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October 2016 trading, investing, and dividends results

 · October 2016 dividend investing results

 

If you follow our blog you may know our strategy of creating income now to be invested for income in the future.

That is why I focus on options trading as of now and keep my dividend investing on autopilot.

I want to create a stable, consistent income now, while dividend investing is an income in the future. I once said, we want to be active now, so we can be passive later in our retirement.

You can look at it from this perspective:

I have approx. $19,000 dollars invested in dividend paying stocks in my ROTH IRA account, the rest of the balance is in cash. The account brings in approx. $800 annual dividends. That is 4% annual income. Monthly, it is 0.42% income on invested capital.

In our trading account we have $35,000 dollars invested and that capital is bringing $2,000 in average monthly income. That is 68.57% annual income, or 5.71% monthly income.

As you can see, about the same amount of money can make me higher income now if I actively trade it, while the dividend income will kick in in about the next 20 years after all compounding and dividend increases take effect.

 
Selling or staying?
 

Recently I have seen dividend investors selling their stocks and moving into cash because they assume that valuations of stocks are high. One investor even said that he “is not willing to sacrifice 50% of his account for 4% income”.

If you are a true dividend growth investor then your focus is on the dividend income, dividend security, dividend reinvestment and growth, and not the value of your stocks.

As a dividend investor, you buy dividend stocks and hold them for the rest of your life. So if during crisis the stock loses 50% of its value but keeps paying you the same dividend as before the crisis, or even increases the dividend, then you lose nothing. You only lose if you sell.

And you lose multiple times.

You lose when you sell because it has been proven many times that individual investors (and institutional too by the way) are the worst in timing the market. Many times they sell high and buy even higher.

You lose compounding effect and yield on cost effect if you sell now and happen to buy higher later on.

I made that mistake a few times with JNJ (and other stocks, but JNJ stays in the middle like a risen thumb up). I though valuations were too high so I decided to trim the winner.

I could never buy back for cheaper as the stock continues higher (originally I bought at $58, sold 1/2 position at $72, and today it trades at $115 and I could never buy that 1/2 position back). I will never make that mistake again with dividend stocks. And you shouldn’t either if you want to enjoy fat dividend income in retirement without touching your principal.

 
Staying!
 

So I am staying. I am not selling my stocks. I keep them, I plan on adding to them, and I reinvest dividends.

I use DRIP to reinvest dividends and what I like to watch is how DRIP is affecting my dividends and a slow growth of my account. This has a nice effect. If the stock goes down, I keep buying more shares using the DRIP. When the stock goes back up, I make more money on stocks (not that important), but buy less of more expensive shares.

But the most important effect is that I compound my dividend income. The more shares I buy via the DRIP, the more dividends I receive, and the more shares I can buy…

 
Options in my ROTH
 

To speed things up I decided to trade options in ROTH IRA although not as a primary source of income, just to increase money to be able to reinvest them. I do not trade actively in this account. I sell puts and wait for them to expire or eventually buy the stock via put options if I get assigned.

The reason for this is that ROTH IRA has limited contribution amount.

I can only contribute $5,500 per year. That is very low to nothing of available contribution. When my business options trading picks up enough to be able to invest my income from trading in my ROTH IRA. Once that happens and I start contributing and will have more than the limit I will not be able to invest more in this account.

But to grow the account faster, I will need the account to grow money faster by trading cash secured puts. Then I will have contributions + options income made within the account available to invest.

So the goal is to save $10,000 of available cash in the ROTH IRA account for options trading and invest 50% of all proceeds from the trading into dividend stocks.

 
Here is the plan:

by December 2017 plan: $6,000 trading cash – IN PROGRESS ($2,483.12)
 

I decided to create three sub-accounts (created in my spreadsheet as a mental sub-accounts) with a certain purpose. Here is my plan for 2016:

 

Here is my ROTH account review:
 


Options Income
(Click to enlarge)
 

My annual dividend income decreased this month from $920.74 to $897.49.

 
Dividend stocks added or removed from portfolio:


 

October 2016 dividend stock buys: none
October 2016 dividend stock sells: none

 

To purchase stocks I use trailing stock order strategy OTO trade order (one triggers other) and I described this strategy in my post about purchasing stocks in falling markets.

I also invest into dividend paying stocks using Motif investing which allows me to buy all 30 stocks I want in one purchase using fractional investing, similar to a mutual fund.

You can actually build your own mutual fund with Motif investing.

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.

 


 


 


Get up to $150 when you start trading with Motif

Are you Ready to Start Investing?

Open an account with Motif Investing, build your own mutual fund (Motif) of high quality dividend paying stocks and buy that Motif with as little as $250 per trade. If you open an account and start building your investment, you will receive $150 promo bonus which will help you to start building your retirement account. It is never too late to start at any time!

