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Is Return of Capital (ROC) Good or Bad?

| At first glance, some investors believe that Return of Capital in ETF dividend payouts is just your money being returned to you. Now, whether that is good or bad is more a factor of timing and, yes, taxes. Let me explain.

This past summer, I started investing in Option Strategy Income ETFs that sell options on reference assets and distribute that income to investors on a weekly or monthly basis. This strategy enables some jaw-dropping yields of 20, 50, and even 100%+ annual dividend yields. But in the ‘fine print’, there is something called Return of Capital. To the uninitiated, this can be a turn off, so let’s clarify what this really is and when it is good and when it is bad.

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Author’s Disclosure and Disclaimer: The author may or may not hold positions mentioned in our blogs. This is not trade or financial advice and I am not a financial advisor, money manager, or tax advisor. This blog represents the opinion of the author and is for entertainment purposes. Also, this blog is in no way a recommendation to buy or sell any

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BlockStoxx
BlockStoxx

Published in BlockStoxx

What trading secrets do you want to discover? Mastering wealth, strategic investing, and portfolio hedging. Want to add your story to our publication? Email me at admin@blockstoxx.com with a link to your story. Upon satisfactory review for quality, I will add you as a writer!

Ryan
Ryan

Written by Ryan

Insider Tips & Resources for passive income w/ focus on trading, crypto, and affiliate marketing. Top Writer on Medium.com for Investing and Finance

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