WHAT WE DO? WE SELL OPTIONS FOR INCOME. WE USE THAT INCOME TO BUY DIVIDEND GROWTH STOCKS!
CHECK OUR TRADES ON OUR MeWe PAGE!


Posted by Martin April 10, 2021
No Comments



 




2021 Week 14 investing and trading report


The first week of April is over and it is time to provide our weekly investing and trading report again. Our portfolio growth seems to be gaining steam and growing faster than before. We continued the aggressive accumulation of stocks that we like because they pay us dividends while we wait for them to appreciate in their value. We also continued aggressive options trading bringing in more income that can be reinvested.

This week, we doubled our account and met our annual portfolio net-liquidating value goal!

 

Here is our investing and trading report:

 

Account Value: $42,606.35 +$1,492.13 +3.63%
Options trading results
Options Premiums Received: $885.00    
01 January 2021 Options: $4,209.00 +16.65%  
02 February 2021 Options: $4,884.00 +15.41%  
03 March 2021 Options: $5,258.00 +12.79%  
04 April 2021 Options: $878.00 +2.06%  
Options Premiums YTD: $15,229.00 +35.74%  
Dividend income results
Dividends Received: $0.71    
01 January 2021 Dividends: $53.04    
02 February 2021 Dividends: $63.00    
03 March 2021 Dividends: $30.31    
04 April 2021 Dividends: $42.21    
Dividends YTD: $188.56    
Portfolio metrics
Portfolio Yield: 4.04%    
Portfolio Dividend Growth: 7.47%    
Ann. Div Income & YOC in 10 yrs: $6,050.48 13.84%  
Ann. Div Income & YOC in 20 yrs: $37,610.31 86.02%  
Ann. Div Income & YOC in 25 yrs: $133,036.96 304.28%  
Ann. Div Income & YOC in 30 yrs: $665,041.94 1,521.06%  
Portfolio Alpha: 26.78%    
Portfolio Weighted Beta: 0.88    
CAGR: 756.99%    
AROC: 35.98%    
TROC: 23.62%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 17.60%  
2021 Portfolio Value Goal: $42,344.06 100.62% Accomplished

 

We continued accumulating our stocks to achieve our dividend weekly dividend income. We accumulated shares in Realty Income (O), ABBV, AAPL, and we finished accumulating (we reached 100 shares) AES according to our plan. I also decided to start increasing holdings in AT&T (T) stock. Our non-adjusted stock holdings market value increased from $44,923.51 to $47,486.85.

 
Stock holdings week 14
 

Last week, we received $885.00 in premiums trading options against our holdings. For the entire April 2021, we received $878.00 premiums, and all our income was reinvested.
 

Open trades

 
Investing and trading report
 

The table above shows all our open trades and expirations. It is just a simplified tracking and buying power reduction. Our goal is to trade a set amount of equity strangles in what I call perpetual strangle trading. It is nothing fancy. I just have a list of equities I like to trade options around them, I like to eventually own and I accumulate these stocks. Once a trade expires (or nears expiration) I re-open the trade or roll it into the next expiration (mostly trades that a stock is near the short strike and there is a risk of getting in the money).

We opened new trades last week. The BP reduction increased from $37,123.70 to $39,451.90, a reduction of +$2,328.20 or +6.27%.

 

Investing and trading ROI

 

Our options trading delivered a 2.06% monthly ROI, totaling a 35.74% ROI.

Our account increased to 107.10% YTD growth. This means, we just doubled our account.
 

Our options trading averaged $3,807.25 per month this year. If this trend continues, we are on track to make $45,687.00 trading options in 2021.
 

We are still on track to complete goals in our portfolio. We made slight adjustments and we are providing our comments to our goals and tasks we set up in the week 6 report:
 

Old SPX trades repair

 

This week we have not done any adjustments to our old SPX trades. We are still sitting on those trades and waiting for the untouched side to close so we can roll the trades again. The goal will be to roll the trades until we will be able to close them for at least break even and release the buying power. We will keep doing this only if the resulting trade will be a credit trade or a very small debit. If adjusting these trades would require adding more new money, we would rather close these trades and move on.

 

Accumulating Growth Stocks

 

In the last few weeks, I was accumulating Tesla (TSLA) stock. This week we have not bought any new shares. We started trading Iron Condors against Tesla to start lowering our cost basis.

We are also accumulating g Apple (AAPL) stock although last week we have not purchased any new shares.

 

Accumulating Dividend Growth Stocks

 

Buying high-quality dividend stocks is our core strategy. And we will continue to do so and at a faster pace. I continued accumulating Realty Income (O) this week and as of today, we hold 60 shares.

We also accumulated ABBV and AES stocks. We increased our position in ABBV to 17 shares, and we reached 100 shares in AES company.

We started accumulating PMX shares (a tax-free municipal bond fund). We currently hold 40 shares and plan to reach 100.

Our goal is to not only reach 100 shares of high-quality dividend stocks but also create a weekly dividend income from these stocks All it takes to create a weekly dividend income is to buy 12 stocks to spread the income for every week. I created this dividend calendar and track the stocks I want to buy to get this goal done fast.
 

Weekly dividends income calendar
 

As you can see in the table above, we are reaching our weekly dividend income goal as almost all weeks are filled with dividend income. All that is missing is February and March first week “slot” (and subsequent months) but others are already filled. April should deliver an income every week. After we add all weeks, we will start increasing shares so the income is larger and larger every week. Also, note that I have included holdings of 100 shares in this table only. So, for example, we own 17 shares of AAPL and therefore it is not yet included in this table although we will receive income next month.

 

Market Outlook

 

The market continues playing according to the expected price move. I still expect this market to hit the $4,200 mark in the near future. I expected this moe, but I have not expected this “straight-up” move. But I am happy with it, too.

 
SPX April 02 2021 outlook
 

 

Trading options

 

We continue trading options around the stocks we own or plan to own. I call it monetizing our positions. It has a threefold benefit. It lowers our cost basis (at some point we will own all our shares for free), covers our call sides of each trade, and generates an additional income on top of the dividends. And that income is significant as you can see from our report at the top of this post.

We added a few new trades to our portfolio and we are close to having our trading “full”, or be fully invested. Once that happens, we will start trading multiple contracts. As of now, we mostly trade one contract of strangles. I am still thinking about building a ladder using LEAPS against SPY and AAPL as of now but not yet decided.

 

Investing and trading report in charts

 

TW Account Net-Liq week 13
 

Our aggressive accumulation of dividend stocks, using proceeds from aggressive options trading (by “aggressive” I do not mean reckless, but using all available funds and be fully invested at all times), is delivering fruits. Our net liquidation value increased significantly this year. I expect this trend to continue. I am also preparing our account for portfolio margin and once we achieve the required net-liq value, I will add this feature to our account. I hope to be able to trade a bit more aggressively. And yes, I am aware of potential risks.

 
TW Account holdings week 14
 

The table above shows our current holdings and gains on those holdings. Adjusted columns indicate how options help to boost (or ruin) our stock holdings appreciation, or in other words, lowering the cost basis. Without options, our holdings would be up 8.61%. With options, our holdings are up 14.93% (from inception on 4/1/2019). The SPX is up 42.73% since inception. Since the inception of the fund, our stock holdings underperform the overall market (up only 14.93% on a cumulative basis). This week, our adjusted stock holdings underperformed the market. The market gained 12.89% YTD, our portfolio options-adjusted stock holdings grew by 7.95% YTD. This includes stock holdings adjusted by options trading, not the entire portfolio. If we include the entire portfolio and options trading, we beat the market significantly.
 

TW Account holdings Growth YTD
 

The stock holdings growth slowed down because we added many new positions and these positions didn’t have time to grow yet, so I expect the growth trend to improve over time and beat the market.

 
TW Options Income week 14
 

TW Options Annual Income week 14
 

 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 14
 

I have added another view into our holdings and their expected performance. Below is a chart of all future expected dividends on our holdings. The chart above indicates our dividend goal rather than expected dividends, the new chart below indicates our holdings and their dividend payouts vs. received payouts. In other words, these are the dividends we should receive if we held these positions at the current level since January 1st. But because we have not held those positions since January, we will not be able to receive those dividends. We added new positions just recently so all dividends that are included in the “projected” value were not paid to us. But, if we stop investing now, the “projected” dividend value (currently $1,866.22) is the annual dividend rate we should be receiving as passive income every year without touching anything in our portfolio.
 

TW Received vs Future Dividends week 14

 

Our account cumulative return

 

This is another metric I started tracking (since March 13, 2021) recently.
 

