September is over! What a month! We were used to sharp declines and even sharper recoveries but in September, this was a slow and dreadful decline. That’s why it possibly felt so painful. The market was literally declining the entire month. We only had a few green days that were sold off the very next day. The dip buyers simply refused to step in and buy the dip on all sorts of fears, bogus or real. In this investing and trading report, we will report our performance, investing and trading in stocks and options, and how we dealt with this market.
Here is our investing and trading report:
| Account Value: | $79,220.48 | -$2,269.94 | -2.79% |
| Options trading results | |||
| Options Premiums Received: | $1,176.00 | ||
| 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: | $2,336.00 | +4.30% | |
| 05 May 2021 Options: | $6,346.00 | +9.22% | |
| 06 June 2021 Options: | $4,677.00 | +6.37% | |
| 07 July 2021 Options: | $3,865.00 | +5.14% | |
| 08 August 2021 Options: | $6,133.00 | +7.40% | |
| 09 September 2021 Options: | $2,353.00 | +2.97% | |
| Options Premiums YTD: | $40,061.00 | +50.57% | |
| Dividend income results | |||
| Dividends Received: | $45.86 | ||
| 01 January 2021 Dividends: | $53.04 | ||
| 02 February 2021 Dividends: | $63.00 | ||
| 03 March 2021 Dividends: | $30.31 | ||
| 04 April 2021 Dividends: | $139.70 | ||
| 05 May 2021 Dividends: | $167.45 | ||
| 06 June 2021 Dividends: | $168.56 | ||
| 07 July 2021 Dividends: | $228.62 | ||
| 08 August 2021 Dividends: | $780.09 | ||
| 09 September 2021 Dividends: | $176.60 | ||
| Dividends YTD: | $1,848.85 | ||
| Portfolio metrics | |||
| Portfolio Yield: | 4.37% | ||
| Portfolio Dividend Growth: | 8.13% | ||
| Ann. Div Income & YOC in 10 yrs: | $17,185.57 | 16.86% | |
| Ann. Div Income & YOC in 20 yrs: | $137,415.75 | 134.80% | |
| Ann. Div Income & YOC in 25 yrs: | $606,843.94 | 595.28% | |
| Ann. Div Income & YOC in 30 yrs: | $4,196,753.15 | 4,116.81% | |
| Portfolio Alpha: | 43.24% | ||
| Portfolio Weighted Beta: | 0.70 | ||
| CAGR: | 625.66% | ||
| AROC: | 50.85% | ||
| TROC: | 16.49% | ||
| Our 2021 Goal | |||
| 2021 Dividend Goal: | $1,071.42 | 172.56% | Accomplished |
| 2021 Portfolio Value Goal: | $42,344.06 | 187.09% | Accomplished |
| 6-year Portfolio Value Goal: | $175,000.00 | 45.27% | |
| 10-year Portfolio Value Goal: | $1,000,000.00 | 7.92% |
Dividend Investing and Trading Report
Two weeks ago, the market started looking great as we were recovering from the prior selling. But then it all went down the hill last Monday. As is typical for the markets, what you see was an overreaction. The media was telling us that the markets are afraid of inflation, labor shortage, high-interest rates, a slowing economy, Powell, China, debt ceiling, and ghosts. But many of the fears are typically bogus or part of a typical economic cycle. Nothing goes up forever. Be happy if it just slows down.
Last week we lost our net-liq value by 2.79%. Overall, in September our account lost -4.41% which is less than the entire market. The S&P 500 lost -5.7%. In this perspective, our account beat the market.
Our dividend income was steady, we have received $45.86 in dividends last week, closing September at $176.60 dividend income. However, our dividend projections changed from last week. Our overall future annual dividend income dipped. The culprit was OMF which was showing $743 annual dividend income for many weeks and it suddenly dropped to $280 a year dividend income. I couldn’t find any reason, the dividend has not been cut, so I can guess that in the previous weeks, special dividends were included. I will investigate more.
