October 2021 is in the books and it was our best month ever. As you will see in this investing and trading report, our net-liquidating value increased by a whopping $14k, our premium income, selling options reached almost $9k and we met our dividend goal by receiving $250 this month. If all future months will look like this year’s October, I will be very happy. This performance is getting me closer to full-time trading. My plan is to start preparing for full-time trading once our account reaches the limit for portfolio margin. Once we get a portfolio margin, we will adjust our trading, create salary reserves, and start shifting to a full-time trading plan. Originally, I had a plan to reach this goal in 6 years but thanks to this trading progress we may be able to reach this goal two or maybe even three years earlier than planned. That will mean that I will finally achieve financial freedom.
Here is our investing and trading report:
| Account Value: | $94,045.84 | +$2,595.16 | +2.84% |
| Options trading results | |||
| Options Premiums Received: | $477.00 | ||
| 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% | |
| 10 October 2021 Options: | $8,721.00 | +9.27% | |
| Options Premiums YTD: | $48,782.00 | +51.87% | |
| Dividend income results | |||
| Dividends Received: | $86.32 | ||
| 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 | ||
| 10 October 2021 Dividends: | $256.73 | ||
| Dividends YTD: | $2,105.58 | ||
| Portfolio metrics | |||
| Portfolio Yield: | 4.21% | ||
| Portfolio Dividend Growth: | 8.13% | ||
| Ann. Div Income & YOC in 10 yrs: | $19,689.81 | 15.91% | |
| Ann. Div Income & YOC in 20 yrs: | $167,751.70 | 121.70% | |
| Ann. Div Income & YOC in 25 yrs: | $779,760.45 | 518.36% | |
| Ann. Div Income & YOC in 30 yrs: | $5,778,203.82 | 3413.83% | |
| Portfolio Alpha: | 44.94% | ||
| Portfolio Weighted Beta: | 0.66 | ||
| CAGR: | 632.73% | ||
| AROC: | 53.55% | ||
| TROC: | 13.41% | ||
| Our 2021 Goal | |||
| 2021 Dividend Goal: | $1,071.42 | 196.52% | Accomplished |
| 2021 Portfolio Value Goal: | $42,344.06 | 222.10% | Accomplished |
| 6-year Portfolio Value Goal: | $175,000.00 | 53.74% | |
| 10-year Portfolio Value Goal: | $1,000,000.00 | 9.40% |
Dividend Investing and Trading Report
Last week the stock market slowed down its pace upwards and we mostly rolled our trades. We also added SSO but that was all we did. We rolled AES, BABA, and SPY trades. It was a slow week for us but we already reached and exceeded all our goals this week so we could afford to stay aside.
We received $86.32 in dividends last week and that put our dividend income back on track with the plan.
We will keep growing our dividend growth portfolio, in fact, we stopped scaling up our options trading and will focus on adding more dividend growth stocks to our portfolio. Here you can see our dividend income per stock holding. I hope, it will grow faster now:
Options Investing and Trading Report
We generated $477.00 options income last week and that concluded October with total of $8,721.00 option income. The best month ever.
Last week we rolled a few of our positions but stayed quiet most of the time. We are also increasing our buying power minimum limit to $4,000 for November. The reason is to have some cash to be buying opportunities. In the recent past, when the market sold off, I couldn’t buy much because of not having enough cash. With this limit, I want to avoid that situation.
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
We received $86.32 in dividends last week. This income brings our income stream back to the original plan. I was disappointed last week with our dividend income and thought I may have done something wrong with tracking it. Looks like I am still OK.
Our projected annual dividend income in 10 years is $19,689.81 but that projection is if we do absolutely nothing and let our positions grow on their own without adding new positions or reinvesting the dividends.
We are also set to receive a $4,049.13 annual dividend income. We are 23.59% of our 10 year goal of $19,689.81 dividend income.
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 increased from $118,822.58 to $121,107.63 last week.