TW cumulative return wk 14
 

As of today, our account cumulative return is 17.45% (since March 13, 2021).

 

Conclusion of our investing and trading report

 

This week our options trading was great and we created a lot of income making March our best month so far.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares. We will also replenish our cash reserves to bring them back to 25% of our current net-liq value.

We will report our next week’s results next Saturday. Until then, good luck and good trading!




TastyWorks

We all want to hear your opinion on the article above:
No Comments



Posted by Martin April 04, 2021
No Comments



 




Dividend Growth Stocks to Accumulate in April 2021


We have a few goals to achieve for our investment portfolio, some goals are primary, others are secondary goals that support the primary goal. I wish, I had more disposable funds to invest and that determined our primary goal – invest and trade so our investments generate enough income that can be reinvested. And here is a list of stocks to accumulate in April to achieve our goal.

To set a goal I needed to answer a simple question: How to invest to achieve my goal? How to achieve a large enough income that can buy more stocks that would generate even more income? The answer was dividend growth stocks.

I was not satisfied with just dividends. An income from dividends is small and grows slowly. At least, at the beginning of the accumulation phase. So, I added an options strategy to generate even more income selling options and collecting premiums. But I wanted more. So, I started looking for speculative but safe high yielding dividend stocks (mostly ETFs and closed-end funds “CEF”). These stocks, unlike the dividend growth stocks, can be bought, but also sold out from our portfolio. The dividend growth stocks are the only stocks we plan to hold forever (unless they cut the dividend due to insufficient earnings or free cash flow).
 

I think I have found a few good candidates I would like to add to my accumulation list.
 

Stocks to accumulate list:

Ticker Name Today’s
Price
Estimated
Annual
Dividend
Estimated
Yield
Accumulated
AFL Aflac 51.16 1.32 2.58% 100.0%
OMF OneMain Holdings 54.99 7.06 13.14% 0.0%
APAM Artisan Partners 52.52 3.08 5.86% 0.0%
ASG Liberty All-Star 8.63 0.66 7.65% 100.0%
QYLD Global X NASDAQ Cov Calls 22.70 0.23 11.49% 100.0%
CHI Calamos Convertible Opps 14.38 1.14 7.93% 100.0%
CSQ Calamos Total Return 17.42 1.23 7.06% 0.0%
NEWT Newtek Business Services 26.89 2.11 7.85% 0.0%
ADC Agree Realty Corporation 68.09 2.48 3.65% 0.0%
STAG STAG Industrial 34.56 1.45 4.20% 0.0%
MAIN Main Street Capital Corporation 39.85 2.46 6.17% 0.0%
O Realty Income Corporation 65.11 2.82 4.33% 55.0%
RYLD Global X Russell 2000 Cov Call 24.51 2.88 10.57% 0.0%
ABBV (NEW) AbbVie Inc. 108.52 5.20 4.79% 13.0%
AES (NEW) The AES Corporation 27.07 0.60 2.22% 70.0%
AAPL (NEW) Apple Inc. 123.00 0.82 0.67% 17.0%
EVN (NEW) Eaton Vance Muni Income 13.79 0.57 4.15% 0.0%
PMX (NEW) PIMCO Muni Income 12.40 0.55 4.45% 0.0%
EIM (NEW) Eaton Vance Muni Bond 13.33 0.60 4.47% 0.0%
FLMN (NEW) Falcon Minerals Corporation 4.71 0.20 4.34% 0.0%

(Prices and yields as of April 4th, 2021)
 

Do your own due diligence if you decide to invest in these stocks. The information here is believed to be accurate but may have changed since publishing.
 
 




TastyWorks

We all want to hear your opinion on the article above:
No Comments



Posted by Martin April 03, 2021
No Comments



 




2021 Week 13 investing and trading report


March 2021 is in the books! And as you would be able to see in this investing and trading report, it was our best month this year generating a nice income for our partnership members. The month of March started slow and I thought it would stay like this. But as the market started going up again and some of our options trades expired and we re-opened them, it picked up and our account ended to be the best month. The generated income from options premiums was reinvested into dividend growth stocks holdings. I hope, the next month will be even better!

 

Here is our investing and trading report:

 

Account Value: $41,114.22 +$1,400.24 +3.53%
Options trading results
Options Premiums Received: $93.00    
01 January 2021 Options: $4,209.00 +16.65%  
02 February 2021 Options: $4,884.00 +15.41%  
03 March 2021 Options: $5,258.00 +12.79%  
04 April 2021 Options: -$7.00 -0.02%  
Options Premiums YTD: $14,344.00 +34.89%  
Dividend income results
Dividends Received: $9.92    
01 January 2021 Dividends: $53.04    
02 February 2021 Dividends: $63.00    
03 March 2021 Dividends: $30.31    
04 April 2021 Dividends: $41.50    
Dividends YTD: $187.85    
Portfolio metrics
Portfolio Yield: 4.19%    
Portfolio Dividend Growth: 8.10%    
Ann. Div Income & YOC in 10 yrs: $6,548.14 15.74%  
Ann. Div Income & YOC in 20 yrs: $49,403.49 118.76%  
Ann. Div Income & YOC in 25 yrs: $207,923.34 499.80%  
Ann. Div Income & YOC in 30 yrs: $1,345,568.52 3,234.47%  
Portfolio Alpha: 26.02%    
Portfolio Weighted Beta: 0.87    
CAGR: 759.37%    
AROC: 27.82%    
TROC: 22.78%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 17.53%  
2021 Portfolio Value Goal: $42,344.06 97.10%  

 

The dividend growth and yield on cost growth are impressive over time. The numbers in the table above indicate how great passive income this portfolio will deliver in the next 20 years. And in the next 30 years, this portfolio will deliver over a million dollars annually in dividend income. That is a state of this portfolio as of today, given that we will do nothing from now on. But we will keep investing, accumulating, and monetizing our portfolio.

The future and the prospect of future dividend income are bright. Yet building such a portfolio is a slow and somewhat painful process. It takes time. If you look at the current dividend income, it looks pitiful and laughable. And many people will tell you that it makes no sense to invest in dividend growth stocks. The income is not worth it. We have over $40,000 invested in dividend stocks and we only received $30 in dividend income.

Unfortunately for the naysayers, this is an incredibly simplified and incorrect view. The invested amount is an amount as of today, invested in these stocks just last week and it had not yet time to transform into the dividend income. It will come later as the next quarterly dividends kick in. But people fail to see it.

Last week we continued accumulating our stocks to achieve our dividend weekly dividend income. We accumulated shares in Realty Income (O), ABBV, AAPL, and AES according to our plan. I also decided to start increasing holdings in AT&T (T) stock. I also got rid of a few stocks that no longer meet our original criteria for investing in them. We sold out Helmerich & Payne (HP) and Oxydental Petroleum (OXY). The companies stopped growing their dividends and cut them significantly. We just held them in our portfolio for a better exit time. As oil rallied, these stocks increased in price and we could sell them break even. We kept all the dividends we ever received, though. Our non-adjusted stock holdings market value increased from $41,602.80 to $44,923.51.

 
Stock holdings week 13
 

Last week, we received $93.00 in premiums trading options against our holdings. It was low as we traded for only two days in the last week of March. We just adjusted a few trades only. Also, on the first day of April (Thursday only, as on Friday, April 2nd, the markets were closed for Good Friday) we generated a small loss. In fact, it was not a loss but closing some positions (we closed a call spread against BABA and TSLA), so our credit premium was in March but closing debit already got in April (as I keep this track based on CASH accounting standard). For the entire March 2021, we received $5,258.00 premiums, and all our income was reinvested.
 

Open trades

 
Investing and trading report
 

The table above shows all our open trades and expirations. It is just a simplified tracking and buying power reduction. Our goal is to trade a set amount of equity strangles in what I call perpetual strangle trading. It is nothing fancy. I just have a list of equities I like to trade options around them, I like to eventually own and I accumulate these stocks. Once a trade expires (or nears expiration) I re-open the trade or roll it into the next expiration (mostly trades that a stock is near the short strike and there is a risk of getting in the money).

We only adjusted a few new trades last week. The BP reduction increased from $36,124.40 to $37,123.70, a reduction of +$999.30 or +2.77%. This increase was just a volatility fluctuation.

 

Investing and trading ROI

 

Our options trading delivered a 12.79% monthly ROI, totaling a 34.89% ROI.

Our account increased to 99.85% YTD growth. We are about to double our money in the next month if this trend continues.
 

Our options trading averaged $3,586.00 per month this year. If this trend continues, we are on track to make $43,032.00 trading options in 2021.
 