Here is what our dividend income looked like in the previous weeks, and here are our holdings today:
Options Investing and Trading Report
Our options income was spectacular in September. We closed the month with $2,353.00 options income but that is after we purchased LEAPS options worth $5,000.00. If we haven’t bought those options, our September income would have been $7,353.00 making it the best month ever. But we had to take the opportunity of the market selloff.
That’s why I like these selloffs as they truly present a great opportunity. Great income opportunity and great chance to buy more positions cheap.
Last week we didn’t trade any new trades although we could open 2 trades that expired in the last expiration cycle. According to our rules, we can reopen expired trades only but only if the buying power is above $2,000 or more and the new trades won’t drop the BP below that limit.
The entire last week, our BP was below that limit the entire week. Thus we couldn’t open any new trades.
We only rolled a few existing trades that were slipping and lowering our BP. Rolling those trades helped to release that BP. We rolled AES, AXP, BA, DKNG, KBE, MO, O, PBCT, SPY, TSN, and WEN strangles and spreads. All trades delivered great premiums and helped to release our buying power.
We only opened one new protective butterfly against SPY as a hedge. If S&P500 drops to $4,100 a share and the trade will be close to expiration, we will bank a nice premium that should offset any portfolio unrealized losses.
You can watch all our trades in this spreadsheet. You can watch the spreadsheet and look for a “NEW” indication next to the trading date. When the indicator shows up, it is typically good for up to 3 days to follow that trade.
Expected Future Dividend Income
Our dividend income was slower last week. We received $45.86 only for dividends but I am still happy with it. We are in an accumulation phase so I do not care much about the total amount of dividends I am receiving. I am building the portfolio and I know it will bring fruits later.
Our projected annual dividend income in 10 years is $17,185.57 but that is if we do absolutely nothing and let our positions grow on their own.
We are also set to receive a $3,948.98 annual dividend income. We are 22.98% of our 10 year goal. This is however a drop from our previous weeks due to OMF dividend reporting.
The chart above shows how our future dividend income is based on the future yield on cost and what dividend income we may expect in the future. The expected dividend growth depends on what stocks we are adding to our portfolio and the stocks’ 3 years average dividend growth rate. It is interesting to see what passive income we may enjoy 10, 20, 25, or 30 years from now.
Market value of our holdings
Our non-adjusted stock holdings market value decreased from $109,309.61 to $108,138.05 last week due to the market selloff.
However, we still expect the value of our holdings to grow and outperform the market long term. Many positions in our portfolio are new and “young” and they did not have enough time to show gains yet. We were building cash reserves to buy depressed stocks during selloffs and corrections as well as negative analysts reports (as long as the company is still good long term).
Our goal is to accumulate 100 shares of each stock of our interest and we are getting to that goal.
Investing and trading ROI
Our options trading delivered a 2.97% monthly ROI in September 2021, totaling a 50.57% ROI YTD. We again exceeded our 45% annual revenue selling options against dividend stocks target!
Our account grew by 285.08% beating our projections and the market.
Our options trading averaged $4,451.22 per month this year. If this trend continues, we are on track to make $53,414.67 trading options in 2021. As of today, we have made $40,061.00 trading options.
Old SPX trades repair
This week, we didn’t adjust any SPX trades. Our goal is to reach a level that we will be eligible for portfolio margin (PM). Once that happens, we plan on converting the existing SPX Iron Condors to strangles and trade these positions as strangles.
With RegT margin, the capital requirements would be approx. $66,586.06 and that is beyond our means. With PM the requirement for margin would drop to around $10k. That is doable in our account. Once we reach this level, we will start adjusting our SPX trades accordingly. Until then, we will just roll these trades around.
Accumulating Growth Stocks
Last week we have not bought any growth stocks because our BP value was below the $2,000 limit.
Accumulating Rules
Our rule is to buy shares of growth stocks using 20% of any BP value that is above the $2,000 limit. For example, if our BP ends at $2,900, we can buy shares using 20% of $900 or $180 to accumulate shares of any growth stocks.
