Weekly Newsletter   Challenge account


2021 Week 14 investing and trading report

The first week of April is over and it is time to provide our weekly investing and trading report again. Our portfolio growth seems to be gaining steam and growing faster than before. We continued the aggressive accumulation of stocks that we like because they pay us dividends while we wait for them to appreciate in their value. We also continued aggressive options trading bringing in more income that can be reinvested.

This week, we doubled our account and met our annual portfolio net-liquidating value goal!

 

Here is our investing and trading report:

 

Account Value: $42,606.35 +$1,492.13 +3.63%
Options trading results
Options Premiums Received: $885.00    
01 January 2021 Options: $4,209.00 +16.65%  
02 February 2021 Options: $4,884.00 +15.41%  
03 March 2021 Options: $5,258.00 +12.79%  
04 April 2021 Options: $878.00 +2.06%  
Options Premiums YTD: $15,229.00 +35.74%  
Dividend income results
Dividends Received: $0.71    
01 January 2021 Dividends: $53.04    
02 February 2021 Dividends: $63.00    
03 March 2021 Dividends: $30.31    
04 April 2021 Dividends: $42.21    
Dividends YTD: $188.56    
Portfolio metrics
Portfolio Yield: 4.04%    
Portfolio Dividend Growth: 7.47%    
Ann. Div Income & YOC in 10 yrs: $6,050.48 13.84%  
Ann. Div Income & YOC in 20 yrs: $37,610.31 86.02%  
Ann. Div Income & YOC in 25 yrs: $133,036.96 304.28%  
Ann. Div Income & YOC in 30 yrs: $665,041.94 1,521.06%  
Portfolio Alpha: 26.78%    
Portfolio Weighted Beta: 0.88    
CAGR: 756.99%    
AROC: 35.98%    
TROC: 23.62%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 17.60%  
2021 Portfolio Value Goal: $42,344.06 100.62% Accomplished

 

We continued accumulating our stocks to achieve our dividend weekly dividend income. We accumulated shares in Realty Income (O), ABBV, AAPL, and we finished accumulating (we reached 100 shares) AES according to our plan. I also decided to start increasing holdings in AT&T (T) stock. Our non-adjusted stock holdings market value increased from $44,923.51 to $47,486.85.

 
Stock holdings week 14
 

Last week, we received $885.00 in premiums trading options against our holdings. For the entire April 2021, we received $878.00 premiums, and all our income was reinvested.
 

Open trades

 
Investing and trading report
 

The table above shows all our open trades and expirations. It is just a simplified tracking and buying power reduction. Our goal is to trade a set amount of equity strangles in what I call perpetual strangle trading. It is nothing fancy. I just have a list of equities I like to trade options around them, I like to eventually own and I accumulate these stocks. Once a trade expires (or nears expiration) I re-open the trade or roll it into the next expiration (mostly trades that a stock is near the short strike and there is a risk of getting in the money).

We opened new trades last week. The BP reduction increased from $37,123.70 to $39,451.90, a reduction of +$2,328.20 or +6.27%.

 

Investing and trading ROI

 

Our options trading delivered a 2.06% monthly ROI, totaling a 35.74% ROI.

Our account increased to 107.10% YTD growth. This means, we just doubled our account.
 

Our options trading averaged $3,807.25 per month this year. If this trend continues, we are on track to make $45,687.00 trading options in 2021.
 

We are still on track to complete goals in our portfolio. We made slight adjustments and we are providing our comments to our goals and tasks we set up in the week 6 report:
 

Old SPX trades repair

 

This week we have not done any adjustments to our old SPX trades. We are still sitting on those trades and waiting for the untouched side to close so we can roll the trades again. The goal will be to roll the trades until we will be able to close them for at least break even and release the buying power. We will keep doing this only if the resulting trade will be a credit trade or a very small debit. If adjusting these trades would require adding more new money, we would rather close these trades and move on.

 

Accumulating Growth Stocks

 

In the last few weeks, I was accumulating Tesla (TSLA) stock. This week we have not bought any new shares. We started trading Iron Condors against Tesla to start lowering our cost basis.

We are also accumulating g Apple (AAPL) stock although last week we have not purchased any new shares.

 

Accumulating Dividend Growth Stocks

 

Buying high-quality dividend stocks is our core strategy. And we will continue to do so and at a faster pace. I continued accumulating Realty Income (O) this week and as of today, we hold 60 shares.

