As you will be able to see in today’s investing and trading report, November is moving forward slowly. Our net-liq has added only a hundred dollars and our options income is small too. Our dividend income jumped nicely but it is still small too. We are fully invested and there is little we can do to boost our income. Next wee is an expiration week and we have 11 trades expiring. If nothing violent happens in the markets, these trades should expire and release over $13,000 of buying power. We will be reinvesting that buying power and that should boost our options income.
Here is our investing and trading report:
| Account Value: | $95,840.36 | +$139.72 | +0.15% |
| Options trading results | |||
| Options Premiums Received: | $628.00 | ||
| 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% | |
| 11 November 2021 Options: | $1,384.00 | +1.44% | |
| Options Premiums YTD: | $50,166.00 | +52.34% | |
| Dividend income results | |||
| Dividends Received: | $108.54 | ||
| 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 | ||
| 11 November 2021 Dividends: | $118.89 | ||
| Dividends YTD: | $2,240.32 | ||
| Portfolio metrics | |||
| Portfolio Yield: | 4.10% | ||
| Portfolio Dividend Growth: | 8.13% | ||
| Ann. Div Income & YOC in 10 yrs: | $17,815.23 | 15.31% | |
| Ann. Div Income & YOC in 20 yrs: | $132,261.71 | 113.64% | |
| Ann. Div Income & YOC in 25 yrs: | $549,967.09 | 472.55% | |
| Ann. Div Income & YOC in 30 yrs: | $3,505,937.34 | 3,012.43% | |
| Portfolio Alpha: | 45.69% | ||
| Portfolio Weighted Beta: | 0.62 | ||
| CAGR: | 615.29% | ||
| AROC: | 53.52% | ||
| TROC: | 14.34% | ||
| Our 2021 Goal | |||
| 2021 Dividend Goal: | $1,071.42 | 209.10% | Accomplished |
| 2021 Portfolio Value Goal: | $42,344.06 | 226.34% | Accomplished |
| 6-year Portfolio Value Goal: | $175,000.00 | 54.77% | |
| 10-year Portfolio Value Goal: | $1,000,000.00 | 9.58% |
Dividend Investing and Trading Report
Last week the stock market retreated from highs as I expected. Earnings season that moved the market up is over moved and with no catalyst fear took over again. We didn’t trade any dividend stocks last week and so our dividend income is in line with the previous projections. We received $108.54 in dividends last week, bringing November to $118.89 total dividends.
Here you can see our dividend income per stock holding:
Options Investing and Trading Report
We generated $628.00 options income last week. It is slow so far but next week we have expiration Friday and we have 11 trades that are set for expiration. If they expire, we will be re-opening those trades the following week and that would boost our November income. We have over $13k of buying power tight up in those trades it should be released at expiration.
Last week we mostly closed or rolled trades to release the BP and re-center strikes to the market price. We opened Tesla short-term put spread and collected premium. We closed the trade for a profit on Friday since the stock was not moving in our direction so early closure was justified.
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 $108.54 in dividends last week. It is still a very small income and I wish it could be larger than that but our stock holdings are still relatively small and “young” to show the full strength of the dividend investing. Our portfolio currently yields 4.10% at $95,840.36 market value. I think this is not a bad result.
Our projected annual dividend income in 10 years is $17,815.23 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 $4,069.72 annual dividend income. We are 22.84% of our 10 year goal of $17,815.23 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 $126,668.98 to $128,089.83 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 1.44% monthly ROI in November 2021, totaling a 52.34% ROI YTD. We again exceeded our 45% annual revenue selling options against dividend stocks target!
Our account grew by 365.87% beating our projections and the market.
Our options trading averaged $4,560.55 per month this year. If this trend continues, we are on track to make $54,726.55 trading options in 2021. As of today, we have made $50,166.00 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 placed a stop-loss order for Tesla stock as Elon Musk announced selling 10% of his stake in the company to pay taxes. Later, bad news came from China sales and the stock tanked over 12%. Our stop loss got hit and we sold our position. I did it to protect our gains and there was a chance that the stock would go lower and could hit $900 or even $700 level. We bought in at $620 average price and if the stock moved that low, we would lose all our gains. But the stock didn’t seem to continue lower. It found strong support at $1,000 and bounced from there. So we bought back our shares at a slightly lower price and placed a new stop-loss in case this is really just a bounce before the stock reverses down again. If it does reverse down, we may repeat the process. If it doesn’t, I expect the stock to go to $1,400 – $1,500 level.
We also added shares of SPXL, SNOW, RINF, and RIVN to our holdings according to our plan and rules.
With SPXL and SSO, our goal for the nearest future is to accumulate 25% of our net-liq in SSO and SPXL 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.
The RINF is an inflation expectation ETF that should gain when fear of inflation is rising. It tracks and invests in TIPS and I think that with all the hyper-inflation talks, a small exposure to the interest-adjusted bonds wouldn’t hurt. Although, when looking at the sharts, there is little to no fear of inflation by the market participants.
RIVN is a recent EV IPO and I think, with all the hype and other big players’ interest in this stock, this investment may pay off. So I also initiated a small position. I may be adding to it or just sitting on it. I may also place a stop-loss on this trade.
Accumulating Rules
Our rule is to buy shares of growth stocks using 20% of any BP value that is above the $4,000 November limit. For example, if our BP ends at $4,900, we can buy shares using 20% of $900 or $180 to accumulate shares of any growth stocks. 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 dividend growth stocks to our portfolio.
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
After a very strong rally, the market reached the 1st SD (standard deviation) and it was more than obvious that we will bounce from that level. And we did bounce. There was no longer any catalyst for the market to move higher. The earnings season that provided us with the second-best earnings reports was over, so fear of inflation and falling skies took over again and the markets retreated.
But the retreat was mild, almost unnoticeable. If the hyperinflation fears and talks were such a big deal, the markets would already collapse and lose 10% or more percent. But none of it happened. The market lost a mere 1.86% from its peak and on Friday a strong rally almost erased all losses.
Here is what happened last week:
The market’s move was strong but picture-perfect. Like from a trading book. It reached the level of $4,710 which was a price level determined by the options market at the beginning of the expiration cycle. The big options players watch these levels and adjust their positions accordingly if the market moves towards one or the other level, they start hedging their positions which could fuel a further move towards those levels. Once the level is reached, they close the position and that sparks a retreat.
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 61.88% since we opened our portfolio while our portfolio grew 27.49%. On YTD basis, the S&P 500 grew 32.04% and our portfolio 20.51%.
Our portfolio stock holdings growth got hit by Tesla adjustments as our cost basis changed. But I do not think this is a big deal.
The numbers above apply to our stock holdings only. Our overall account net-liq grew by 365.87% 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 -5.71%), but we generated enough income (we can call it also a return of our invested capital) and that position is 128.54% 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 9.58% 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 54.77% 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 $2,240.32. However, we accumulated enough shares to start making $4,069.72 a year.
Our account cumulative return
The chart below indicates our cumulative adjusted return.
As of today, our account cumulative return is 59.16% (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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