Why such a rule? Up to today, I was scaling up my trades and portfolio. That resulted in rapid growth but also all our proceeds were constantly locked in the trades. If we want to live off of our dividends and options income, we cannot have them locked by new trades. We need to start accumulating “cash available to withdraw”. Therefore, I am shifting my trading to trade the same amount of contracts and invest only a certain excess of the accumulated cash.
Accumulating Dividend Growth Stocks
Last week, we didn’t add any new dividend growth stocks because our BP was below the limit the entire week. See our rules above.
Our goal is to reach 100 shares of high-quality dividend stocks and build a weekly dividend income as per this calendar, but we have made no changes to this goal last week:
You can see the entire spreadsheet here.
Market Outlook
The stock market sold off again last week reversing the previous recovery. The rest of the week was ugly. Historically, October is one of the best months, so if history repeats itself, we should see a nice EOY rally starting in October.
According to LPL Research, Octobers are not that bad and should initiate a rally well into November with some cool-off in December.
But that doesn’t mean, the beginning of October can be ugly. Mainly when the market morphed into a short-term downtrend channel. This is significant technical damage. We are now creating lower lows and lower highs and that is not good. It would take a lot of effort to break this channel and move higher. There is still a good chance that this will happen. Even historically after very ugly downtrends in 1998, 2000, 2004, 2007, 2010, 2015, 2018, and 2020, the market printed very good performance after for 1 year, 3 years, and 5 years periods to come.
We briefly approach close to the $4,500 target but the market didn’t have the strength to reach it or exceed it. We broke below $4,300 support and as of today, it appears that we will be going lower towards the 200-day moving average.
If you want to learn more about the stock market, events that moved the market last week and will likely impact it in the near future, I recommend you to subscribe to our weekly newsletter. Knowing where the market is heading and knowing when you should expect its reversal can benefit your trading and investing. Subscribe and you get one month free.
Investing and trading report in charts
Account Net-Liq
Account Stocks holding
Our stock holdings still do not beat the market but I am positive that the growth will pick up and exceeds the market. We just need time and continue reinvesting the proceeds. S&P 500 grew 50.62% since we opened our portfolio while our portfolio grew 22.30% only. On YTD basis, the S&P 500 grew 20.78% and our portfolio 15.32%.
But the numbers above apply to our stock holdings in our account, not the overall account net-liq growth. Our overall account beats the market growing by 285.08%!
Stock holdings Growth YTD
I expect our stock holdings to start outperforming the market as they mature. However, these are just our stock holdings. The entire portfolio beats the market by far thanks to monetizing those positions.
Our 10-year goal is to grow this account to $1,000,000.00 value in ten years. We are in year two and we accomplished 7.92% of that goal.
Our 6-year goal is to reach $175,000 account value to be eligible for portfolio margin (PM) and today we accomplished 45.27% of that goal.
Our 2021 year goal is to grow this account to a $42,344.00. We already accomplished this goal.
Investing and Trading Report – Options Monthly Income
Investing and Trading Report – Options Annual Income
Our dividend goal and future dividends
We have accomplished our dividend income goal. We planned to make $1,071 of dividend income this year and we finished receiving $1,848.85. However, we accumulated enough shares to start making $3,948.98 a year.
Our account cumulative return
The chart below indicates our cumulative adjusted return. It shows how the last week’s selloff shook down our returns but we are recovering along with the market.
As of today, our account cumulative return is 38.06% (note, data in this section are since March 13, 2021, only as that is the date we started tracking these metrics. Thus the results are skewed a bit and will show full picture next year.).
Conclusion of our investing and trading report
This week our options trading was within our expectations and I believe, the rest of the month will be even better.
We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares and continue building our cash reserves so we have enough cash to sustain any market corrections and be able to buy depressed stocks.
We will report our next week’s results next Saturday. Until then, good luck and good trading!
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