One of my favorite ETFs that sits in my tax deferred bucket is SCHD and on Friday 10/11/2024 it will undergo a 3 for 1 split. In essence, after Friday I will have triple the number of shares although the share value will drop down to 1/3.
I actually have been planning on buying more SCHD but I still believe this market is way over valued as a whole so I intend on selling cash secured puts on SCHD right below the 15 p/e water line. SCHD currently has a p/e of 16x earnings so selling OTM puts should let me buy it at a discount or collect premiums and earn income while I wait to buy at my desired price.
Since we’re talking about my tax deferred bucket, here are a few of my other favorite ETFs.
- IWM – Russell 2000 small caps – I am loving the income from the volatility selling covered calls and cash secured puts.
- LVHI – I consider this the international version of “SCHD” -part of my strategy to capture 80/20 Pareto Distribution.
- HIGH – An income ETF investing in government instruments.
- IDVO – An alternative dividend ETF to SCHD with a slightly different focus.
- SCHY – SCHD’s counterpart for international equities.
- XMHQ – S&P mid caps stocks. Low yield but growth potential.
I checked LVHI, IDVO, and SCHY against the ETF overlap tool and there was zero overlap in these ETFs so they are well diversified, yield at least 5 percent and trade options.
Please don’t go out and buy any of these investments without doing your own due diligence. My positions can change at any given point in time if I find something better or I sour on an investment. Everyone has a different investment journey with different time horizons, needs, wants, and expectations so don’t buy anything until you’ve done your own research.
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What are some of your favorite income ETFs in your tax deferred portfolio? Let me know in the comments below.