Investors are particularly attracted to dividend stocks, especially those offering ultra-high monthly yields, as they deliver substantial income and total return potential. Total return encompasses dividends, interest, capital gains, and asset appreciation. However, while recent covered call Exchange Traded Funds (ETFs) like YieldMax promise large dividends, they also carry significant risks, including potential losses in asset value that could diminish total returns. Therefore, investors should weigh the advantages of high yields against these risks when considering such funds in their portfolio strategy.
Investors are drawn to dividend stocks for their potential to provide substantial income streams and total return, which combines dividends, interest, and capital gains.
YieldMax funds utilize covered call strategies to provide high yields, but investors should be cautious due to the inherent risks such as asset value declines.
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