillion is invested in passive ETFs, rocking the market with their inflows and outflows.
• Few passive ETFs help you achieve specific goals.
• We look for options to meet our income needs for a lifetime.

Co-authored by Treading Softly

Passive market-wide ETF investing has been both a massive benefit and a massive disaster. Today, there is over $7.1 trillion invested in various passive market ETFs . This has caused holdings that are within various indices to become extremely overvalued compared to their historical norms. This has also allowed millions of Americans to enjoy the benefit of the rising stock market. But the question often becomes, is the value rising because the companies are worthwhile, or simply because investors are blindly placing more money into these passive market ETFs? Academics on both sides have argued for various reasons why either or both could be true.

I use my unique Income Method as the lens through which I view the market. I love receiving passive income, but most passive market ETFs do not provide the income I seek. You would have to own them and then liquidate your shares to unlock any sort of usable returns. Unrealized gains are not an actual return until they've been realized. This is why the tax man doesn't come after them today because it can vanish just as quickly as it appeared....

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