Rich Habits Podcast — Episode 144: How to Profit From Market Uncertainty

Hosts: Austin Hankwitz & Robert Croak
Guests: Garrett Paolella & Troy Cates (Managing Partners, NEOS Investments)
Release Date: November 17, 2025

Episode Overview

This episode dives deep into the challenge facing every investor today: market uncertainty. As 2025 comes to a close—with record stock market highs, unpredictable Fed decisions, questions about the AI trade, and the longest U.S. government shutdown in history—investors are worried about how to protect their money and generate consistent returns.

Austin and Robert bring on Garrett Paolella and Troy Cates (NEOS Investments) for a tactical conversation about:

• How to position portfolios for the unknowns of 2026
• The power of income-generating ETFs using options strategies
• Managing risk, using volatility for monthly income, and avoiding common mistakes

Whether you're a new investor or seasoned pro, this episode offers rich, actionable strategies for building a resilient, income-oriented portfolio during turbulent times.

Key Discussion Points & Insights

1. Setting the Stage: Why Uncertainty Is Top-of-Mind

• [01:46] Robert: “As we head into the year’s end and look forward to 2026, the markets are unforgiving… all-time highs while interest rate expectations keep shifting, doubts around the AI trade, and the longest government shutdown in history.”
• The episode frames 2025 as unusually volatile—market highs but low consumer confidence, shifting rates, and major policy/political uncertainty.

2. What are NEOS ETFs & How Are They Different?

• [03:30] Garrett Paolella: “At NEOS, we are an innovative ETF issuer focused on tax-efficient income ETFs… allowing investors to really expose their market views… with the goal of generating a consistent, reliable, tax-efficient monthly income that can help subsidize earnings or help reach retirement at a much faster rate.”
• NEOS offers ETFs (e.g., SPYI, QQQI, BTCI) designed to give investors monthly income—using covered call option strategies—on top of core asset exposures (S&P 500, Nasdaq, Bitcoin, etc.).
• They are recognized in the industry (awards, high ratings) for their approach to blending upside with defensive income, keeping investors fully invested while offsetting volatility.

3. Investor Year-End Checklist & Portfolio Positioning

• [05:09] Troy: Encourages investors to self-reflect as the year closes:
  • Review actual results vs. goals
  • Examine portfolio overlap (hidden concentration risks)
  • Assess real income and tax consequences from distributions
  • Prepare not just for continued gains, but the possibility of reversals or new volatility in 2026
• [07:05] Robert: “It’s not what you make, it’s what you keep… you keep a lot more when you actually have a plan and strategy and you stick to it.”

4. “Time in the Market” & Using Volatility for Income

• [07:47] Austin: “Maybe I should just sit on the sidelines and not participate… but time in the market beats trying to time the market.”
• For those wary of volatility, NEOS funds let you stay invested while harnessing volatility for income.

How the Strategy Works

• [08:25] Garrett: “Options get priced off volatility… you can take advantage of volatility and turn that into an income source… by selling covered calls.”
• Covered calls buffer price swings and generate payouts—offsetting down days and enhancing overall return.
• SPYI and QQQI aim for 1%+ monthly distributions, creating potent income while keeping exposure to growth assets.
• Memorable stat [11:05] Austin: “There’s 29 times on average that the S&P 500 will contract by 1% in a trading day throughout the year.”

5. Comparing NEOS Products for Different Investors

• [13:36] Robert: Asks about QQQI (income-focused Nasdaq ETF) vs. QQQH (hedged version for more risk-averse investors).

QQQI vs QQQH

• [13:59] Troy:
  • QQQI: Standard income approach, over 1% per month, full exposure.
  • QQQH: Adds a put spread (put spread collar) for downside protection. Gives up some income for a “smoother return profile.”
    • “If you have a market that suddenly starts moving lower, that put spread can kick in and protect you… not a fully hedged portfolio, but a measure of downside protection.”
• QQQH outperformed plain Nasdaq ETF by ~8% during spring 2025 tariff-driven volatility ("Trump tariff tantrum").

