Weekly Newsletter   Challenge account


2021 Week 3 results

Another week of 2021 is over and it is time to post the results of our trading. But before I proceed to list my achievements of this past week, I want to share an idea of creating a weekly dividend income.

A fellow investor on social media, where I posted my weekly dividend calendar asked me why I decided to do a weekly payout calendar and not just a monthly one because the weekly calendar seems too complicated to track. I disagree with this conclusion. I am accumulating our portfolios one stock at a time and it was easy to create the calendar and keep track of each stock being accumulated.

But I got into this idea when evaluating my account #3. I wanted to grow this account faster and reinvest the dividends but when I finally decided on the plan there were no dividends coming in. In November 2020, I have received tons of dividends that allowed me to finish accumulating AT&T in that account and since then I was painstakingly waiting for the next payout. And I only received a few dollars here and there. It was frustrating, given that in this account, I had approx. 40 different companies. So I checked their payout days and found out that the majority of them pay dividends in February and most of them in the second week of February (and subsequent months). So, I receive dividends in February, May, August, and November. In other months I get just a few pennies or a few dollars only. I wait dry with nothing to do. And that was an eye-opener that I have decided to select stocks I like to own in a manner to create more even dividend distribution across all months and weeks. And, since I try to trade weekly options, I decided to accumulate my stocks to get weekly dividends too.
 

But now, let’s jump to our trading results:

 

Account Value: $26,067.20 +$3,420.71 +15.10%
Options Premiums Received: $305.00
January 2021 Options: $2,215.00 +9.78%
Options Premiums YTD: $2,215.00
Dividends Received: $0.00
January 2021 Dividends: $41.58
Dividends YTD: $41.58
Portfolio Yield: 3.59%
Portfolio Dividend Growth: 5.91%
2021 Portfolio Value Goal: $42,344.06

 

This week we received $305.00 in premiums, a total of $2,215.00 for the entire month so far. That is a 9.78% return on investment for January 2021.
I also started depositing $1,000 a month to our portfolio. That was also my goal to grow the portfolio faster. The goal value of $42,344.06 above includes the deposits of $12,000 per year. I am still paying off my personal debt and once that is paid off, I will be depositing another $1,000 per month. But, that is the future.
 

TW Account Net-Liq
 

TW Account holdings
 

The table above shows our current holdings and gains on those holdings. Adjusted columns indicate how options help to boost (or ruining) our stock holdings appreciation, or in other words, lowering the cost basis. Without options, our holdings would be up 7.60% with options, our holdings are up 10.65% (from inception on 4/1/2019). The SPX is up 32.80% since inception. So our stock holdings do not beat the market. We still beat the market thanks to trading options and generating additional income as you can see below. The market grew 2.95% YTD, our portfolio stock holdings grew by 3.67% (note this includes stock holdings adjusted by options trading, not the entire portfolio).
 

TW Account holdings Growth YTD
 

TW Options Income week 3
 

TW Options Annual Income week 3
 

TW Received vs Projected Dividends week 3
 

January 2021 started well so far and we are on track to meet and exceed our goal. My anxiety over this market is growing, however. I am happy with the market’s growth and our stocks going higher, but I can also see a lot of irrational behavior from investors out there. I stopped understanding these investors, mostly young guys, and sorry to say, mostly completely ignorant about what they are doing. Just go to YouTube or other social media channels and you will see tons of your guys boasting about their investments chasing pretty much worthless stocks or companies that make absolutely no money, no revenue, no product. They just buy these companies out of their pure existence. That’s it. Traditional values of investing, buying high-quality companies that create something and generate value are gone. Nowadays, chasing bankrupted companies such as Hertz (HTZ), Chesapeake Energy (CHK), or penny stocks that serious investors wouldn’t touch with a ten-foot-long pole are in. The funny part of all this is that many of these gamblers became rich overnight chasing these strategies and many of them became extremely cocky trying to arrogantly explain to you that your approach is stupid and that you should invest in bitcoin, or some unheard of penny stock and become rich overnight too. That is why I stepped down from social media lately (I am still present in there but very little compared to what I used to de before). I can’t stand these gamblers and their ramblings.

It will come to an end one day.

There are a few exceptions though. One of them is Daniel Pronk. I think, his insights make sense and he is looking at investing from traditional, rational evaluation of investments before deploying money. His recent video about the irrational behavior of this market and the market’s participants is exactly what I tried to describe above. We do not know whether the market would crash in 2021, no one knows, even Daniel acknowledges it, but his reasons for this bubble-like market are extremely valid.

 

 

That is the reason why I am still raising cash (investing it into the ICSH fund) for rainy days in the stock market and a potential bubble burst. That is why most of my premiums and dividends will be parked in the ICSH fund to sustain the crash should it happen. The market shows weakness and I want to have enough cash to cover naked trades (making them cash-secured). We are still seeing a Christmas rally momentum but it is weakening and if we look back in history, we may expect up to four corrections a year. I want to be able to survive that correction without forced losses.





2 responses to “2021 Week 3 results”

  1. Dale says:

    Request new post notification

Leave a Reply

Your email address will not be published. Required fields are marked *