XYLG - JEPI: Forget The Hype It Is Good But Not Great

2024-01-29 11:04:35 ET

Summary

• JEPI is not a bad ETF, but it and its peer group (covered call ETFs) are overrated by investors. And the cracks are starting to show.
• Extended down markets that don't immediately get back up are a risk to these ETFs not fully understood by many investors.
• I rate JEPI a Sell. There's a strong chance it will disappoint investors over the next few years, as the weakness of such funds get exposed by rougher markets.

I'm that guy. That guy who looks at what everyone else seems to consider a "no-brainer" investment, and my first reaction is "are they sure?" To me, investment management is risk management, period. First, you avoid big loss, then you make as much as you possibly can, in terms of sustained total return (appreciation plus income).

In 30 years of professional investing, that simple 2-part rule has not made me the highest returner in the crowd, but it has kept me out of big trouble. And since the investment industry and media are filled with more hype, distractions, bravado and testosterone than ever, I find that the closest I can get to being comfortable as an investor is to keep going back to that simple guideline....

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