We are still on track to complete goals in our portfolio. We made slight adjustments and we are providing our comments to our goals and tasks we set up in the week 6 report:
 

Old SPX trades repair

 

This week we have not done any adjustments to our old SPX trades. We are still sitting on those trades and waiting for the untouched side to close so we can roll the trades again. The goal will be to roll the trades until we will be able to close them for at least break even and release the buying power. We will keep doing this only if the resulting trade will be a credit trade or a very small debit. If adjusting these trades would require adding more new money, we would rather close these trades and move on.

 

Accumulating Growth Stocks

 

Last week I kept accumulating TSLA stock right before it started moving up again. Now we are sitting on a nice gain just a few days after our investment. We however limit our growth stocks holdings to 10% of our portfolio. Currently, we are at 15% and that means that next week or in the upcoming weeks, I will not be adding more shares (unless Tesla tanks so much that it would be a steal to invest).

I also kept accumulating Apple (AAPL) as the stock was displaying weakness. However, it looks like that the weakness in the tech stocks ended last week and these companies are in favor again and rallying. If so, it will be difficult to buy cheap (although, AAPL is not cheap even at this “cheap” level). AAPL is a dividend stock and part of my dividend growth investing strategy and I will keep accumulating this stock.

 

Accumulating Dividend Growth Stocks

 

Buying high-quality dividend stocks is our core strategy. And we will continue to do so and at a faster pace. I continued accumulating Realty Income (O) this week and as of today, we hold 55 shares.

We also accumulated ABBV and AES stocks and we hold 13 and 70 shares respectively.

We also plan on adding Eaton Vance Municipal Income Trust (EVN), PIMCO Municipal Income Fund III (PMX), and Eaton Vance Municipal Bond Fund (EIM) stocks. The reason for that is that although not dividend growth stocks, they pay a relatively good dividend, they pay consistently, and that are tax free.

Our goal is to not only reach 100 shares of high-quality dividend stocks but also create a weekly dividend income from these stocks All it takes to create a weekly dividend income is to buy 12 stocks to spread the income for every week. I created this dividend calendar and track the stocks I want to buy to get this goal done fast.
 

Weekly dividends income calendar
 

As you can see in the table above, we are reaching our weekly dividend income goal as almost all weeks are filled with dividend income. All that is missing is February and March first week “slot” (and subsequent months) but others are already filled. April should deliver an income every week. After we add all weeks, we will start increasing shares so the income is larger and larger every week. Also, note that I have included holdings of 100 shares in this table only. So, for example, we own 17 shares of AAPL and therefore it is not yet included in this table although we will receive income next month.

 

Market Outlook

 

Last week, I mentioned that the market was creating two significant patterns pointing to a potential rally up if these patterns play out. At first, the market had some struggle to break up and fulfill the patterns but then it spiked up on a strong note. Now we have the pattern completed and I expect it to continue.

 
SPX April 02 2021 outlook
 

Our expected price target is now at $4,200 for SPX. It is a measured move from the bottom of a cup (see the lower arrow) projected to the top of the breakout (see the second higher located arrow). I can’t predict whether this happens and if it happens, how long will it take to get there. It may be a strong narrow rally or a choppy painful move. We have to wait to see.

 

Trading options

 

We continue trading options around the stocks we own or plan to own (stock we do not yet own but we started trading options against them, see a book “Generate Thousands in Cash on your Stocks Before Buying or Selling Them“). I call it monetizing our positions. It has a threefold benefit. It lowers our cost basis (at some point we will own all our shares for free), covers our call sides of each trade, and generates an additional income on top of the dividends. And that income is significant as you can see from our report at the top of this post.

We added a few new trades to our portfolio and we are close to having our trading “full”, or be fully invested. Once that happens, we will start trading multiple contracts. As of now, we mostly trade one contract of strangles. I am still thinking about building a ladder using LEAPS against SPY and AAPL as of now but not yet decided.

 

Investing and trading report in charts

 

TW Account Net-Liq week 13
 

Our aggressive accumulation of dividend stocks, using proceeds from aggressive options trading (by “aggressive” I do not mean reckless, but using all available funds and be fully invested at all times), is delivering fruits. Our net liquidation value increased significantly this year. I expect this trend to continue. I am also preparing our account for portfolio margin and once we achieve the required net-liq value, I will add this feature to our account. I hope to be able to trade a bit more aggressively. And yes, I am aware of potential risks.

TW Account holdings week 13
 

The table above shows our current holdings and gains on those holdings. Adjusted columns indicate how options help to boost (or ruin) our stock holdings appreciation, or in other words, lowering the cost basis. Without options, our holdings would be up 7.99%. With options, our holdings are up 14.05% (from inception on 4/1/2019). The SPX is up 38.96% since inception. Since the inception of the fund, our stock holdings underperform the overall market (up only 14.05% on a cumulative basis). This week, our adjusted stock holdings underperformed the market. The market gained 9.12% YTD, our portfolio options-adjusted stock holdings grew by 7.07% YTD (note this includes stock holdings adjusted by options trading, not the entire portfolio).
 

TW Account holdings Growth YTD
 

The stock holdings growth dropped because we added many new positions and these positions didn’t have time to grow yet, so I expect the growth trend to improve over time and beat the market.

 
TW Options Income week 13
 

TW Options Annual Income week 13
 

 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 12
 

I have added another view into our holdings and their expected performance. Below is a chart of all future expected dividends on our holdings. The chart above indicates our dividend goal rather than expected dividends, the new chart below indicates our holdings and their dividend payouts vs. received payouts. In other words, these are the dividends we should receive if we held these positions at the current level since January 1st. But because we have not held those positions since January, we will not be able to receive those dividends. We added new positions just recently so all dividends that are included in the “projected” value were not paid to us. But, if we stop investing now, the “projected” dividend value (currently $1,866.22) is the annual dividend rate we should be receiving as passive income every year without touching anything in our portfolio.
 

TW Received vs Future Dividends week 13

 

Our account cumulative return

 

This is another metric I started tracking (since March 13, 2021) recently. I subscribed to Wingman tracking software (I am on a trial now and not yet fully decided whether to keep it or not). And that helps to track the open positions and account balances without the hassle of doing it manually. I will see if I am happy with the result of the subscription or not.
 

TW cumulative return wk 13
 

As of today, our account cumulative return is 13.33% (since March 13, 2021).

 

Conclusion of our investing and trading report

 

This week our options trading was great and we created a lot of income making March our best month so far.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares. We will also replenish our cash reserves to bring them back to 25% of our current net-liq value.

We will report our next week’s results next Saturday. Until then, good luck and good trading!




TastyWorks

We all want to hear your opinion on the article above:
No Comments



Posted by Martin March 27, 2021
1 Comment



 




2021 Week 12 investing and trading report


March 2021 is almost over, we have three trading days left and the month can be closed in the books. It is Saturday, and time to provide our weekly investing and trading report. This week was slow and I thought it would end the entire month weak and with very little income compared to January and February. Yet, this month is about to end as one of the best. Our income exceeded $5,000 and we reinvested the income for future growth. And I am optimistic about the future growth despite the weak market and a lot of pessimism and crash expectations. If the market keeps being weak or even crashes, I have enough cash in reserves to be buying cheap stocks.

 

Here is our investing and trading report:

 

Account Value: $39,713.98 +$5,685.13 +16.71%
Options trading results
Options Premiums Received: $2,707.00    
01 January 2021 Options: $4,209.00 +16.65%  
02 February 2021 Options: $4,884.00 +15.41%  
03 March 2021 Options: $5,165.00 +13.01%  
Options Premiums YTD: $14,258.00 +35.90%  
Dividend income results
Dividends Received: $5.84    
01 January 2021 Dividends: $53.04    
02 February 2021 Dividends: $63.00    
03 March 2021 Dividends: $20.39    
Dividends YTD: $136.43    
Portfolio metrics
Portfolio Yield: 4.03%    
Portfolio Dividend Growth: 8.10%    
Ann. Div Income & YOC in 10 yrs: $5,771.29 14.88%  
Ann. Div Income & YOC in 20 yrs: $41,732.60 107.59%  
Ann. Div Income & YOC in 25 yrs: $169,690.73 437.47%  
Ann. Div Income & YOC in 30 yrs: $1,048,060.01 2,701.97%  
Portfolio Alpha: 28.43%    
Portfolio Weighted Beta: 0.72    
CAGR: 759.68%    
AROC: 28.61%    
TROC: 27.60%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 12.73%  
2021 Portfolio Value Goal: $42,344.06 93.79%  

 

The dividend growth and yield on cost growth are impressive over time. The numbers in the table above indicate how great passive income this portfolio will deliver in the next 20 years. And in the next 30 years, this portfolio will deliver over a million dollars annually in dividend income. That is a state of this portfolio as of today, given that we will do nothing from now on. But we will keep investing, accumulating, and monetizing our portfolio.

