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


Posted by Martin February 13, 2019
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KMB increased dividend by 3.00%


KMB increased the dividend by 3.00% making this dividend champion‘s 47th consecutive dividend increase.

The old dividend rate was 4.00 annual dividend payout (1.0 quarterly), the new rate is 4.12 (1.03 quarterly).

Our current fair value of the company is $76.01 a share so at the current price of $116.00 the stock is overvalued and in order for this stock to be marked a “buy” the three conditions must be met for us to buy the stock.

The three conditions that the stock must meet are:

1) in a correction mode – fail
2) the current stock price must be below a fair value – fail
3) the 5 year average dividend yield must be lower than the current yield – pass

Since only one of the conditions are met, we mark it a “hold”.

The current yield is 3.55%.

The 10 year YOC would be 5.28% with no dividend reinvestment and 7.68% with DRIP. The company share price tracks the S&P 500 index long term. If you invested 10,000 dollars in 1995 and held for 23 years, the stock average total return would be 8.99% vs 8.74% of the index.

This make this stock a good source of income but also provide a good source of growth making this a good stock for dividend portfolio accumulation and growth phase. If you are looking for both – dividend yield, dividend growth, and capital appreciation outperforming the index, then this stock is for you.

Note, that during accumulation phase, I recommend seeking both – the dividend growth and capital appreciation. If you are a retiree and plan on living solely from your dividends then you do not need capital growth and this income stock is a safe investment.

 
Disclosure: Currently, I long KMB and own shares of this company. It is in our watch list and when it appears as “buy” we may buy more shares of this stock.




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Posted by Martin February 13, 2019
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CVX increased dividend by 6.25%


CVX increased the dividend by 6.25% making this dividend champion‘s 32nd consecutive dividend increase.

The old dividend rate was 4.48 annual dividend payout (1.12 quarterly), the new rate is 4.76 (1.19 quarterly).

Our current fair value of the company is $295.01 a share so at the current price of $118.72 the stock is undervalued but in order for this stock to be marked a “buy” the three conditions must be met for us to buy the stock.

The three conditions are that the stock must be:

1) in a correction mode – fail
2) the current stock price must be below a fair value – pass
3) the 5 year average dividend yield must be lower than the current yield – pass

Since only two of the conditions are met, we mark it a “hold”.

The current yield is 4.01%%.

The 10 year YOC would be 4.88% with no dividend reinvestment and 7.17% with DRIP. The company share price outperforms the S&P 500 index long term. If you invested 10,000 dollars in 1995 and held for 23 years, the stock average total return would be 10.59% vs 8.74% of the index.

This make this stock a good source of income but also provide a great source of growth making this a good stock for dividend portfolio accumulation and growth phase. If you are looking for both – dividend yield, dividend growth, and capital appreciation outperforming the index, then this stock is for you.

Note, that during accumulation phase, I recommend seeking both – the dividend growth and capital appreciation. If you are a retiree and plan on living solely from your dividends then you do not need capital growth and this income stock is a safe investment.

 
Disclosure: Currently, I long CVX and own shares of this company. It is in our watch list and when it appears as “buy” we may buy more shares of this stock.




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Posted by Martin February 12, 2019
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ADM increased dividend by 4.48%


ADM increased the dividend by 4.48% making this dividend champion‘s 44th consecutive dividend increase.

The old dividend rate was 1.34 annual dividend payout (0.335 quarterly), the new rate is 1.40 (0.35 quarterly).

Our current fair value of the company is $28.22 a share so at the current price of $42.44 the stock is overvalued and we mark it a “hold”. The current yield is 3.16%.

The 10 year YOC would be 8.35% with no dividend reinvestment and 13.01% with DRIP. The company share price tracks the S&P 500 but is not able to outperform the index. If you invested 10,000 dollars in 1995 and held for 23 years, the stock average total return would be 7.63% vs 8.74% of the index.

This make this stock a good source of income but with under performing growth. If you are looking for both – dividend yield, dividend growth, and capital appreciation outperforming the index, then this stock is not for you.

Note, that during accumulation phase, I recommend seeking both – the dividend growth and capital appreciation. If you are a retiree and plan on living solely from your dividends then you do not need capital growth and this income stock is a safe investment.