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 9.27% monthly ROI in October 2021, totaling a 51.87% ROI YTD. We again exceeded our 45% annual revenue selling options against dividend stocks target!
Our account grew by 357.15% beating our projections and the market.
Our options trading averaged $4,878.20 per month this year. If this trend continues, we are on track to make $58,538.40 trading options in 2021. As of today, we have made $48,782.00 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 added shares of SSO to our holdings according to our plan and rules. Our goal for the nearest future is to accumulate 25% of our net-liq in these shares and maintain the weight. If the weight goes above 25% we will start trimming the positions, and when the weight goes below 25% we will start accumulating the positions. Any leftovers will be reinvested to the dividend growth stocks, options trades, or reserves.
Accumulating Rules
Our rule is to buy shares of growth stocks using 20% of any BP value that is above the $3,000 October limit. For example, if our BP ends at $3,900, we can buy shares using 20% of $900 or $180 to accumulate shares of any growth stocks. For November 2021, we are increasing this limit to $4,000 and we will invest 20% of anything above this limit. Once we reach the $10,000 limit we will start scaling up our options trades again.
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.
Another reason, of course, is to have enough cash to buy opportunities when the market crashes or corrects. As is typical, Wall Street usually overreacts (stupidly) and I want to buy shares when the market is in panic. Like in March 2020. I bought some shares but I wish, I had more free cash. I would buy more.
Accumulating Dividend Growth Stocks
Last week, we didn’t add any new dividend stocks to our holdings. We are still accumulating SSO and SPXL, but from now on we may start adding some dividend stock again (of course, when the BP is above the limit as per our rule).
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
I expected the market to correct a bit or pull back the recovery. We had a short (just two days) pause on Tuesday and Wednesday last week but then the market shot up again and didn’t look back. If you are asking why or what moved this market the way it did, then the reason was earnings. Companies still report strong earnings and beat expectations. They also provide positive outlooks for the next earnings. Although some companies, such as Apple and Amazon cited supply chain issues as to why they missed their revenue, the market shrugged it off because it considered it a short-term issue that will go away. If you look at the APPL and AMZN chart, the stock opened down but rallied the rest of the day. The market didn’t consider the supply chain to be an issue. If you are a subscriber to my newsletter, you will get another issue this weekend and I will describe this more in detail.
This was my last week’s expectation about the market’s move. I expected a pullback. We had a slight pause instead:
Understand, that it is earnings and earnings outlook that moves the market. Nothing else. Everything else is completely irrelevant. If you want to see why a market or a stock moved the way it did, look at earnings. There probably was some change in the guidance or analysts may have adjusted their expectations. There are a few analysts that I follow and they regularly publish their outlooks based on companies’ earnings and guidance they provide. Look for earnings per share for the entire market and that will give you all information you need to calculate the intrinsic value of the market. And if the market or stock moves but earnings or outlooks didn’t change, you can be assured that such a move is just noise. In that case, you can safely buy the dip.
Here is what happened last week:
We didn’t see much bouncing last week but headed directly to a new all-time high. And I expect this trend to continue higher. The $5,000 target is still in play.
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
Last week, S&P 500 grew 58.90% since we opened our portfolio while our portfolio grew 31.45%. On YTD basis, the S&P 500 grew 29.05% and our portfolio 24.47%.
Our portfolio, again, grew faster than the overall market and we are pairing this year’s market performance. I expect this trend to continue in the next few years.
The numbers above apply to our stock holdings only. Our overall account net-liq grew by 357.15% this year! This is thanks to options trading that generates income. It can be also seen how the options help lower our cost basis. Just compare the P&L in the regular (left) column with the P&L in the “Options adjusted” column. For example, our AES holding would be a loser as of today (down -2.47%), but we generated enough income (we can call it also a return of our invested capital) and that position is 132.11% up.
Stock holdings Growth YTD
I expect our stock holdings to start outperforming the market very soon. 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 9.40% 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 53.74% 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 $2,105.58. However, we accumulated enough shares to start making $4,048.13 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 56.18% (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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