WHAT WE DO? WE SELL OPTIONS FOR INCOME. WE USE THAT INCOME TO BUY DIVIDEND GROWTH STOCKS!
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April 2018 trading, investing, results

S&P 500  2,669.91 +2.97 (+0.11%)  Dow 30  24,311.19 -11.15 (-0.05%)  Nasdaq  7,119.80 +1.12 (+0.02%)
 

Market fearApril is over and it is once again a time to review our investing and trading through the month. It was a volatile month when our accounts were tosses around like a small boat in a stormy ocean.

But it was just a temporary storm like it usually is in the stock market. No sell off lasts forever and it will eventually recover one day. All it takes for a small retail investor is to have a plan and stick to it.

And I have such a plan and I strive sticking to it. Although our net-liq is still down, we had a great income this month.

Today morning, in our church I had a discussion with one of the members about investing. He mentioned that he pulled out all his money at the beginning of 2008 and bought a housing rental property. It was a smart move! Although, he said, it was not because he was so smart but he got that advice due to his age from his adviser. We all know what happened next in the markets. He avoided being dragged down more than 50% in the following mess.

The reason I am saying it is that an investor needs a plan not only for shiny days but for rainy days too. When he asked me what would you do in the stock market when it crashes again (and one day it will).

My reply was that I designed my strategy so I make money when the market goes up as well as down; and that I invest into dividend stocks so I am not dependent on the stock price. All I need is income from dividends and options premiums. Like a rent from a rental property.

 
Trading Results
 

In April, our net-liq was still down, although it recovered from the March lows. Our net-liq went up from $111,469.61 to $118,410.98. Many people see this as a disaster and a loss. But in my opinion they fail to understand that it is a paper loss only and unless you close your open positions at a loss this is just a paper loss. You will also hear people saying that paper loss doesn’t exist. It also is not true. If I buy an asset and it goes down for some time and I know that one day it will recover, than it is a temporary draw down I can live with.

And I know Warren Buffett would agree with me on this one.

Of course, this depends on what type of assets you are buying. If you buy a stock which has a questionable growth prospect, doesn’t pay dividends, bad management, and you do not do your due diligence when buying such a stock then your paper loss may turn into a real loss. Even if you decide holding such stock. This comes true in case you buy equity which brings no income while holding it, it goes down, and you do not have time to wait for recovery because you need income.

That is a problem of all growth stocks. I am OK to have a few in a portfolio but if you buy such stock, then you are near or at retirement age and the stock drops due to crisis or Wall Street frenzy and you need income, then you are in trouble (4% rule).

 
Trading Results
 

Our income from trading options in April reached nice $3,293.50 dollars. Not as good as in March, but March was an exceptional month. Most of the march income was due to rolling trades and in April I wanted those rolled trades to let sitting down and do nothing. So, I traded less. And I plan on trading less in May too.

 

 · Dividend stock investing

 

In April I added a few stocks into our portfolio. our trading/investing strategy is to use 50% of all our options trading profits and invest into high quality dividend aristocrats. The stock market selling in April offered a few good stocks to invest in at a good price, such as BMY, KMB, or recently AAPL.

Here is a review of our accounts stock holdings:

 
Traditional IRA
Trading Results
 

ROTH IRA
Trading Results
 

TD account
TBD
 

In April we purchased the following shares:

 
Dividend growth stocks

 

 · Dividend Income

 

ROTH IRA dividend income
Trading Results
 

IRA dividend income
Trading Results

 

April 2018 was a good month and I expect the next month to be good too. I expect income from options trading to be in the same range as was in April and I expect our net-liq value of our accounts to improve too when the markets will continue recovering from the recent correction. I also expect our dividend income from our holdings to grow as we will be able to add more and more shares to our portfolio and later on reinvest the dividends.

I am still bullish in this market and I expect it to go higher over time and make new all time highs in the next few months (my expectation is in the next 2 to 3 months we would recover the correction and make new ATH). Of course, this may change, take longer than 2 to 3 months, or not happen at all. I am not saying this to set my prediction and trade that prediction. I want to trade and invest so I do not have to worry about the market at all. Should we go down, I want to be able to make money as well as if we go up.

I wish you all good luck, stay invested for the long haul as over the course of years the stock market will go up, trade good companies, buy good companies or index and do not participate in Wall Street obsessions.

 





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