 
Disclosure: Currently, I do not own ADM, but it is in our watch list and if it appears as “buy” we may buy shares of this stock.




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Posted by Martin February 04, 2019
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ADDING AT&T (T) SHARES


We closed our books last week revealing that we made over $2,600 in January (after quite slow start) which allowed us to invest some of the proceeds into good dividend growth stocks.

We use 50% of the options trading proceeds to buy DGI stocks according to our watch list. Whenever a stock is marked as a buy and we have generated enough income, we buy shares equivalent to $600 dollar investment. If we have more than $600, for example $1,300 dollars, we then buy (2) different companies (for example ATT and STX as we did in January 2019). If in our watch list, there are multiple shares marked as “buy” we buy the one with the highest dividend yield. Once a stock is purchased, it is marked with “X” so we do not buy it again once we make new money trading options. Then we continue buying all stocks in the list marked as “buy”. After all marked stocks are purchased, all “X”es are removed and we start from the beginning.
 

Today, AT&t met all our criteria to be purchased. So we bought 20 shares (added to our existing position):

 
BTO 20 T shares @ 29.86 debit
 

AT&T




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Posted by Martin February 02, 2019
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January 2019 trading and investing results


S&P 500  2,706.53 +199.68 (+7.96%)  Dow 30  25,063.89 +1,736.43 (+7.44%)  Nasdaq  7,263.87 +628.59 (+9.47%)
 

September results

I just finished reporting December 2018 and we are again at the end of another month. True, I reported December late.

January started off slow, but ended up well. Our accounts are up and recovering from last year slaughter. But the question is, are we out of the forest or is more carnage coming? Boy, I wish I knew.

In January, we continued trading successfully in our IRA account and made nice income of $2,661.00 in received premiums. In our other accounts, TDA and ROTH, we didn’t trade this month. We only managed opened trades to roll what was necessary to do.
 

We are posting our results:
 

 
IRA Equity:

IRA account equity
 

ROTH Equity:

ROTH account equity
 

TD Equity:

TD account equity

 

We post our trades on our Facebook page.

 
 

 · Dividend stock investing

 

Dividend investing is doing great on both accounts – ROTH and IRA. We keep using 50% of all options income and buy dividend stocks. IRA account keeps growing fast with new stocks being purchased every month. ROTH is more or less stagnant.

 

Here is a review of our accounts stock holdings:

 
Traditional IRA
Trading Results
 

ROTH IRA
Trading Results
 

TD account
Trading Results
 

January started very slow and at first, it looked like we will not be able to purchase any shares this month as we didn’t meet cash flow criteria to purchase new shares. However, two weeks before month end our income jumped up and it allowed us to buy a few shares to add to our dividend income portfolio.

In January 2019 we purchased the following shares:

 
IRA purchases:
Dividend growth stocks
 

It wasn’t easy to choose which stock to buy as many great sotcks in our watch list were indicated as “buy”. We decided to add STX in the end.

At the very last week of the month, our income increased enough to allow us more purchases next week.
 

We haven’t purchased any shares in ROTH or TD this month.
 

We keep spending 50% of our options trading proceeds to buy good dividend growth stocks using our screener to get a better entry into the stocks. Although capital appreciation is not our goal but a secondary target, timing the entry creates good results as our positions are mostly up. However, do not be too excited, any large selloff can temporarily send those stocks down again. It is a dividend income what matters to our portfolios, not the portfolio value and capital appreciation. It seems to be evident that using options to grow the portfolio is the right way to do.

 

 · Dividend Income

 

IRA dividend income
Trading Results
 

ROTH IRA dividend income
Trading Results

 

 · What’s next in the stock market?

 

I am unsure what to expect from the market in upcoming month. January 2019 was definitely one of the best months since 3 years ago. We went up +8%, almost 9%. We went up however, too much and too fast.

I wish this rally / recovery continues but, when reviewing historical charts, it could actually be bad for the market if we do not see any pullback or consolidation at the current levels. Many bearish charts from the past since 1955 indicated bad things happening in similar situation when the market hasn’t pulled back.

Thus the market is giving us mixed signals. I can’t say where we are heading from now.

