In 2020, a "high yield" was 4%. In 2026, you can find ETFs offering 20%, 50%, or even 100% annualized yields. But here is the uncomfortable truth: Most of those yields are fake.
The Mechanics of the Trap
When an ETF pays you a distribution, the share price drops by the exact amount of that payment. This is not a glitch; it is math. If a fund pays you $1.00, its share price drops by $1.00.
For a dividend to be "sustainable," the underlying assets must grow by at least $1.00 before the next payment. If they don't, the fund is simply handing you back your own money and calling it income. This is called NAV Erosion.
The Death Spiral
Imagine a fund starts at $20. It pays $2/month (120% yield!).
Month 1: Price drops to $18. No growth.
Month 2: Price drops to $16. No growth.
...
Month 10: Price is $0. Fund closes.
Result: You got your $20 back (taxed as income), and now hold zero equity. You generated $0 in real wealth.
Introducing the DivAgent Risk Spectrum
To survive in this new era of "Engineered Income," you need a new framework. You cannot judge a Covered Call ETF (Tier 4) by the same standards as a Treasury Bond (Tier 1).
At DivAgent, we classify every income asset into one of 5 Tiers based on its Risk to Principal:
Cash & Gov Bonds. Zero principal risk.
Dividend Growth. Compounding machines.
Credit & Real Estate. Reliable high yield.
Option Income. Capped upside, high cash.
Speculative. High risk of erosion.
In this course, we will break down each tier, showing you exactly what to buy, what to avoid, and how to build a portfolio that survives.