Or you can open a no fee IRA account and get $150 bonus!

Start investing with Motif Investing is easy.

Once you open an account, you build a Motif which is like a portfolio. And then you place all high quality dividend growth stocks into that portfolio (up to 30 stocks). Once you are done, you buy that portfolio for as little as $250 per trade.

Look at it as if the motif was a cardboard box into which you put all your goodies and then you grab and buy the entire box.

It works as mutual funds. When purchasing mutual funds, instead of buying all individual stocks, you buy the entire fund. Motif investing works the same way. You buy the entire motif as if it was a fund. And by doing so, you purchase all 30 stocks at once at fractional shares.

You can look at it the other way. If you like Amazon stock (AMZN) which trades at approx. $800 a share and you only have $250 dollars to invest this month, you would have to wait 4 months to buy one share!

With Motif, you place Amazon into your motif portfolio and buying the entire portfolio you buy fractions of Amazon now and enjoy the benefits of holding that stock.

I did it with shares of Visa (V) which I wanted to own when it was trading at $300 or more but never had enough money to buy such shares with a single purchase.

If you like the idea as I do, you can read my earlier post on how to build your own mutual fund with Motif investing and start building your account with as little as $250 per month.

So, do not hesitate, take action now open an account and start investing!

 


 

Dividend stocks DRIP:


 

October 2016 DRIP:

American Capital Agency Corp. (AGNC) $28.57
Realty Income Corporation (O) $10.11
Prospect Capital Corporation (PSEC) $8.87
Reynolds American Inc. (RAI) $11.40
PPL Corporation (PPL) $26.17


 

Here are my ROTH IRA trading/investing results:


 

October 2016 dividend income: $85.75
October 2016 options income: -$140.00
2016 portfolio value: $20,237.26 (-0.46%)
2016 overall dividend account result: 33.67%


 

The account decreased by -0.43% compared to the last month but overall we are up 33.67% for the year. All dividends were reinvested back to the companies which generated them.

 
Here is my dividend income:

ROTH IRA account value


 

 
Annual dividends since the beginning:

ROTH IRA account value
 

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

ROTH IRA account value

 

 


 
You may be interested in:

 
Best Places to Retire on Social Security Alone By Karon Warren with Sapling

 
September 2016 Investment Income $1100 By GenXinvestor with My Road to Wealth and Freedom

 
Gutsy analyst argues that already-expensive stock prices will get even more expensive By Nicole Sinclair with Yahoo Finance

 
Belgium-Netherlands Meetup By ambertreeleaves with ambertreeleaves

 


 

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 decreased from previous month and are making 36.57% (down -1.61% from previous month) for the year.

 


 

Remember, if you like trading options and want to have trade ideas for free, join my Facebook closed group and follow my put selling trade ideas in real time, comment, ask questions, and interact with other members. Other members of the group can also post their trades so you can learn from them too.

 
 

You can join the options trading group here

 
 

What do you think?

How about your investing or trading results?

Do you have any question? Need help to start trading or investing? Shoot me an email or let me know below in comments how I can help you.

 
 

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9 responses to “October 2016 trading, investing, and dividends results”

  1. Congrats on another great month. I agree with you on WYNN. It’s volatile enough to be fun for trading. This is a newer trade for me, but I’m enjoying the premiums.

  2. kemp says:

    Some great options earnings! Thanks for the update, keep them coming!

  3. Amber tree says:

    That is a very decent tarding income.

    Trading on a loan is a new idea for me. Not yet for me. Then again, I trade with a collateral account. I do not need to have the cash. In a certain way, that is the same…

    • Martin says:

      Yes, it sounds foreign and scary to many people. I also was scared about it before I took the loan, but then I provided a rationale for it and plan what to do if the trading wouldn’t work and I would be losing money and with that I could do it, take the loan and trade it. So far works perfectly and once I pay this loan off, I will take another one. I will be doing it as long as I grow my account enough that I will no longer need this boost.
      Thanks for stopping by and commenting!
      Good luck investing and trading!

  4. easydividend says:

    Hey :)

    Nice income.

    how do I read the trades? do you write your losses in your trading history?

    I would say if you have to roll a position to the next month you make a loss in the first month and make the win in the next month.

    best regards, Chri from the facebook group ;)

    • Martin says:

      Hi Chri, yes if you look at it that way then all rolls are a loss of the original trade. But I do not look at it that way. I consider a trade open with unrealized loss in the first month and when I close the trade next month then it is a realized gain. In the Trade summary table above all trades with zero P/L and AR% are rolls.
      Thanks for stopping and commenting.
      Martin

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