Nevertheless, I held a believe through the entire 2018 year that the market selloff was just a correction and not a bear market. I still think, this is the case. Although we have mixed signals and we should expect any outcome in this market, it is starting to look like more and more as the previous bullish instances in the past:
 

Trading Results
(Source: CCM)
 

I recommend Chris Ciovacco’s (CCM) video who covers the historical charts and market behaviors and compares it to today’s market conditions to assess his equity allocation. I believe, his outlook can be helpful to assess the next market’s move and trade accordingly:

 

 

Happy Trading!




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Posted by Martin January 28, 2019
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Adding STX shares to our portfolio


We have a strategy to use 50% of options trading proceeds to purchase dividend stocks. In this market many of the stocks in our watch list are a “buy”, so it is difficult to pick one (I wish we had more cash to accumulate them all).

Originally, I wanted to add AAPL but we were buying in December quite heavily and now it is our largest holding in our portfolio. Moreover, APPL will be reporting earnings tomorrow. It may drop, it may jump. I do not know. But I decided not to take the risk of unknown and wait on AAPL.
 

Thus we added Seagate (STX):
 

BTO 13 STX shares @ 43.23
 

STX




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Posted by Martin January 27, 2019
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December 2018 and end of year trading and investing results


S&P 500  2,506.85 -253.32(-9.18)  Dow 30  23,327.46 -2,211(-8.66%)  Nasdaq  6,635.28 -695.26(-9.48%)
 

September results

December 2018 passed and it is time to once again provide a report on our trading and investing. The month turned to be the worst month ever. Historically, December was a good month with modest gains but this year, the markets lost almost 10% and that is unseen since 1930’s (correct me if I am wrong).

Of course these losses had impact on our accounts and our net liquidation values.

However, none of this draw-down translate into physical losses (sort of). As we rolled all trades down and away.

But to make sure we are all on the same page – rolling a trade means closing the old one at a loss and opening a new one which collects enough premium to pay for the loss. So, technically, we took losses in but offset them by new trades.

That’s why the net liquidation values of our accounts went down. as the new trades mature, though, the net-liq values will start rising again (which will be seen in January 2019, unless the markets crash again, as is widely expected these days).

However, all the 2018 mess in Wall Street had impact on our trading and we needed to adjust it slightly to reduce exposure of our capital.

 

What I will be doing from now on?
 

Overall, we will continue reducing our capital exposure and trading less throughout 2019 or until the market tells us where it wants to go. As of now, it looks like that we want to go up and that everything is rosy again. But historically, this can be deceiving. In all historical bear markets, this V shape recovery we are currently witnessing spelled out trouble without a low retest.
 

If that is the case today, we have the following possible outcomes:
 

1) V recovery will continue without retest nor consolidation – bearish.
2) V recovery will stall at or above 200 day moving average and then the market will consolidate – bullish.
3) We bounce down from 200 day moving average (or even above it), go down and retest December lows – bullish.
 

Without knowing what is going to happen I do not want to have overly large exposure in the market. Not that I am scared trading any outcome, I was able to navigate through both corrections in 2018 without losing my shirt, but I want to have my accounts manageable and too many open trades can make it difficult to adjust them should the market slump down fast.
 

So what are we going to do until the situation in the markets change?
 

In the IRA account:
 

1) We open only one weekly trade at a time with Friday expiration. A new trade can be opened only when the old trade closes. If the old trade is rolled into the next expiration and not closed a new trade will not be opened. You can follow the trades in our Facebook page.

2) We open up to two 45 DTE trades but with different time to expiration. We will be creating a ladder. This was our old theory we started doing a few years ago but abandoned and never finished. This means, we will open a 45 DTE expiration trade one week and then a second 45 DTE next week.

3) After a trade is open we immediately place a closing GTC (good till cancelled) trade for 50% profit.

4) We open a new 45 DTE trade only when the old trade is closed. If an old trade is rolled or otherwise kept open no new trade can be opened.

5) A new additional 45 DTE (above 2 contracts mentioned above) trade can be added only when BP is higher than the cash management limit allowed.

6) We will keep managing old open trades already in the account to close them successfully as winners.