We also accumulated ABBV and AES stocks. We increased our position in ABBV to 17 shares, and we reached 100 shares in AES company.

We started accumulating PMX shares (a tax-free municipal bond fund). We currently hold 40 shares and plan to reach 100.

Our goal is to not only reach 100 shares of high-quality dividend stocks but also create a weekly dividend income from these stocks All it takes to create a weekly dividend income is to buy 12 stocks to spread the income for every week. I created this dividend calendar and track the stocks I want to buy to get this goal done fast.
 

Weekly dividends income calendar
 

As you can see in the table above, we are reaching our weekly dividend income goal as almost all weeks are filled with dividend income. All that is missing is February and March first week “slot” (and subsequent months) but others are already filled. April should deliver an income every week. After we add all weeks, we will start increasing shares so the income is larger and larger every week. Also, note that I have included holdings of 100 shares in this table only. So, for example, we own 17 shares of AAPL and therefore it is not yet included in this table although we will receive income next month.

 

Market Outlook

 

The market continues playing according to the expected price move. I still expect this market to hit the $4,200 mark in the near future. I expected this moe, but I have not expected this “straight-up” move. But I am happy with it, too.

 
SPX April 02 2021 outlook
 

 

Trading options

 

We continue trading options around the stocks we own or plan to own. I call it monetizing our positions. It has a threefold benefit. It lowers our cost basis (at some point we will own all our shares for free), covers our call sides of each trade, and generates an additional income on top of the dividends. And that income is significant as you can see from our report at the top of this post.

We added a few new trades to our portfolio and we are close to having our trading “full”, or be fully invested. Once that happens, we will start trading multiple contracts. As of now, we mostly trade one contract of strangles. I am still thinking about building a ladder using LEAPS against SPY and AAPL as of now but not yet decided.

 

Investing and trading report in charts

 

TW Account Net-Liq week 13
 

Our aggressive accumulation of dividend stocks, using proceeds from aggressive options trading (by “aggressive” I do not mean reckless, but using all available funds and be fully invested at all times), is delivering fruits. Our net liquidation value increased significantly this year. I expect this trend to continue. I am also preparing our account for portfolio margin and once we achieve the required net-liq value, I will add this feature to our account. I hope to be able to trade a bit more aggressively. And yes, I am aware of potential risks.

 
TW Account holdings week 14
 

The table above shows our current holdings and gains on those holdings. Adjusted columns indicate how options help to boost (or ruin) our stock holdings appreciation, or in other words, lowering the cost basis. Without options, our holdings would be up 8.61%. With options, our holdings are up 14.93% (from inception on 4/1/2019). The SPX is up 42.73% since inception. Since the inception of the fund, our stock holdings underperform the overall market (up only 14.93% on a cumulative basis). This week, our adjusted stock holdings underperformed the market. The market gained 12.89% YTD, our portfolio options-adjusted stock holdings grew by 7.95% YTD. This includes stock holdings adjusted by options trading, not the entire portfolio. If we include the entire portfolio and options trading, we beat the market significantly.
 

TW Account holdings Growth YTD
 

The stock holdings growth slowed down because we added many new positions and these positions didn’t have time to grow yet, so I expect the growth trend to improve over time and beat the market.

 
TW Options Income week 14
 

TW Options Annual Income week 14
 

 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 14
 

I have added another view into our holdings and their expected performance. Below is a chart of all future expected dividends on our holdings. The chart above indicates our dividend goal rather than expected dividends, the new chart below indicates our holdings and their dividend payouts vs. received payouts. In other words, these are the dividends we should receive if we held these positions at the current level since January 1st. But because we have not held those positions since January, we will not be able to receive those dividends. We added new positions just recently so all dividends that are included in the “projected” value were not paid to us. But, if we stop investing now, the “projected” dividend value (currently $1,866.22) is the annual dividend rate we should be receiving as passive income every year without touching anything in our portfolio.
 

TW Received vs Future Dividends week 14

 

Our account cumulative return

 

This is another metric I started tracking (since March 13, 2021) recently.
 

TW cumulative return wk 14
 

As of today, our account cumulative return is 17.45% (since March 13, 2021).

 

Conclusion of our investing and trading report

 

This week our options trading was great and we created a lot of income making March our best month so far.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares. We will also replenish our cash reserves to bring them back to 25% of our current net-liq value.

We will report our next week’s results next Saturday. Until then, good luck and good trading!





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