The future and the prospect of future dividend income are bright. Yet building such a portfolio is a slow and somewhat painful process. It takes time. If you look at the current dividend income, it looks pitiful and laughable. I just accumulated several positions such as AFL, QYLD, ASG, CHI and reached 100 shares in each of the companies; I also raised positions in Realty Income (O) and ABBV and all I have received is $20 bucks in dividends? What a joke!

Yes, it looks pitiful but the benefit of accumulating these great stocks didn’t yet come to fruition. All we need is to wait for the next dividend cycle to reap the juicy dividends. Dividend growth investing needs and takes time. It is not a quick-rich scheme. And many people these days are not willing to give their investments time. They want 1000% in a week returns. That’s why they invest in scams like bitcoin, or high-flying SPACs many of which will go belly up at some point in the future. Just look at NNDM. People were in frenzy buying the stock because ARKinvest was buying. The stock traded at almost $20 a share. Today, it is back down at $8.75 a share.

Last week, we received $2,707.00 in premiums trading options against our holdings. We opened new trades and accumulated new stock holdings to reach 100 shares of each. I am happy with our achievements this week. For the entire March 2021, we received $5,165.00 premiums. Our non-adjusted stock holdings market value increased from $33,327.00 to $41,602.80. All our income was reinvested.
 

Open trades

 
Investing and trading report
 

The table above shows all our open trades and expirations. It is just a simplified tracking and buying power reduction. Our goal is to trade a set amount of equity strangles in what I call perpetual strangle trading. It is nothing fancy. I just have a list of equities I like to trade options around them, I like to eventually own and I accumulate these stocks. Once a trade expires (or nears expiration) I re-open the trade or roll it into the next expiration (mostly trades that a stock is near the short strike and there is a risk of getting in the money).

We opened a few new trades that helped us to boost March 2021 premium income but it also significantly increased our buying power (BP) reduction. The BP reduction decreased from $27,393.00 to $36,124.40, a reduction of +$8,731.40 adding new trades. That represents an increase of 31.87%. This also helped to increase our net-liquidating value last week.

 

Investing and trading ROI

 

Our options trading delivered a 13.01% monthly ROI, totaling a 35.90% ROI.

Our account increased to 93.05% YTD growth. We are happy with this result because that means we are on the path of doubling our account in three months. Something nice to brag about on social media.
 

Our options trading averaged $4,752.67 per month this year. If this trend continues, we are on track to make $57,032.00 trading options in 2021.
 

We are still on track to complete goals in our portfolio. We made slight adjustments and we are providing our comments to our goals and tasks we set up in the week 6 report:
 

Old SPX trades repair

 

This week we have not done any adjustments to our old SPX trades. We are still sitting on those trades and waiting for the untouched side to close so we can roll the trades again. The goal will be to roll the trades until we will be able to close them for at least break even and release the buying power. We will keep doing this only if the resulting trade will be a credit trade or a very small debit. If adjusting these trades would require adding more new money, we would rather close these trades and move on.

 

Accumulating Growth Stocks

 

This week I took advantage of the weak stock market and selloff of the tech stocks. Many people panic and see the end of the world but I welcome this weakness. Last week, I twisted my arm and started buying Tesla (TSLA) and the more this stock shows weakness, the more I accumulate. I still feel a bit nervous about this stock but I also do a lot of reading about the company and I am more and more convinced that this stock is the sustainable long run. It resembles Amazon (AMZN) that was unprofitable for years because it was reinvesting all its revenue back to the company’s growth. TSLA seems to be doing the same and reinvesting their revenues to the new venues and new industries development. It will pay off one day.

I also kept accumulating Apple (AAPL) as the stock is displaying weakness. I despise this selling based on short-sighted predictions of the market participants who believe that the company will suffer next month. But I do not buy these companies for the next month’s time horizon. I buy because I want to hold that company for years to come. So when these predictors are in a heart attack-like panic and sell, I buy.

 

Accumulating Dividend Growth Stocks

 

Buying high-quality dividend stocks is our core strategy. And we will continue to do so and at a faster pace. A week ago, we started accumulating Aflac (AFL) stock to reach 100 shares. As of today, we finished that goal and own 100 shares.

We also added 100 shares of Calamos Convertible Opportunities and Income Fund (CHI) to our portfolio. This stock is not necessarily a dividend growth stock. It is a high-yield dividend closed-end fund that pays dividends monthly. We may remove the stock from our portfolio if it no longer follows our criteria.

We finished accumulating 100 shares of Global X NASDAQ 100 Covered Call ETF (QYLD) last week. This also is not a dividend growth stock. It is a high-yield dividend closed-end fund that pays dividends monthly. We may also remove the stock from our portfolio if it no longer follows our criteria.

We proceeded to accumulate Realty Income (O), Abbvie (ABBV), and AES Corporation (AES). We started accumulating AES earlier but reached only about 10 shares. We will now proceed to reach 100 shares.

Our goal is to not only reach 100 shares of high-quality dividend stocks but also create a weekly dividend income from these stocks All it takes to create a weekly dividend income is to buy 12 stocks to spread the income for every week. I created this dividend calendar and track the stocks I want to buy to get this goal done fast.
 

Weekly dividends income calendar
 

As you can see in the table above, we are reaching our goal of weekly dividend income as almost all weeks are filled with dividend income. All that is missing is February and March first week “slot” (and subsequent months) but others are already filled. April should deliver an income every week. After we add all weeks, we will start increasing shares so the income is larger and larger every week. Also, note that I have included holdings of 100 shares in this table only. So, for example, we own 15 shares of AAPL and therefore it is not yet included in this table although we will receive income next month.

 

Market Outlook

 

As I mentioned above, the stock market displays weakness. We reached ATH (all-time high) and then sold off more than 5%. We recovered that correction, reach the previous ATH, and sold off again although not that deep as before. Last Friday made the market a strong rally (which I believe will continue into the next week). But this behavior started to picturing nice, bullish patterns:

 
SPX March 27 2021 outlook
 

The market attempted to break the resistance three times. Normally, that is a good sign. The more often the market tries to break, the more likely it WILL break it. Despite people saying that we are on top and the market is about to crash, this is not the case. Reversals, do not work this way. There is a high chance now that the market breaks this resistance and moves higher. Will it happen next week? Possibly. If not, it still will be good for this market. Why?

The longer the market goes sideways, the better. In the last few years, we had a nice bullish run but no consolidation. We need to consolidate gains in order to call this bull market healthy. So in fact, I would prefer Friday’s rally to fail, turn down again, and drop back to $3720-ish level. The longer the market consolidates, the stronger the subsequent rally will be. We are in about a month-long consolidation now. That is good. If we break the resistance and confirm the breakout, expect a strong, month-long rally. Or similar. This is not an exact science.

We also formed a picture-perfect cup and handle pattern. Some say, this no longer works. Maybe. But there are still a lot of people who preach and trade CANSLIM strategy. This may spark their interest (unless they are all on Reddit chasing stocks like GME.

 

Trading options

 

We continue trading options around the stocks we own or plan to own. I call it monetizing our positions. It has a threefold benefit. It lowers our cost basis (at some point we will own all our shares for free), covers our call sides of each trade, and generates an additional income on top of the dividends. And that income is significant as you can see from our report at the top of this post.

We added a few new trades to our portfolio and we are close to having our trading “full”, or be fully invested. Once that happens, we will start adding multiple positions. As of now, we mostly trade one contract of strangles. We may start scaling up and start adding two contracts. I was also thinking of creating a put ladder. I tried to build the ladder a few times in the past, but mostly failed. One reason was that back then I didn’t have enough capital to do a ladder and also enough cash in reserves for adjustments or purchases of the underlying stock should the puts get assigned (if you do not have enough money, the losses can be catastrophic). We are in a very different situation today and we may start building a ladder.

One idea of a ladder can be using SPY LEAPS and selling in the money puts. This can be extremely profitable trading but also heavy in capital requirements:

 
SPY LEAPS ladder
 

As you can see, this trade would require $8,139.81 buying power. With approximately 30 expiration periods for SPY, this would require a free capital of $244,170 for buying power reduction (unless we reach the level when we can apply for portfolio margin and drop the capital requirements to approximately $40,695 and that is a lot more favorable. It is very intriguing.