 

In the ROTH account:
 

1) There will be no new trading in this account. Only managing old open trades. And saving more cash for trading.

 

In the TD account:
 

1) There will be no new trading in this account. Only managing old open trades. And saving more cash for trading.
 

It is really time to stop the madness and reckless trading I did sometimes in my accounts and bring it back to boring strategy and discipline.
 

We are now publishing our tracking of our accounts for the entire year. If you are interested, you can review it here:

  • Review our IRA account 2018 trading and investing data.

IRA Equity:
IRA account equity
 

  • Review our ROTH IRA 2018 trading and investing data.

ROTH Equity:
ROTH account equity
 

  • Review our TD Account 2018 trading and investing data.

TD Equity:
TD account equity

 

We post our trades on our Facebook page.

 
 

Here are the entire 2018 year trading results:

 
Trading Results
 

 

 · Dividend stock investing

 

Dividend investing is doing great on both accounts – ROTH and IRA. We keep using 50% of all options income and buy dividend stocks. IRA account keeps growing fast with new stocks being purchased every month. ROTH is more or less stagnant.

 

Here is a review of our accounts stock holdings:

 
Traditional IRA
Trading Results
 

ROTH IRA
Trading Results
 

TD account
Trading Results
 

In August we purchased the following shares:

 
IRA purchases:
Dividend growth stocks
 

We haven’t purchased any shares in ROTH or TD this month.
 

We keep spending 50% of our options trading proceeds to buy good dividend growth stocks using our screener to get a better entry into the stocks. Although capital appreciation is not our goal but a secondary target, timing the entry creates good results as our positions are mostly up. However, do not be too excited, any large selloff can temporarily send those stocks down again. It is a dividend income what matters to our portfolios, not the portfolio value and capital appreciation. It seems to be evident that using options to grow the portfolio is the right way to do.

 

 · Dividend Income

 

IRA dividend income
Trading Results
 

ROTH IRA dividend income
Trading Results

 




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Posted by Martin January 15, 2019
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Realty Income (O) Announces 3% Dividend Increase


Realty Income Corporation (NYSE: O), The Monthly Dividend Company┬«, today announced its Board of Directors has declared an increase in the company’s common stock monthly cash dividend to $0.2255 per share from $0.2210 per share. The dividend is payable on February 15, 2019 to shareholders of record as of February 1, 2019. This is the 100th dividend increase since Realty Income’s listing on the NYSE in 1994. The ex-dividend date for February’s dividend is January 31, 2019. The new monthly dividend represents an annualized dividend amount of $2.706 per share as compared to the current annualized dividend amount of $2.652 per share.

That makes it 26th consecutive year increase of the dividend ranking this company to a rank of a “dividend champion”.

Our calculated fair value for this stock is $64.15 and at a current price $64.77 and average 5 year dividend yield 4.49% the stock is overvalued and ranked as a hold.




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Posted by Martin January 11, 2019
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Boeing raises dividends by 20.18%


Boeing (NYSE: BA) has an impressive dividend growth rate of 27.50% (5 year annual average). And in January 2019 it increased the dividend by 20.18% from $6.84 annual dividend (1.710 quarterly rate) to $8.22 (2.055 quarterly) dividend rate payable in March 1st, 2019.

Boeing is a dividend challenger with 8 years of consecutive dividend increases and in our watch list it is currently listed as a buy at the current price of $352.61 a share.

Our calculated fair value is $391.36 a share, average 5 year dividend yield is 2.28 a share (current yield 2.06%), and annual sales at $98.15 B.




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Posted by Martin January 10, 2019
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Abbott Labs raises dividends by 14.29%


Abbott Laboratories (NYSE: ABT) raised their dividend by 14.29% to $0.320 a share with ex-date on January 14th, 2019 and pay date on February 15th, 2019 from previous $0.280 a share dividend rate.

This makes ABT a dividend challenger with a track record of 7 consecutive years of dividend increases. However, in our watch list, the stock is still not a buy despite the recent market correction. The stock still seems overvalued at the current price of $69.08 a share.

Our calculated fair value is $30.30 a share, average 5 year dividend yield 2.05%, there fore we rank this stock as a hold.




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