Weekly Newsletter   Challenge account


2021 Week 46 investing and trading report

November is almost over and I am disappointed so far. Our net-liq dropped last week, our stock holdings were shaken down a bit (mostly by my mistake with APPL strangle that I forgot to roll), our options income was low so far. The only item that was in line with plans was dividends. This investing and trading report will be a hard one to write, admitting that it wasn’t a good week and a good month. But, all previous months were great, and I think, I don’t have to push it further. I made $50,000 in options income this year. Most I have ever made in my life.

 

Here is our investing and trading report:

 

Account Value: $94,185.00 -$1,655.36 -1.73%
Options trading results
Options Premiums Received: $469.00    
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: $1,853.00 1.97%  
Options Premiums YTD: $50,635.00 +53.76%  
Dividend income results
Dividends Received: $230.93    
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: $349.82    
Dividends YTD: $2,471.25    
Portfolio metrics
Portfolio Yield: 4.51%    
Portfolio Dividend Growth: 8.13%    
Ann. Div Income & YOC in 10 yrs: $17,554.15 17.77%  
Ann. Div Income & YOC in 20 yrs: $146,305.30 148.08%  
Ann. Div Income & YOC in 25 yrs: $668,119.64 676.23%  
Ann. Div Income & YOC in 30 yrs: $4,834,140.43 4,892.84%  
Portfolio Alpha: 48.05%    
Portfolio Weighted Beta: 0.52    
CAGR: 599.05%    
AROC: 42.99%    
TROC: 11.57%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 230.65% Accomplished
2021 Portfolio Value Goal: $42,344.06 222.43% Accomplished
6-year Portfolio Value Goal: $175,000.00 53.82%  
10-year Portfolio Value Goal: $1,000,000.00 9.42%  

 

Dividend Investing and Trading Report

 
Last week we have received a good portion of dividends. That was the only bright side in November investing and trading. All other metrics dropped but dividends. Our dividend income is still well in line with our goals and plans. We planned on receiving $472.82 in dividends in November and so far we have received $349.82 income. Last week, we received $230.93 in dividends that helped our overall November’s dividend income.

Here you can see our dividend income per stock holding:

 
Annual Dividend Payout week 46
 

Options Investing and Trading Report

 
We generated $469.00 options income last week. It is horribly slow and I am disappointed with this income. I hoped I would be able to make more. But we had expiration Friday last week and 10 trades expired worthless and one trade got assigned. Our Apple (APPL) call got in the money by 55 cents and I didn’t pay attention to it. I thought it would expire worthless so I turned off the computer and went away. The stock rallied hard on the EV bubble and got in the money.

We owned 41 shares and these were sold. We are now short 59 shares that we will buy back on Monday and buy back our 41 shares holdings (we may buy more shares though).

Last week we only rolled trades to release the BP and re-center strikes to the market price. We opened another Tesla short-term put spread and collected premium.

Since we had expiration Friday last week, I expect re-opening trades next week that may boost our options income for November. I hope that will bring our income back to levels I would like to see.
 

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 $230.93 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 4.51% at $94,185.00 market value. I think this is not a bad result.

 
Our projected annual dividend income in 10 years is $17,554.15 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 $4,492.88 annual dividend income. We are 25.59% of our 10 year goal of $17,554.15 dividend income.

 
Future Divi on YOC week 46
 

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 $128,089.83 to $109,599.80 last week. This is the biggest disappointment to me, although the drop was caused by Apple assignment and Tesla repositioning. It is a temporary drop. We have not lost money, but increased cash. But it looks bad on paper.

Next week, as we will be buying back shares and buying more, I expect these numbers to return back to their previous levels.

 
Stock holdings week 46
 

As you can see in the chart above, our APPL holding is now negative due to the assignment. It will be corrected next week. After that, I will be able to see the overall trade result. We collected 1.83 in premiums and if we close the trade at the current Apple price, we will lose 0.55 only. The strangle will still be profitable (excluding profits from the shares).

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 1.97% monthly ROI in November 2021, totaling a 53.76% ROI YTD. We again exceeded our 45% annual revenue selling options against dividend stocks target!

Our account grew by 357.82% beating our projections and the market.
 

Our options trading averaged $4,603.18 per month this year. If this trend continues, we are on track to make $55,238.18 trading options in 2021. As of today, we have made $50,635.00 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 added Tesla back to our holdings. We also added a few more shares of RIVN although I was not sure if that was a good move. RIVN is a very speculative trade to me. I hope the stock will be driven by other investors’ greed, being worried that they were late on Tesla, and now jumping into RIVN, and moving the stock higher. So pure speculation on others FOMO. And the only reason for believing in this plan is that Amazon and Ford have stakes in this company. If it wasn’t backed by them, I wouldn’t gamble.

We also added shares of SSO shares according to our plan.

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.

Currently, we hold 13.28% in SSO and SPXL shares, so getting close to our goal of accumulating these positions. My plan is that when fully accumulated, our portfolio will go up faster than the market (and down faster too, but downtrends are shorter and always recover at some point) and that will help us outperform the market two to three times over the long haul. During the bear markets, we will be accumulating to hold our 25% level, during the bull markets we will be trimming our position and saving the cash for the bear markets.

 

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. In December 2021, we plan on increasing the limit to the $5,000 level.

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 added MSFT to our holdings only.

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:
 

Weekly dividends income calendar
 
You can see the entire spreadsheet here.

 

Market Outlook

 

The market behaved exactly as expected. With no catalyst such as earnings, we were going sideways. But most stocks were selling last week. If you are a subscriber to our newsletter, I wrote last week that the market reached the 1 SD level driven by a strong earnings season and that we will stop at that level. We could bounce down or go sideways. The market stayed elevated on upcoming holiday retail sales expectations. Seasonally, November is a very good month for stocks, the first week is usually a strong rally, then a choppy flat rest of the month. We are following this trend to the tee.

Here is what happened last week:
 

SPX 2021 1121

 
As you can see, the market was hugging the top 1 SD level and consolidating just below it. On Friday, it even moved above it but retreated by the end of the day.

But look at what the options market is pricing in! The expectations are that we will see a very strong rally towards the end of the year. This will be interesting to see how it plays out.

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

 

TW Account Net-Liq week 46

 

Account Stocks holding

 
TW Account holdings week 46
 

Last week, S&P 500 grew 62.41% since we opened our portfolio while our portfolio grew 27.97%. On YTD basis, the S&P 500 grew 32.56% and our portfolio 20.98%.

The numbers above apply to our stock holdings only. Our overall account net-liq grew by 357.82% 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 -6.24%), but we generated enough income (we can call it also a return of our invested capital) and that position is 127.25% up.
 

Stock holdings Growth YTD

 
TW Account 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 9.42% 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 53.82% 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

 
TW Options Income week 46
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 46
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 46
 

We have accomplished our dividend income goal. We planned to make $1,071 of dividend income this year and we finished receiving $2,471.25. However, we accumulated enough shares to start making $4,492.88 a year.
 

TW Received vs Future Dividends week 46

 

Our account cumulative return

 

The chart below indicates our cumulative adjusted return.
 

TW cumulative return wk 46
 

TW win ratio wk 46
 

As of today, our account cumulative return is 56.41% (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!





Leave a Reply

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