 

Investing and trading report in charts

 

TW Account Net-Liq week 12
 

Our aggressive accumulation of dividend stocks, using proceeds from aggressive options trading (by “aggressive” I do not mean reckless, but using all available funds and be fully invested at all times), is delivering fruits. Our net liquidation value increased significantly this year. I expect this trend to continue.

TW Account holdings week 12
 

The table above shows our current holdings and gains on those holdings. Adjusted columns indicate how options help to boost (or ruin) our stock holdings appreciation, or in other words, lowering the cost basis. Without options, our holdings would be up 7.25%. With options, our holdings are up 13.23% (from inception on 4/1/2019). The SPX is up 37.40% since inception. Our stock holdings underperform the overall market since the inception of the fund (up only 13.23% on a cumulative basis). This week, our adjusted stock holdings underperformed the market. The market gained 7.55% YTD, our portfolio options-adjusted stock holdings grew by 6.25% YTD (note this includes stock holdings adjusted by options trading, not the entire portfolio).
 

TW Account holdings Growth YTD
 

The stock holdings growth dropped because we added many new positions and these positions didn’t have time to grow yet, so I expect the growth trend to improve over time and beat the market.

 
TW Options Income week 12
 

TW Options Annual Income week 12
 

TW Received vs Projected Dividends week 12

 

Conclusion of our investing and trading report

 

This week our options trading was great and we created a lot of income making March our best month so far. I expect some consolidation next week and light trading. I might be adjusting open trades only.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares. We will also replenish our cash reserves to bring them back to 25% of our current net-liq value.

We will report our next week’s results next Saturday. Until then, good luck and good trading!




TastyWorks

We all want to hear your opinion on the article above:
1 Comment



Posted by Martin March 20, 2021
No Comments



 




2021 Week 11 investing and trading report


Another week is over and I am providing my weekly investing and trading report. The last week was weak and we are on track to have the entire month underperforming. Our net liquidation value grew, but overall, the growth was small (only 7% compared to 23% and 25% in January and February – month over month growth). Let’s review how we did last week.

 

Here is our investing and trading report:

 

Account Value: $34,028.85 +$3,381.36 +11.03%
Options trading results
Options Premiums Received: $340.00
01 January 2021 Options: $4,209.00 +16.65%
02 February 2021 Options: $4,884.00 +15.41%
03 March 2021 Options: $2,458.00 +7.22%
Options Premiums YTD: $11,551.00 +33.94%
Dividend income results
Dividends Received: $2.91
01 January 2021 Dividends: $53.04
02 February 2021 Dividends: $63.00
03 March 2021 Dividends: $14.55
Dividends YTD: $130.59
Portfolio metrics
Portfolio Yield: 3.71%
Portfolio Dividend Growth: 7.73%
Ann. Div Income & YOC in 10 yrs: $3,877.00 12.60%
Ann. Div Income & YOC in 20 yrs: $23,504.42 76.40%
Ann. Div Income & YOC in 25 yrs: $82,046.63 266.70%
Ann. Div Income & YOC in 30 yrs: $406,504.59 1321.40%
Portfolio Alpha: 27.47%
Portfolio Weighted Beta: 0.60
CAGR: 711.46%
AROC: 27.43%
TROC: 21.38%
Our 2021 Goal
2021 Dividend Goal: $1,071.42 12.19%
2021 Portfolio Value Goal: $42,344.06 80.36%

 

Last week, we received $340.00 in premiums trading options against our holdings. We opened one new trade against Realty Income (O) but the rest of the trades were adjustments only. For the entire March 2021, we received $2,458.00 premiums. Our non-adjusted stock holdings market value increased from $28,642.83 to $33,327.00. All our income was kept in cash.
 

Open trades

 
Investing and trading report
 

The table above shows all our open trades and expirations. It is just a simplified tracking and buying power reduction. Our goal is to trade a set amount of equity strangles in what I call perpetual strangle trading. It is nothing fancy. I just have a list of equities I like to trade options around them, I like to eventually own and I accumulate these stocks. Once a trade expires (or nears expiration) I re-open the trade or roll it into the next expiration (mostly trades that a stock is near the short strike and there is a risk of getting in the money).

Although, we have not opened any new trades we experienced a significant jump in buying power reduction. The BP reduction decreased from $28,780.90 to $27,393.00, a reduction of -$1,387.90 as some of our open trades expired. That represents a reduction of 4.82%. This helped to increase our net-liquidating value last week.

 

Investing and trading ROI

 

Our options trading delivered a 7.22% monthly ROI, totaling a 33.94% ROI.

Our account increased to 65.41% YTD growth. We are happy with this result.
 

Our options trading averaged $3,850.33 per month this year. If this trend continues, we are on track to make $46,204.00 trading options in 2021.
 

We are still on track to complete goals in our portfolio. We made slight adjustments and we are providing our comments to our goals and tasks we set up in the week 6 report:
 

Old SPX trades repair

 

This week we have not done any adjustments to our old SPX trades. We are still sitting on those trades and waiting for the untouched side close so we can roll the trades again. The goal will be to roll the trades until we will be able to close them for at least break even and release the buying power. We will keep doing this only if the resulting trade will be a credit trade or a very small debit. If adjusting these trades would require adding more new money, we would rather close these trades and move on.

 

Accumulating Growth Stocks

 

This week I gave in and bought Tesla (TSLA). Yes, you may be surprised but I bought a share and I might be adding more shares of this company. I was never a fan of Tesla and considered it a bad company that is just in a bubble and hyped to levels not justifying its valuation. It doesn’t make money, it has no revenue and it makes expensive cars on a very small scale compared to other automakers. Without government subsidies, far fewer people would buy a Tesla car.

But there was something that changed my mind and I didn’t see or refused to see.

When Tesla came out many years ago, my first thought was that it wouldn’t be able to survive. Elon was just a schmuck who would not be able to compete with big automakers. I was wrong. Not only he did make it, but he also forced the entire car industry to follow him. They didn’t steamroll him. He steamrolled them. Without his leadership, there would be no electric vehicles, and no big car maker would ever consider even thinking about them.

But I must admit I refused to look beyond car making division of Tesla. And Tesla is not just about cars. Tesla is a tech company. Tesla took leadership in electric vehicles and now taking leadership in AI and their autonomous driving. Again, I thought, that this would be something big automakers would do and develop on their own. But they didn’t. Elon Musk, again, took the lead and forced the industry to start looking at yet another feature they never dreamed of (only in 1950’s comics books).

Next, Elon Musk started developing batteries for his cars and the entire industry is waking up and starts thinking about how to copy him without infringement. And Tesla has the lead once again.

Tesla started looking at solar panels. And developed panels that are 40% more efficient than those we see today and Tesla is testing solar roofs when no one was seriously thinking about it (I was once thinking why no one is developing it and why you have to have a roof and on top of it install the PVs, why not have the roof as a PV? And just today, I watched a video that Tesla is in fact developing the roof PVs). Speaking of PVs, my other thought was why Tesla cars do not have a PV panel integrated into the roof of the car and be able to charge using solar energy when driving or just parking in front of a shopping mall. I guess the issue is with the equipment you need to transform the energy, standardize frequency, and store it into the batteries. I guess the equipment is still too large to have the car towing a transformer station behind it. But who knows, maybe Elon is already working on it.

I am still uneasy about this stock and hesitant to be buying it. But I missed Amazon before when I could buy it for $360 a share. I missed Apple when I could buy it for $60 a share. And since Tesla still has a good price appreciation in the future, I think, I shouldn’t be missing this boat either, although I have missed a significant portion of that boat already.

 

Accumulating Dividend Growth Stocks

 

Buying high-quality dividend stocks is our core strategy in our fund. And we will continue to do so and at a faster pace. Last week, we started accumulating Aflac (AFL) stock to reach 100 shares. As of today, we own 80 shares.

We also added 100 shares of Liberty All-Star Growth Fund, Inc. (ASG) to our portfolio. This stock is not necessarily a dividend growth stock. It is a speculative, high yield dividend stock and we may remove the stock from our portfolio if it no longer follows our criteria.

We want to accumulate 100 shares of each stock in our watchlist or list of stocks we want to own. This lot of shares is not, however, the end number. Once we are fully invested (own all stocks we want to own), then we will start adding on top of those 100 shares.

Our goal is to not only reach 100 shares of high-quality dividend stocks but also create a weekly dividend income from these stocks All it takes to create a weekly dividend income is to buy 12 stocks to spread the income for every week. I created this dividend calendar and track the stocks I want to buy to get this goal done fast.
 

