January 2016 trading, investing, and dividends results

January 2016 is over and it is time to report my trading and investing results. We are in a bear market and it may offer a great investing and trading opportunity although it may look scary at first.

Many will make the bear market look and speak of it as if it was the end of the world and end of stocks, stock market, and capitalism. No, it is not and it will not be. Even though it may feel gut wrenching you stay the course no matter what is happening around you.

You need to review and always have on mind your goal and strategy. As an investor I continue investing into dividend growth stocks, reinvesting dividends and building the wealth. I will do so even if the stock market tumbles, people panic, pundits saying the sky is falling, or all tumble is released. Why?

Because I invest into dividend growth stocks for the next 20 years. And a time horizon like this no crisis is big enough and no crisis lasts long enough to hurt me or my portfolio. In 2020 no one will remember a bear market in 2008 or 2016 no more than just a historical fact that it happened. Same as in 1929.

As a trader I still continue learning trading option spreads successfully to create a consistent income equal to dividends. I am not yet there and I am still losing money. But I take it as a tuition.


 


 
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 · January 2016 trading results

My January trading didn’t start well. Once again I found myself overinvested and opened a few trades which turned against me and I had to close them for a loss. I made new rules at the beginning of the year. One rule was to no longer roll the trades but rather take a small loss than later take a large one.

Last year, I had trades where I could close a trade for $100 or $200 dollars loss. Yet rolling it I created a loss of $3,000 dollars. So no rolling of spreads anymore.

And again I didn’t keep my trades small and risked more than I could afford to lose. Greed is a good servant, but it is a bad master.


 


 
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I consider myself a novice in trading options and I have a lot to learn. Still I want to post my trades for others to see. I hope, one day it will help others to learn trading options as I believe it is a great tool to make money. I created a Facebook closed group. You can join and follow my trades in real time. I post the trades at the time of opening them.

I am trading SPX put or call spreads or Iron Condor. I trade 5 dollar spreads as of now with maximum risk of $500. Due to losses I had to reduce my trading even more to preserve my capital. I will also try to sell rallies. When the market rallies up and then the rally stops and the market reverses, I will sell call spreads.

The same will be if the market falls and the selloff ends and the market reverses, I will be selling put spreads.

If the market moves in a range, I will be selling Iron Condors.

This is actually market timing. You probably have heard that timing of the market is impossible and futile. Well, sort of. I do not expect myself to be right and always catch the bottom or top. All I want to improve the probability of success. When selling call spreads, I want to sell when the market is as high as possible so it will be unlikely for it to go higher, but rather reverses and go down.

Same goes with puts. I want to be selling puts when the market is as low as possible so it will be unlikely for it to go lower and if it does go lower, it will not endanger my positions.

Trading options against SPX, is a hard work, frustration, and tears. One trader once said: “Trading options is the hardest way to make easy money.”
 
He was right.

Statistics say, 90% of new options traders get broke the first year. I hope I will be one of those who survive, learn this art, and become consistent winners.
 

Here is my trading result for the month:

 

January 2016 options trading income: -$1,040.00 (-40.95%)
2016 portfolio Net-Liq: $1,596.26 (-37.15%)
2016 portfolio Cash Value: $1,791.26 (-32.14%)
2016 overall trading account result: -8.63%

 

Here are the results of my options trading:

Options Income
(Click to enlarge)

 
Here are the results of my new options strategy:

Options Income
(Click to enlarge)

 
Here is the entire account value from the beginning of tracking it up to today:

TD Account Value
 

 

 


 
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 · January 2016 dividend investing results

My dividend investing continues slow pacing towards the goal. I created my tracking spreadsheet which finally reflects and tracks what I wanted to see in my portfolio. I can track the dividend yield and the growth of the entire portfolio.
 

Options Income
(Click to enlarge)
 

Dividend stocks added or removed from portfolio:

 

January 2016 dividend stock buys: none
January 2016 dividend stock sells: none

 

Here is my Motif Investing account you can review:
 
 

 

 
 

I continue reinvesting my dividends using DRIP program. I love how my holdings grow when reinvesting the dividends and when the stock prices are going lower. As I believe we are heading into a recession I will be able buying more shares for a lot cheaper.

 

Dividend stocks DRIP:

 

January 2016 DRIP: American Capital Agency Corp. (AGNC)
Realty Income Corporation (O)
PPL Corporation (PPL)
Prospect Capital Corporation (PSEC)
Reynolds American Inc. (RAI)
Vanguard Natural Resources, LLC (VNR)

 

Here are my ROTH IRA trading/investing results:

 

January 2016 dividend income: $81.80
January 2016 options income: $0.00
2016 portfolio value: $15,321.76 (1.20%)
2016 overall dividend account result: 1.20%

 

My dividend income dropped in January due to dividend cuts of KMI and LGCY distribution suspension. Unfortunate but I am ready to deal with it. I wrote about my KMI decision as well as LGCY to keep those stocks. Selling them now would create a loss I am not willing to take.

