Don’t Let This Absurdly Big Dividend Ruin Your Retirement

Old cracked sidewalk broken and dangerous cement symbol of no retirement failed system
Every so often, we get questions from readers about investments sporting yields that are, frankly, ridiculous.
Case in point: The 85% forward yield (as of this writing) on a fund called the YieldMax Ultra Income Strategy ETF (ULTY): Eighty. Five. Percent.
Think about that for a second: With a 85% yield, you’re getting your entire upfront investment back in about a year. Pretty sweet deal, right?
Well, not so fast.
Before I go further, I should say that when it comes to dividends, one thing we demand at my Contrarian Income Report advisory is that a stock or fund at least “returns its yield.” We target dividends of at least 5%, but usually much more. Our portfolio currently sports yields as high as 14%.
When I say “return its yield,” I mean that we want—at a minimum—the price to remain steady as we collect our high dividends.
Big Dividend Doesn’t Help ULTY Investors
ULTY? Well, what its dividend giveth, its share price taketh away—and then some! Since the fund launched a little over a year ago, those who bought off the hop are down 12.4% as of this writing, with dividends included.
ULTY Total Returns