Weekly dividends income calendar
 

We are also interested in adding some high-yield, yet still safe, dividend earners to further boost our dividend income. I found a few good stocks and closed-end funds, candidates I believe are worth accumulating. Every month I will be posting these stocks, accumulation progress, or stock removal from the portfolio. These stocks or funds may be riskier than the aristocrats and I plan on monitoring them carefully. When the stocks no longer meet my criteria and/or underperform, I will remove them from our portfolio. My first list for March accumulation can be found here.

 

Market Outlook

 

Although the stock market recovered its 5% correction and reached a new ATH (all-time high) it couldn’t hold the new highs and sustain the rally. On Thursday and Friday, the market dropped again as the new euphoria from the FED meeting faded away.

However, if you know the market history and look at the past behavior, such choppiness is normal. It doesn’t predict that we are going to crash from here, nor it doesn’t predict that we are about to skyrocket again. From the historical perspective and past performance, this market can drop to $3,700 and it still will be a normal performance in the given historical perspective. Similar behavior occurred in 1982 and 2010. In both instances, the market posted a significant correction of 14% before renewed rally moved the market back to nice gains (if you had a stomach to stay invested).

 
SPX March 20 2021 outlook
 

I still expect an additional 15% to 75% gains in the next one to five-year time horizon even if we dip lower from here (which I do not expect but it may happen). If we dip to $3,700 it will be a great buying opportunity.

 

Trading options

 

We continue trading options around the stocks we own or plan to own. I call it monetizing our positions. It has a threefold benefit. It lowers our cost basis (at some point we will own all our shares for free), covers our call sides of each trade, and generates an additional income on top of the dividends. And that income is significant as you can see from our report at the top of this post.

 

Investing and trading report in charts

 

TW Account Net-Liq week 10
 

TW Account holdings week 11
 

The table above shows our current holdings and gains on those holdings. Adjusted columns indicate how options help to boost (or ruin) our stock holdings appreciation, or in other words, lowering the cost basis. Without options, our holdings would be up 8.33%. With options, our holdings are up 14.85% (from inception on 4/1/2019). The SPX is up 35.27% since inception. Our stock holdings underperform the overall market since the inception of the fund (up only 14.85% on a cumulative basis). However, this week, our adjusted stock holdings significantly beat the market. The market gained 5.43% YTD, our portfolio options-adjusted stock holdings grew by 7.87% YTD (note this includes stock holdings adjusted by options trading, not the entire portfolio).
 

TW Account holdings Growth YTD
 

TW Options Income week 11
 

TW Options Annual Income week 11
 

TW Received vs Projected Dividends week 11

 

Conclusion of our investing and trading report

 

This week our options trading was weak and as we laid it out in our previous report we were primarily adjusting our trades and opened only very few new trades. Next week, we may reopen trades that expired last Friday.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares. We will also replenish our cash reserves to bring them back to 25% of our current net-liq value.

We will report our next week’s results next Saturday. Until then, good luck and good trading!




TastyWorks

We all want to hear your opinion on the article above:
No Comments



Posted by Martin March 13, 2021
No Comments



 




2021 Week 10 investing and trading report


Last week was difficult and strange at the same time. As the stock market continued recovering its recent 5.9% correction our account net liquidating value dropped. It was frustrating, mainly because we haven’t opened any new trades, only rolled the old ones. I was angry seeing our buying power fluctuating for no particular reason. Of course, there was a reason – the broker. Although the market was going up, the volatility was going up too, and our capital requirements with it. That caused margin calls and dropping net-liq. In this week’s investing and trading report I will provide insight into this issue.

 

Here is our investing and trading report:

 

Account Value: $30,647.49 -$945.83 -2.99%
Options trading results
Options Premiums Received: $697.00
01 January 2021 Options: $4,209.00 +16.65%
02 February 2021 Options: $4,884.00 +15.41%
03 March 2021 Options: $2,118.00 +6.91%
Options Premiums YTD: $11,211.00 +36.58%
Dividend income results
Dividends Received: $4.99
01 January 2021 Dividends: $53.04
02 February 2021 Dividends: $63.00
03 March 2021 Dividends: $11.64
Dividends YTD: $127.68
Portfolio metrics
Portfolio Yield: 3.47%
Portfolio Dividend Growth: 7.44%
Ann. Div Income & YOC in 10 yrs: $2,890.88 11.07%
Ann. Div Income & YOC in 20 yrs: $15,395.55 58.95%
Ann. Div Income & YOC in 25 yrs: $48,135.69 184.32%
Ann. Div Income & YOC in 30 yrs: $203,652.61 779.82%
Portfolio Alpha: 29.52%
Portfolio Weighted Beta: 0.67
CAGR: 684.96%
AROC: 28.62%
TROC: 27.12%
Our 2021 Goal
2021 Dividend Goal: $1,071.42 11.92%
2021 Portfolio Value Goal: $42,344.06 72.38%

 

Last week, we received $697.00 in premiums trading options against our holdings. However, all trades were just adjustments and rolls, no trade was a new one. For the entire March 2021, we received $2,118.00 premiums. Our non-adjusted stock holdings market value dropped from $30,044.95 to $28,642.83, a $1,402.12 market value reduction. All our income was kept in cash.
 

Open trades

 
Investing and trading report
 

The table above shows all our open trades and expirations. It is just a simplified tracking and buying power reduction. Our goal is to trade a set amount of equity strangles in what I call perpetual strangle trading. It is nothing fancy. I just have a list of equities I like to trade options around them, I like to eventually own and I accumulate these stocks. Once a trade expires (or nears expiration) I re-open the trade or roll it into the next expiration (mostly trades that a stock is near the short strike and there is a risk of getting in the money).

Although, we have not opened any new trades we experienced a significant jump in buying power reduction. The BP reduction jumped from $20,332.53 to $28,780.90, an increase of $8,448.37. That is a staggering and sudden jump of 41.55%. No wonder our net-liquidating value dropped.

This caused our broker to issue a few maintenance calls (a version of a margin call) and we had to sell positions in the ICSH fund to release cash. Yet it was not enough and we had to roll some trades to adjust the BP reduction. For example, our Boing (BA) trade released almost $2,000 in BP after we adjusted the trade although our BA strangle was safe and out of the money. The only reason for the BA BP jump was that the company was about to report earnings and its IV went up significantly. Rolling farther away and centering the stock price between our strangle’s legs helped in reducing the BP requirements.

 

Investing and trading ROI

 

Our options trading delivered a 6.91% monthly ROI, totaling a 36.58% ROI.

Our account decreased to 48.97% YTD growth. We are still happy with this result as I do not expect our account value to go up only. There will be days when it will go down. The goal will be to keep it going up overall but fluctuations are normal and expected.
 

Our options trading averaged $3,737.00 per month this year. If this trend continues, we are on track to make $44,844.00 trading options in 2021.
 

We are still on track to complete goals in our portfolio. We made slight adjustments and we are providing our comments to our goals and tasks we set up in the week 6 report:
 

Old SPX trades repair

 

Last week we had a chance to start repairing one of our SPX trade. We closed an old SPX put spread for 0.05 debit, then rolled the calls higher and away in time. After the rade rolled, we opened a new put spread to offset the cost of the entire roll. Unfortunately, rolling Iron Condors has to be done in two trades unlike strangles where you can roll both legs in one trade. And also, to reduce the BP requirements, one leg (in our case the put leg) has to be closed first in order to roll the endangered leg without doubling the BP requirements.

Here are the tickets of the trades we took:

 
Old SPX trades repair wk 10
 

The trade adjustment required 0.40 or $40 debit to roll it higher (closer to the money). Our goal is to do it several times to get the calls out of the money, even if the put side being in the money, have the calls expire, and roll the put side only, and hopefully, one day, have the put side expire too. This trade blocks $2,500 buying power. If we keep the cost of adjustments down, it makes sense to salvage this trade. If it starts becoming costly, we will let it go.

 

Accumulating Growth Stocks

 

This week, our net-liq and buying power prevented us from accumulating the growth stocks. It is still our plan to have at least 10% of the account value in these stocks. As of now, we hold BX and CUTR only.

We created another Finviz screener to pick stocks that are poised to spike up significantly. This screener looks for an unusual volume spike and price movement with strong upward momentum. It picks stocks in a small-cap category but it can be changed to “mid”, “large”, or “mega” caps. But the selected candidates need to be reviewed further.

 
Finviz screener
 

Some of the selected candidates will be already extended, you want to avoid those. You do not want to chase the stock. Some candidates will show bearish setups but the screener is a bullish set up so you are in fact looking at a contradictory stock and you do not want that either, e.g. DRRX.

