Ticker Tape by TradingView
Weekly Newsletter   Challenge account   Weekly Newsletter   


Posted by Martin May 23, 2013
8 Comments



 




An ultimate dividend payer


Realty IncomeAlthough you won’t find a perfect stock across the market floor, there is one which earned attention of millions of income seeking investors. You won’t find too many companies out there which mission is to provide income. I am talking about a California-based real estate investment trust – Realty Income (O).

It may not be a perfect stock, but it is getting closer to that definition.

This monthly dividend paying stock was beaten severely down by Mr. Market these last two days. To me the drop provided enough correction to consider adding shares to my holdings.

If you want to find why the stock fell, you probably won’t find a meaningful reason. Most of the blatant explanations out there would be circling around Big Ben’s proclamations, visions, speeches or who knows what and insane investors out there guessing what impact that may have to the nearest market’s future.

Who cares? All I care about is whether this stock will be able to continue paying the promised dividend or not.

The company has been paying dividends for consecutive 19 years and it has been raising it for consecutive 15 years. It paid dividends and raised it during 1998 – 2000 severe drop (the stock lost 30%) but the dividend never dropped, was never cut or suspended.

There are other great companies I was looking at possibly buying, such as AGNC, PPL, AT&T (T), WMT, and many others which were beaten down by market participants’ irrationality, but I decided to accumulate Realty Income stock and add more shares.

I am not buying out right, but again I will use a contingency order to buy only if the stock reverses. I entered the following order:

If the last of O is greater or equal to 51.7
Buy 19 O at limit $51.7

 

If the stock continues falling, the order will not execute and I will be lowering the buy price along with the new lower stock price. If the stock reverses and continue moving up, the order activates the limit order and I will buy 19 more shares.

I have two reasons for adding this stock. One reason is that this is a good, stable, and reliable dividend payer, the second reason is that with this purchase I will exceed 100 shares and I am planning on applying covered call strategy (although I will be very careful with this strategy, because Realty Income is not a stock I want to have called away).

What do you think? DId Realty Income dropped low enough to buy or would you wait more?

 




We all want to hear your opinion on the article above:
8 Comments



Posted by Martin May 23, 2013
7 Comments



 




I miss my spam!

I miss my spam!

This post will be a bit off topic. But it will demonstrate how crazy and retarded I became about blogging and checking comments.

I used to receive 90 – 100 spammy comments every day. All of them were captured by Akismet. But time to time a legit comment was detained and I didn’t want to miss those comments, so every day I browsed thru the spam to see if there are some legit posts.

Recently, I installed another feature eliminating spam and I now have ZERO spam! Opening my admin dashboard on my blog is now so boring! I miss my spam! Can you believe how crazy I am!?




We all want to hear your opinion on the article above:
7 Comments



Posted by Martin May 20, 2013
2 Comments



 




Commission free wealth building new trade RWX

Commission free wealth building new trade RWX

Another recent flow of trades I realized last week on Friday was a purchase of a commission free ETF SPDR Dow Jones International Real Estate ETF (RWX).

This trade is a part of my small money investing experiment. Thus on Friday I invested $91.18 to buy 2 shares of this dividend paying REIT. This ETF pays 5.83% annual dividend and 5.79% distribution yield. I bought this ETF into my ROTH IRA account and I will continue investing all small money (received dividends and contributions) into this commission free ETF as long as I save enough money to buy a lot of a stock of my interest.

To do that if I save let’s say $1100 in this ETF, I will sell $1000 worth of the holdings and buy a stock, while continue saving small contributions and dividends into this ETF to raise the holdings back up to $1100.

Then rinse and repeat…

Here is the trade from last Friday:

5/17/2013 14:58:28 Bought 2 RWX @ 45.589

Happy commissions free wealth building!




We all want to hear your opinion on the article above:
2 Comments



Posted by Martin May 20, 2013
3 Comments



 




My inspiration in the last week #22

My inspiration in the last week #22

This week I would like to present the following interesting web sites and links.

I often browse the internet to find ideas about investing, trading stocks, options, investing opportunities and strategies. I like to read about investors and what their investing/trading approach to create income you can live on is.

 

 
 




We all want to hear your opinion on the article above:
3 Comments



Posted by Martin May 20, 2013
No Comments



 




Trade adjustment – Demand Media (DMD) – new covered call (11.24% gain)

Trade adjustment - Demand Media (DMD) - new covered call (11.24% gain)

Another stock I used for covered call writing in my portfolio was Demand Media (DMD). You can see the previous trades here.

As you can see I opened the first covered call in December last year. The trade didn’t go as well as I would expect (the stock wasn’t called away), so I bought back almost worthless covered call and sold a new one. Since then the trade progressed in my favor and brought 11.24% gain as of the last Friday (31.60% annualized return).

Since the last covered call expired worthless this morning I could sell another covered call against this stock, generate more income, and improve overall trade.

Trade Detail

This morning I sold another covered call:

05/20/2013 09:30:02 Sold 1 DMD Nov 16 2013 10.0 Call @ 1.2

 

Own 100 shares DMD: $9.50
Strike: $10.00
Sold 1 Covered Call: $1.20
Total Purchase: $120.00
Commissions: $8.78
Total purchase: $751.31
Expected Option Assignment: $1000.00
Option Assignment Fee: $19.00
Expected Proceeds: $981.00
Expected Net Gain: $229.69
Expected ROI: 30.57%

This trade added to my overall income generated in May 2013 to be $220 so far. This helped me to meet and maintain my goal to generate monthly at least $100 thru options trading. If this trend continues I should be able to exceed my goal.

