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June 2015 trading, investing, and dividends results

Another month is over and I am back to make a reflection of my trading and investing.

Many times when I think everything is great and bright I get a snap from Mr. Market. He always reminds me that trading or investing is not easy way up. And it is not always a way up.

When trading there are times when your account will be swinging to both sides. At the beginning of the month I had a great time and now at the end of the month my accounts are down due to recent sell offs.

 

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No matter how frustrating it is, these sell offs and drawdowns must be viewed positively. This is a temporary drop of value of my accounts. The quality of stocks or trading positions haven’t changed a bit. Sell offs like the last few days we saw are a great opportunity and money maker.

If you know what you are doing, if you understand how you are making money, where your risk is, and how to manage that risk, you shouldn’t worry.

If you have no clue and you are trembling with any stock or market move, you shouldn’t be investing or trading.
 
 

June 2015 trading results

Before the market crashed thanks to the Greece mess a few days ago my trading account was nicely up. My Net-Liq was booming. Then Greece came out and my Net-liq tanked.

Should I be worried and freaking?
 

SPX
The chart shows premarket sell off at the end of the last month when Greece announced a referendum and no deal with creditors. This large drop had a significant impact on all accounts. Investors shed 300 billion of dollars that day. A typical overreaction from which we are still recovering.
 

Of course not!

Although my net-liq sank to abyss, all my trades (except a few old ones) are safe and still positioned to make money. Thanks to increased volatility they are temporarily losing money, but all options are safely OTM.

 

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It is because I changed my strategy four weeks ago. And that strategy now works like a charm. All trades I opened under that strategy are in great shape even after such sell off. And I am happy for it.

To provide you with a perspective, look at the chart below. It shows all my trades against SPX I opened under my new strategy. The circle shows the recent drop of the market because of Greece. As you can see, no trade is jeopardized at all by the recent market behavior.

 
SPX
The large red candle in the white circle shows the drop of prices due to Greece deal-no-deal events. the yellow price lines indicate my open call spreads and put spreads. No matter how dramatic the sell-off was, none of those trades are in danger. My Net-Liq however dropped because of volatility which spiked up during those days.
 
 

Below are my trading results. Although they look scary, they actually are not that bad. This month I made money, my account’s cash rose a bit, only net-liq dropped. Unless I decide to close all positions on Monday, I do not have to worry about Net-Liq at all:

 

June 2015 options trading income: $206.24 (1.76%)
2015 portfolio Net-Liq: $9,243.73 (-15.79%)
2015 portfolio Cash Value: $12,944.83 (N/A)
2015 overall trading account result: -21.04%

 

The results above do not reflect the effect of the new strategy. The results of the new strategy will be visible later in August – September 2015.

I expect my new strategy to make around $400 a month (since my account is still small) and grow that income every month. The new strategy would require at least $5,000 to start with. I recommend $10,000 for great results. You can follow my trades by subscribing to my newsletter, which is free. I post all trades at the same time I place them.

If you do not have an account you can open one with Tradestation and get up to $500 – trade commission free for 90 days. Then you can follow all my trades to generate income. in your account.

You can also paper trade those trade ideas before you commit your own money. And if you like the results paper trading, why not to tray with real cash, right?
 
 

June 2015 dividend investing results

The value of my dividend account also dropped significantly this months thanks to a sell off. But again, as with the account above, the income is what matters here and not value. As Dennis McCain wrote on his blog, when values of stocks drop, DGI investor is smiling. When stocks are falling, we can buy more shares and get better yield on cost.

This month I didn’t purchase any new stocks. I had a few stock spinoffs though.

My Lorillard (LO) stock was replaced by shares in Reynolds American (RAI) and at the beginning of the month my PPL stocks were spun off and I received shares in Talen Energy (TLN).


Concerned about inflation? Check out our dividend strategy motifs.

Lorillard was a good stock and it paid me great dividends over time. Reynolds however followed the suit and I already received great dividends too. Talen Energy is not a dividend growth stock and it probably never be one. Yet I decided to keep the stock as a growth stock in my portfolio as I like an idea keeping all spinoffs or splits (it wasn’t always like that).

I also decided to apply my option strategy in my ROTH IRA account to build it faster. I can see more and more that with options my income is larger per dollar invested than what I receive with dividends. However, dividends are passive and do not require a daily attention. So I dedicated some free dollars in my ROTH account to employ in options trading and I will invest all proceeds into dividend stocks.

 

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I have to do it this way, since our family budget doesn’t allow me to contribute to my retirement account regularly and reinvesting dividends and income from options is the only chance for me how to boost savings.

The only thing I need to figure out is how to trade options so the trade is secure, safe, and money making machine and not a losing machine. I think, my new strategy is the right one which will make money consistently.

 

June 2015 dividend stock buys: none
June 2015 dividend stock sells: none
June 2015 spinoffs: Lorillard > Reynolds American
PPL > Talen Energy

 

For the reasons above I decided to abandon my commission free savings strategy into non-transaction cost ETF RWX. I sold all shares of RWX and use the freed cash for options trading.

I reviewed the results of RWX and it paid a few dollars in dividends. To my surprise I received a bit over $4 in 2015 from RWX and it is not worth it. My options strategy and structure I am building in my ROTH IRA account has a potential to make me $50 weekly in average. Why saving money in RWX?

 

June 2015 dividend income: $118.72
June 2015 options income: $0.00
2015 portfolio value: $17,235.13 (-7.14%)
2015 overall dividend account result: -1.23%

 

ROTH 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, but are still up 4.14% for the year. Considering how bad the market was this month I think, this is not a bad result.

What do you think?

How about your investing or trading result?
 
 

What is my market expectation for July 2015?

I do not have any detailed expectations for this market. Greece will play a role in this mess. It is definitely interesting seeing that Greece defaulted to pay back $1.7 billion but our stock market lost $300 billion that day. This says a lot about the market and what freaks are running it these days.

Unlike those freaks who are panicking, you should not. I constantly train my brain to focus on income and safety of my investments and not value of those investments and temporary fluctuations. It is difficult to do. I have seen my co-worker sitting by the monitor every day watching every move of the market and freaking out any time it went down or against his positions. Immediately he considered those trades “a misery, tragedy, or disaster”. At the end he closed all his positions at a loss because he couldn’t stomach the fluctuations, he wasn’t willing to give his investments time needed. But most importantly, he was negative about those investments (trading) and had unrealistic expectations.

It is hard to learn the opposite. It cost time and money.

What is my expectation for July? I think the market will go down in the first half of this month but later on we will see a rally and we may see new all-time highs by the end of the month. I do not expect any significant new highs, just slightly above what we saw last month.

What do you think? What is your expectation for July?

Do you think Greece will leave Eurozone and that would spark more sell offs?

Is the Grexit good or bad for global economy?

Are you afraid of any potential sell off or are you awaiting it with excitement and why?

Share your idea with us and let us know what you think about this market, your investments or trades or just comment or post your questions!
 
 





2 responses to “June 2015 trading, investing, and dividends results”

  1. Thanks for the article Martin. I love volatility, and we should get a whole mess of it tomorrow……following the Greek’s no vote. You probably have an options trade set up for just this type of possibility, but the rest of us will polish up our watch lists and get ready for more volatility. Have a great week!

    -Bryan

    • Martin says:

      Hi Bryan,

      actually no, I was kinda out of it as if they voted “yes” the markets could shoot up, but I will be opening trades next week when the markets are down and volatility higher for sure. I didn’t speculate for Greek vote.

      Thanks for stopping by!
      Martin

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