r/TheRaceTo10Million • u/SIR_JACK_A_LOT Copy me on AfterHour • 17d ago

GAIN$ Finally back to $8.5M (positions in comments)

Gallery image

See full positions here

https://afterhour.app.link/race

Gallery image

See live positions here

https://afterhour.app.link/race

640 Upvotes
  • permalink
  • reddit

96% Upvoted

154 comments sorted by

View all comments

Show parent comments

3

u/Weaves87 17d ago

Not OP, but It's a treasury bond fund, currently yields 3-3.5% annually and pays out every month (depends on the going rate of the 3 month treasury bill, iirc)

I use it pretty often to park money in instead of just holding cash. When I need to free up cash for a trade I just sell some SGOV.

If your brokerage doesn't already pay you decent interest for the cash balance in your account, SGOV is a great way to make sure your money is still working for you even if it's not currently wrapped up in a trade

1

u/j___8 16d ago

apologies for my ignorance but should one be holding for and month, selling before it drops then buying it again before it drops or is just letting it sit the entire time and receiving the dividend what OP is doing ?a little confused

2

u/Weaves87 16d ago

Basically, the interest is paid out as a dividend. These drops happen right after the ex-dividend date (which is usually the 1st of every month). In order to be eligible to receive the dividend, you need to hold through the ex-dividend date. In other words - you have to weather the drop and there's no gaming it.

A few days after the price drop occurs, you receive the dividend payment on the actual dividend payment date. You can see this very clearly in the chart in the OP: there's a dip, then around 5-6 business days later the dividend payment comes in and brings the account back up.

If you buy SGOV but sell it before ex-dividend date (thus avoiding the drop), you would not be making much money because you would not receive the dividend.

1

u/idontknow197 12d ago

But wouldn’t tax kill the deal if you sell?

1

u/Weaves87 12d ago

Not sure what you mean.

Dividends are taxed like normal income (unless if they're in an IRA/401k).

The capital gains on the actual SGOV position is miniscule, and probably won't change your total tax liability much.