Then you get a nice setup like NOG on the picture if on Monday you see it breaking above the resistance (e.g. $12 a share), you may enter the trade. Others will be already in a breakup runaway like FLNT, which could be a good stock to enter on Monday too. But since it already broke on a large volume and long candle, there may be a pause. You can still enter the trade but use stop loss!

This link can get you to the screener.

 

Accumulating Dividend Growth Stocks

 

Buying high-quality dividend stocks is our core strategy in our fund. And we will continue to do so and at a faster pace. Last week, we started accumulating Aflac (AFL) stock to reach 100 shares. As of today, we own 46 shares.

We want to accumulate 100 shares of each stock in our watchlist or list of stocks we want to own. This lot of shares is not, however, the end number. Once we are fully invested (own all stocks we want to own), then we will start adding on top of those 100 shares.

Our goal is to not only reach 100 shares of high-quality dividend stocks but also create a weekly dividend income from these stocks All it takes to create a weekly dividend income is to buy 12 stocks to spread the income for every week. I created this dividend calendar and track the stocks I want to buy to get this goal done fast.
 

Weekly dividends income calendar
 

We are also interested in adding some high-yield, yet still safe, dividend earners to further boost our dividend income. I found a few good stocks and closed-end funds, candidates I believe are worth accumulating. Every month I will be posting these stocks, accumulation progress, or stock removal from the portfolio. These stocks or funds may be riskier than the aristocrats and I plan on monitoring them carefully. When the stocks no longer meet my criteria and/or underperform, I will remove them from our portfolio. My first list for March accumulation can be found here.

 

Market Outlook

 

The stock market posted its first correction in 2021. We dropped by 5.9% from an all-time high and everybody out there was predicting a crash, doom, and end of the world. Yes, the market is vulnerable, there is a lot of fear, but, in my opinion, this fear is not justified.

 

Market correction
 

It is perfectly normal and expected to have corrections on the way to new highs. No one should ever expect the market to go up only. There will be corrections. But I do not expect a crash like you can see predictors on Youtube predicting. We see VIX elevated these days. The normal mean value of VIX is in the 10 to 20th level. As of today, we are significantly above that level. Until we see complacency in the market, do not expect any crash.

 
SPX March 2021 correction
 

Instead, after a painful initial 5.9% correction, the market briefly dipped below its upward moving trend and today, it is back above it. Comparing several indicators and past historical signals when the market behaved in a similar manner to today’s price action, I expect an additional 15% to 75% gains in the next one to five-year time horizon. Will it be a smooth ride? No. But we are going up.

 

Trading options

 

We continue trading options around the stocks we own or plan to own. I call it monetizing our positions. It has a threefold benefit. It lowers our cost basis (at some point we will own all our shares for free), it covers our call sides of each trade, and generates an additional income on top of the dividends. And that income is significant as you can see from our report at the top of this post.

 

Our fund in charts:

 

TW Account Net-Liq week 10
 

TW Account holdings week 10
 

The table above shows our current holdings and gains on those holdings. Adjusted columns indicate how options help to boost (or ruin) our stock holdings appreciation, or in other words, lowering the cost basis. Without options, our holdings would be up 9.68%. With options, our holdings are up 16.48% (from inception on 4/1/2019). The SPX is up 36.32% since inception. Our stock holdings underperform the overall market since the inception of the fund (up only 16.48% on a cumulative basis). However, this week, our adjusted stock holdings significantly beat the market. The market gained 6.47% YTD, our portfolio options-adjusted stock holdings grew by 9.49% YTD (note this includes stock holdings adjusted by options trading, not the entire portfolio).
 

TW Account holdings Growth YTD
 

TW Options Income week 10
 

TW Options Annual Income week 10
 

TW Received vs Projected Dividends week 10

 

Conclusion of our investing and trading report

 

This week our options trading got significantly extended and we have deployed more capital than we can handle. It was not because of opening new trades but due to the implied volatility spike. Until the volatility drops (or we add additional funding) we will not be opening new options trades next week.

If we stay in the already opened positions, we will maintain them only.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares. We will also replenish our cash reserves to bring them back to 25% of our current net-liq value.

We will report our next week’s results next Saturday. Until then, good luck and good trading!




TastyWorks

We all want to hear your opinion on the article above:
No Comments



Posted by Martin March 11, 2021
No Comments



 




More Dividend Growth Stocks to Accumulate in March 2021


Since I posted our last post about stocks to accumulate in March 2021 I spent some time researching dividend growth stocks to accumulate and achieve a growing dividend income, high yield, dividend safety, and capital appreciation.
 

I think I have found a few good candidates I would like to add to my accumulation list.

Stocks to accumulate list:

Ticker Name Today’s
Price
Estimated
Annual
Dividend
Estimated
Yield
Accumulated
AFL Aflac 49.95 0.33 2.42% 46.0%
OMF OneMain Holdings 52.70 7.06 14.35% 0.0%
APAM Artisan Partners 47.91 3.08 6.69% 0.0%
ASG Liberty All-Star 8.83 0.66 7.44% 0.0%
QYLD Global X NASDAQ Cov Calls 22.06 0.23 11.49% 15.0%
CHI Calamos Convertible Opps 13.88 1.14 8.11% 0.0%
CSQ Calamos Total Return 16.58 1.23 7.54% 0.0%
NEWT (NEW) Newtek Business Services 26.72 2.11 8.21% 0.0%
ADC (NEW) Agree Realty Corporation 65.83 2.48 3.80% 0.0%
STAG (NEW) STAG Industrial 32.70 1.45 4.42% 0.0%
MAIN (NEW) Main Street Capital Corporation 37.81 2.46 6.54% 0.0%
O (NEW) Realty Income Corporation 61.82 2.81 4.58% 5.0%
RYLD (NEW) Global X Russell 2000 Cov Call 24.33 2.88 11.84% 0.0%

 

Do your own due diligence if you decide to invest in these stocks. The information here is believed to be accurate but may have changed since publishing.
 
 




TastyWorks

We all want to hear your opinion on the article above:
No Comments



Posted by Martin March 06, 2021
No Comments



 




2021 Week 9 investing and trading report


Another week and the first week of March 2021 is gone and our investing and trading report can be closed in the books, again. This week was painful as the selling continued pushing pressure on our cash and net-liquidation value. We had to start releasing cash from our ICSH fund to avoid margin calls. Having enough cash saved was mind relieving. We opened more trades this week but I must admit, I regretted that. I should have remained in cash and buy more shares of stocks such as APPL. However, our options income exceeded my expectations. We made more money than I expected but due to the market weakness, our net liquidation value didn’t move. The net-liq didn’t move much despite selling out there.

 

Here is our investing and trading report:

 

Account Value: $31,593.32 -$94.31 -0.30%
Options trading results
Options Premiums Received: $1,421.00
01 January 2021 Options: $4,209.00 +16.65%
02 February 2021 Options: $4,884.00 +15.41%
03 March 2021 Options: $1,421.00 +4.50%
Options Premiums YTD: $10,514.00 +33.28%
Dividend income results
Dividends Received: $6.65
01 January 2021 Dividends: $53.04
02 February 2021 Dividends: $63.00
03 March 2021 Dividends: $6.65
Dividends YTD: $122.69
Portfolio metrics
Portfolio Yield: 3.58%
Portfolio Dividend Growth: 7.26%
Ann. Div Income & YOC in 10 yrs: $3,202.52 11.34%
Ann. Div Income & YOC in 20 yrs: $16,885.37 59.81%
Ann. Div Income & YOC in 25 yrs: $52,191.71 184.86%
Ann. Div Income & YOC in 30 yrs: $216,348.10 766.30%
Portfolio Alpha: 26.67%
Portfolio Weighted Beta: 0.62
CAGR: 714.01%
AROC: 26.52%
TROC: 29.59%
Our 2021 Goal
2021 Dividend Goal: $1,071.42 11.45%
2021 Portfolio Value Goal: $42,344.06 74.61%

 

We received $1,421.00 in premiums trading options against our holdings this week. For the entire March 2021, we received $1,421.00 premiums. We increased our stock holdings from $29,034.92 to $30,044.95 of the current, non-adjusted market value. All our income was reinvested back into stocks.
 

Open trades

 

Investing and trading report
 

The table above shows all our open trades and expirations. It is just a simplified tracking and buying power reduction. My goal is to trade a set amount of equity strangles in what I call perpetual strangle trading. It is nothing fancy. I just have a list of equities I like to trade options around them, I like to eventually own and I accumulate these stocks. Once a trade expires (or nears expiration) I re-open the trade or roll it into the next expiration (mostly trades that a stock is near the short strike and there is a risk of getting in the money).