6. Income ETFs for Crypto Exposure

• [17:35] Garrett: Introduces BTCI (Bitcoin Spot ETF with covered calls)
  • “Bitcoin volatility sits around 60, vs. S&P historically around 18.”
  • Distributions can reach 25–30% annualized, thanks to high crypto volatility.
  • Bitcoin and soon Ethereum: designed for the high-growth/“octane” segment of portfolios.
  • Advisors typically recommend crypto allocations of 5–15% of total invested capital.

7. NEOS’ Ongoing Innovation & New ETF Product Sneak Peeks

• Rapid Fire from Troy [22:25]:
  • Gold high income ETF (IAUI): Provides monthly income from gold exposure.
  • International ETF (NIHI): Income on developed markets ex-US/Canada.
  • Pipeline: Ethereum high income ETF (in registration), boosted levered income ETFs, equity long/short with option overlay, MLP/energy funds.
  • [24:00] Troy: “We don't try to just bring products out to throw things at the wall and see what sticks. We really thoughtfully bring things out where we're seeing investor demand.”

8. How to Handle Emotional/Uncertain Times

• [25:55] Garrett:
  • “It all comes back to your risk tolerance… If the market did drop 10% tomorrow… are you comfortable with that?”
  • Advocates for building a durable portfolio: “Do you have a durable portfolio for what it is that your comfort and your risk level is?”
  • Notes holidays/thin liquidity can mean more volatility: “Lower volume can have bigger swings because there’s less people on the other side. So don’t be afraid of that if you feel like you’ve built your durable portfolio.”

Notable Quotes & Memorable Moments

• [02:28] Austin: “You both bring decades of experience in options trading and portfolio structure, having built first-of-their-kind strategies that allow everyday investors to generate monthly income while staying fully invested in the indices they believe in.”
• [07:05] Robert: “It’s not what you make, it’s what you keep.”
• [10:33] Garrett: “These are funds that you can dollar-cost average—lower volatility than the underlying index—and if it’s paying you 1% a month, that allows you to generate income and stay invested when the markets are down.”
• [13:36] Robert: “Can you walk us through the difference [between QQQI and QQQH] so people understand which may be the better option for them?”
• [16:35] Austin: “Your hedged product outperformed Nasdaq by like 8% during that period of time, which is material for a lot of investors, especially near retirement or focused on capital preservation.”
• [21:44] Robert: “That’s what I love what you guys are doing at NEOS—meeting investors where they are. ...You’re building income-generating solutions for them and you’re not asking them to abandon the parts of the market they already know and believe in.”
• [25:55] Garrett: “Make sure your portfolios are durable and you feel comfortable if or when what could happen in the marketplace that would be an unknown.”

Timestamps for Important Segments

• 01:46 – State of the Market: Why Uncertainty is Everywhere
• 03:30 – NEOS Income ETFs Overview
• 05:09 – Year-End Review & Portfolio Positioning
• 08:25 – The Power of Volatility for Generating Income
• 13:36 – Comparing QQQI (income) vs. QQQH (hedged) for Different Risk Profiles
• 17:35 – Bitcoin & Crypto High-Income ETFs
• 22:25 – New and Upcoming NEOS ETFs (Gold, International, Ethereum, Boosted Leveraged Income, Long/Short)
• 25:55 – Advice for Investors Facing Doubt and Uncertainty

Closing Advice & Takeaways

• Build a “durable” portfolio: one that fits your risk tolerance and stands up to unexpected swings.
• Regularly review holdings, risks, overlaps, and tax impacts.
• Don’t “set and forget” blindly—actively manage, rebalance, and plan ahead.
• “Time in the market beats timing the market”—use income-generating ETFs to stay invested and turn volatility into an opportunity.
• Use tools like NEOS’ QQQH for a smoother ride if you are closer to retirement or want some protection without abandoning growth exposure.
• For crypto or emerging assets: keep allocations reasonable; use income strategies to weather volatility.
• Stay focused on process over emotion amid headlines and market drama.

Final Memorable Quote [27:34, Garrett Paolella]:

“Markets can have more volatility as you head into the end of the year… Don’t be afraid of that if you’ve built your durable portfolio and you’re ready for ramping up into 2026 with just a lot of unknowns… Make sure your portfolios are durable and you feel comfortable if or when what could happen in the marketplace that would be an unknown.”

For more content, community Q&A, and monthly investment ideas, check out the Rich Habits Network and follow Austin & Robert on Blossom Social.