Here my dividend income:

ROTH IRA account value
 

Here is the entire account value from the beginning of tracking it up to today:

ROTH IRA account value

 

 


 
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Below is my dividend income review for the entire year:

Dividend Income
My ROTH IRA dividend income breakdown per month and per company.
 
 

 · All accounts

Besides trading and dividend accounts I also have 401k account, emergency savings account, etc., which I do not report in detail. You can review those accounts in my “All Accounts Value” table at the bottom of My Trades & Income page.

My accounts dropped from previous month and are losing -1.88% (down from previous month) for the year. This is however caused by the overall markets selloff and if a recession comes I expect those accounts going even lower. A temporary drawdown. No big deal.

Remember, if you like trading options and want to have trade ideas for free, join my Facebook closed group and follow my SPX trades in real time, comment, ask questions, and interact with other members.

 
 

You can join the options trading group here

 
 

What do you think?

How about your investing or trading results?
 
 





8 responses to “January 2016 trading, investing, and dividends results”

  1. Evan says:

    “In 2020 no one will remember a bear market in 2008 or 2016 no more than just a historical fact that it happened. Same as in 1929. ”

    I disagree, you’ll remember and then think why the hell didn’t I buy more! I know I feel that way about 2008/2009. While I did buy (and still hold a lot of my positions from then – that’s when I started my dividend account), I wish I bought MORE.

    If you compare your losses to your dividend income are you just running in place?

    • Martin says:

      Evan, yes, me and you will remember it that way. But those who freak out today and sell all their positions they will probably do not remember it as a good opportunity.

      Do not understand your last question, but I trade options to learn to generate income and hopefully I will be able to do that one day without losses. That’s why I use only a portion of my money and not all of it. It may be a dead end for me, but I hope not.

      Thanks for stopping by!

  2. DivHut says:

    At least your dividend income continues to roll in no matter what happens with your options. Why not just focus on selling covered calls on positions you already own as a more “conservative” options play. Selling covered calls or writing puts would be the only two ways I’d consider trading options. Thank you for mentioning DivHut too by the way. I always appreciate it. Look forward to seeing your Feb. results.

    • Martin says:

      Keith, covered calls or naked puts are cash intensive trades (in ROTH account) as I would need at least 100 shares of a stock to trade covered calls or full amount of cash for assignment if trading puts, so I cannot do it in this phase of trading/ investing career.
      That’s why I use a small amount of cash for trading options to learn and do not trade options in ROTH as of now. Once I progress or be able to make more money to trade CCs and naked puts in the ROTH, then I will definitely adopt those strategies. You know, for example I want to buy VLO as my next dividend stock. I would love to use naked puts to do that, but I would have to save at least $6,500 (if not more) to trade naked put in the ROTH, which actually would be a cash secured put. In order to save that money it would take me a few years as I really cannot afford to save large amounts of money as many of you, my fellow dividend investors, can do and for all that time, those monies would be sitting idling in the account, so as of now I can’t do it. My goal is to reach dividend income large enough that I can stop DRIPping and use the dividends for outright purchases of the stocks of my interest or using options to do so.

      Thanks for stopping by!
      Martin

  3. Amber Tree says:

    Hey Martin,

    thx for this detailed sharing of your trading activity. I am especially interested in your SPX trading. It will be interesting to see how that works out in real life. The theory seems easy. From trading options myself, I know that the reality is a little different…

    Is there a reason you trade SPX and not SPY?

    • Martin says:

      Hi Amber,

      Yes, the reality is different. A lot different. Last year, I suffered losses and it was very depressive. At some point I was even thinking to stop and not to trade anymore. But I still believe in options and believe it can be a great tool to bring additional income besides dividends.

      The reason why I trade SPX is better premium, better tax treatment (40/60 rule), and it cannot be assigned early, so it gives me some peace of mind. Although margin is insane on SPX, I like it better. So, after last year beating I hope this year I can recoup some of my losses and go higher. The rules and theory is in place, let’s see what the practice shows.

      Thanks for stopping by!

      • ambertree says:

        Good luck with your option trading.
        I will folow your trades to learn a little about the type if trades you make. For now i only trade covered calls and naked puts. Iron condors are trades i would like to make one day.

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