These trades alone block approximately $20,332.53 of buying power, an increase of $2,032.53 and 11.11%. I have not tracked this metric of our portfolio before but I will start tracking it to see if my trading is scaling up or down and how it impacts the net-liq of our portfolio and eventually, how it may affect our portfolio during the stock market downturn.

 

Investing and trading ROI

 

Our options trading delivered a 4.50% monthly ROI, totaling a 33.28% ROI.

Our account decreased to 53.57% YTD growth. We are still happy with this result.
 

Our options trading averaged $3,504.67 this year. If this trend continues, we are on track to make $42,056.00 trading options in 2021.
 

We are still on track to complete goals in our portfolio. We made slight adjustments and we are providing our comments to our goals and tasks we set up in the week 6 report:
 

Old SPX trades repair

We are still on track to attempt fixing our SPX trades that still block approximately $12,000 in our buying power. We set a buy-back order for deep OTM put spreads for 0.10 debit. Once these get closed, we will roll the deep ITM higher and sell new OTM put spreads to offset the cost. It will be a slow process but I believe, it will be worth releasing an additional $12,000 in cash. As I said last week, we will be rolling these trades only if it will be resulting in credit rolls or a wash. If rolling for a credit or a small debit (no more than $10 or $15) will not be possible, we will let those trades go. The recent sell-off in the market would help with rolling these trades although that same selloff is putting pressure on my cash that needs to be used to roll the trades.

Accumulating Growth Stocks

 

I am still interested in some growth stocks that would boost my portfolio in the long run. I have created a screener in Finviz.com to help select stocks that are more solid investments and growth potential rather than the speculative penny stocks in overhyped industries such as “electric vehicles”. The screener returns stocks that are considered by analysts, institutional investors, and insiders as a great investment and that these stocks are accumulated by these investors. The stocks also create revenue and growth and increase that growth.

Stocks from this screener we will be accumulating for the long run are currently Cutera, Inc. (CUTR) and The Blackstone Group Inc. (BX). More stocks like that may be added in the future. As long as these stocks appear in the screener results, I will be accumulating them. Once I reach 100 shares of each, I will start selling covered calls.

Here is a picture of the screener and all settings if you want to follow it and try it for yourself.

 
Finviz Screener
 

Accumulating Dividend Growth Stocks

Buying high-quality dividend stocks is our core strategy in our fund. And we will continue to do so and at a faster pace. Last week, we started accumulating Aflac (AFL) stock to reach 100 shares. As of today, we own 46 shares

We want to accumulate 100 shares of each stock in our watchlist or list of stocks we want to own. This lot of shares is not, however, the end number. Once we are fully invested (own all stocks we want to own), then we will start adding on top of those 100 shares.

Our goal is to not only reach 100 shares of high-quality dividend stocks but also create a weekly dividend income from these stocks All it takes to create a weekly dividend income is to buy 12 stocks to spread the income for every week. I created this dividend calendar and track the stocks I want to buy to get this goal done fast.
 

Weekly dividends income calendar
 

However, I am also interested in adding some high-yield, yet still safe, dividend earners to further boost our dividend income. I found a few good stocks and closed-end funds, candidates I believe are worth accumulating. Every month I will be posting these stocks, accumulation progress, or stock removal from the portfolio. These stocks or funds may be riskier than the aristocrats and I plan on monitoring them carefully. When the stocks no longer meet my criteria and/or underperform, I will remove them from our portfolio. My first list for March accumulation can be found here.

Trading options

We will continue trading options around the stocks we own or plan to own. I call it monetizing our positions. It has a threefold benefit. It lowers our cost basis (at some point we will own all our shares for free), it covers our call sides of each trade and generates an additional income on top of the dividends. And that income is significant as you can see from our report at the top of this post.

Our fund in charts:

TW Account Net-Liq week 8
 

TW Account holdings week 9
 

The table above shows our current holdings and gains on those holdings. Adjusted columns indicate how options help to boost (or ruin) our stock holdings appreciation, or in other words, lowering the cost basis. Without options, our holdings would be up 6.42% with options, our holdings are up 12.23% (from inception on 4/1/2019). The SPX is up 32.81% since inception. Our stock holdings underperform the overall market since the inception of the fund (up only 12.23% on a cumulative basis). However, this week, our adjusted stock holdings significantly beat the market. The market gained 2.97% YTD, our portfolio adjusted stock holdings grew by 5.25% YTD (note this includes stock holdings adjusted by options trading, not the entire portfolio).
 

TW Account holdings Growth YTD
 

TW Options Income week 9
 

TW Options Annual Income week 9
 

TW Received vs Projected Dividends week 9
 

We will continue trading options and accumulating dividend-growth stock next week and report our results on Saturday next week. Until then, good luck and good trading!




TastyWorks

We all want to hear your opinion on the article above:
No Comments



Posted by Martin March 05, 2021
No Comments



 




Stocks to accumulate in March 2021


Here are our stocks to accumulate in March 2021. We plan on accumulating these stocks although it will depend on our available cash. We also plan on reaching 100 shares of each stock so we can start selling covered calls (using the wheel strategy).

The goal is to accumulate high dividend yield stocks that provide safe dividend but also provide capital growth (that is, however, a secondary goal; the primary goal is income, that can be reinvested).
 

Stocks to accumulate list:

Ticker Name Today’s
Price
Estimated
Annual
Dividend
Estimated
Yield
Accumulated
AFL Aflac 49.95 0.33 2.42% 46.0%
OMF OneMain Holdings 52.70 7.06 14.35% 0.0%
APAM Artisan Partners 47.91 3.08 6.69% 0.0%
ASG Liberty All-Star 8.83 0.66 7.44% 0.0%
QYLD Global X NASDAQ Cov Calls 22.06 0.23 11.49% 10.0%
CHI Calamos Convertible Opps 13.88 1.14 8.11% 0.0%
CSQ Calamos Total Return 16.58 1.23 7.54% 0.0%

 

Do your own due diligence if you decide to invest in these stocks. The information here is believed to be accurate but may have changed since publishing.
 
 




TastyWorks

We all want to hear your opinion on the article above:
No Comments



Posted by Martin March 04, 2021
No Comments



 




5% to 10% correction


Today, the stock market went down again marking a drop below the 5% threshold and beginning a 5% to 10% correction. It now counts for 16 days of selling and choppy movement up and down. As of today, we closed 5.9% off of the peak. And it may not be over yet as fear is out there.

Today’s drop below 5% started our counter. However, this type of correction is normal and to be expected. It can end here, or develop into something more serious. We can go 10% down or even more as people start panicking and selling everything.

 
5% to 10% correction
 

These are the times I like to be in high-quality dividend stocks because no matter what happens from now on, I still will be receiving my dividends and my stocks most likely recover the losses. In fact, I will be buying more shares if the market keeps going down.

 

Adding high yield dividend stocks to fight the 5% to 10% correction

 

Despite the selling pressure I decided to boost our portfolio with some high yield dividend stocks and raising more cash reserves. I did some reading and research hoping to find some good stocks that can provide income and perform well during market tension.

I found the following stocks:
 

QYLD
Global X NASDAQ Cov Calls
ETF Monthly (NASDAQ Covered Calls)
Price: $21.75
Yield: 11.49%
 
CHI
Calamos Convertible Opps
Closed-End Monthly (U.S. Stocks & Bonds)
Price: $14.16
Yield: 8.05%
 
CSQ
Calamos Total Return
Closed-End Monthly (U.S. Stocks & Bonds)
Price: $16.42
Yield: 7.49%
 
APAM
Artisan Partners Asset Mgmnt.
Private Equity
Price: $45.77
Yield: 6.73%
 
OMF
OneMain Holdings
Div. Speculators (Personal Loans)
Price: $51.06
Yield: 13.83%
 

Bullish case

 

Investors are selling stocks despite good economic data and a dovish stance from Powell. And reason? Rising bond yields.

They say: “Higher rates are bad for stocks.”

That might be true, then you look at the data.

The truth is a higher 10-year yield has been extremely bullish for stocks, especially since the mid-’90s.

 
Bullish case
 

Bearish case

 

And here is a not-so-good view. It is evident that the stock market is significantly detached from the underlying earnings. Either earnings will catch up or valuation must go down:

 
Bearish case
 

But then, there is that pesky FED…

 




TastyWorks

We all want to hear your opinion on the article above:
No Comments





This site has been fine-tuned by 14 WordPress Tweaks