Why JEPI, QQQ and VTI Are Low Risk Ways To Make Solid Returns

"For beginners, investing in exchange-traded funds (ETFs) is a good way to invest in a large bunch of stocks at low risk. When you invest in an ETF, you're buying a share of a portfolio that will reflect the performance of the underlying index. Say an ETF tracks the S&P 500 index; then its value will increase or drop based on the performance of the companies included in the index."

"The JPMorgan Equity Premium ETF is a covered call ETF that tracks the S&P 500. It holds close to 100 stocks of the biggest U.S. companies and is a covered call. JEPI uses acombination of covered calls and equity-linked notes to generate income. It invests about 80% in stocks from the S&P 500 and the remainder in equity-linked notes that provide exposure to written call options on the index. This allows it to offer an attractive dividend of 8.6%."

Exchange-traded funds (ETFs) enable ownership of a diversified portfolio that mirrors an underlying index, reducing single-stock risk and minimizing required research. ETFs tracking broad indexes such as the S&P 500 provide low-cost exposure to many large companies. The JPMorgan Equity Premium Income ETF (JEPI) employs covered calls and equity-linked notes, investing roughly 80% in S&P 500 stocks and offering an 8.6% dividend with monthly payouts. JEPI holds 125 stocks with the largest sector weights in information technology (15.8%), financials (13.5%), and industrials (11.8%). Invesco QQQ Trust (QQQ) and Vanguard Total Stock Market ETF (VTI) offer additional low-risk options.

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