How are you generating income from your investments?




We all want to hear your opinion on the article above:
No Comments



Posted by Martin May 20, 2013
No Comments



 




Trade Adjustment – 8×8 Inc. (EGHT) new covered call

Trade Adjustment - 8x8 Inc. (EGHT) new covered call

Last Friday (05/17/2013) was the last trading day before options expiration day. I had two options in play for this month. one of them was a covered call for EGHT. This stock broke above the strike price for several times before expiration, but at the end ended below it, so my covered call expired worthless.

Originally I wanted the call being assigned and have the stock called away to free cash I have in this stock, but I am OK with this outcome as well. Not only I have realised 100% profit on my original trade, but today morning I could sell another covered call improving the profit of the entire trade.

By expiring this call I could keep $45 premium (6.3% gain, 29.5% annualized return).

You can review my original trade in the “New Trade – 8×8 Inc. (EGHT) covered call” post.

As you may see in my original post, if the stock got called away, this trade would ended up with 13.72% gain.

It didn’t happen and I could sell another covered call today.

Trade Detail

The trade got executed this morning at opening and I collected $100 premium for this stock improving my trade:

05/20/2013 09:30:00 Sold 1 EGHT Nov 16 2013 7.5 Call @ 1

 

Own 100 shares EGHT: $6.79
Strike: $7.50
Sold 1 Covered Call: $1.00
Total Purchase: $100.00
Commissions: $8.78
Total purchase: $551.56
Expected Option Assignment: $750.00
Option Assignment Fee: $19.00
Expected Proceeds: $731.00
Expected Net Gain: $179.44
Expected ROI: 32.53%

I am excited how this trade perform so far. Let’s see where we get this trade in Novemeber.




We all want to hear your opinion on the article above:
No Comments



Posted by Martin May 16, 2013
6 Comments



 




Commission free wealth building – this time with REIT ETF

Commission free wealth building - this time with REIT ETF

If you ever wondered how to avoid fees on your retirement account or even taxable account or you only can afford invest small money, the commission free ETFs may be your solution as I wrote in my previous posts “How to invest with small money“, and “New Trade – SPDR EURO STOXX 50 (FEZ) in ROTH IRA – Commission free wealth building”.

Fees, taxes and benefit of commission free ETFs

ID-100144085If you wish to use this strategy in your taxable account you can improve its performance by a large margin. Imagine, that in taxable account you pay taxes on every dividend you receive and on every capital appreciation you materialize (sell the stock). On top of all this you pay commissions! What a great improvement you can get when you can avoid commissions! And another benefit would be if you avoid (or minimize) selling your stocks at all. That is one of the reasons why I invest into dividend paying stocks, because unless the company cuts the dividend, you do not have to sell and you can hold forever.

With that you avoid taxes on capital gains and commissions. All what is left is commissions on dividends.

Why do you need taxable account as part of your retirement portfolio

You may ask a question why having a taxable account a part of the retirement portfolio of accounts? Well, the philosophy of having a taxable account as part of your retirement strategy is having such an account working for you as a bridge.

Department of Labor estimates that reducing annual fees and expenses to 0.5% from 1.5%, a 30-year old with $25,000 in assets could expect an extra $64,000 at retirement.

If you have 401k, ROTH IRA or traditional IRA, you are typically required to begin your retirement withdrawals when you turn 59-1/2. But what if you save enough money so you will be able to retire early? Let’s say you max your 401k and ROTH every year and your combined portfolios will be big enough to start retirement when you turn 40.

At that point you will not be eligible for Social security, 401k or ROTH IRA benefits. How will you go over the almost 20 year long period and where do you plan to get the money?

This is where the taxable account comes in the game.

And since it is a taxable account, you get no tax benefits and you get hit by fees. Let’s minimize these loses by avoiding fees.

Which ETF to select?

dividendThis depends on your selected strategy which ETF you want to go. I am a dividend investor so my preference is to select ETFs which pay dividends and distributions. Last time I selected SPDR EURO STOXX 50 (FEZ) which is exposing my portfolio to international stocks. This time I am going for ETF which is investing into REIT sector. My screener listed SPDR Dow Jones International Real Estate ETF (RWX) as my candidate. REIT stocks were recently beaten down by 1Q bad results, which in my opinion is a seasonal hiccup and overall management should be able to overcome this in the long term. RWX is also an index ETF, so I am not exposed to only one company but to the whole REIT industry.

RWX pays nice annual dividend of $2.66 (3.59% yield) and distribution at 5.79%. It is a commission free ETF, so I will only pay taxes on dividends and distributions if I purchase in my taxable account. I am however going to buy this ETF in my ROTH IRA and it will cost me $0 in fees and taxes.

To buy into this ETF I will use my “contingency order strategy”.




We all want to hear your opinion on the article above:
6 Comments



Posted by Martin May 14, 2013
No Comments



 




Safeway (SWY) hikes its quarterly dividend


SafewaySafeway increased its dividend payout by 14% today and the yield got above 3% threshold. (My threshold to consider the stock as a buy). This makes this stock more attractive to me to be added to my portfolio. The current yield of the stock is 3.1% at the rate of $0.20 per share.

But is this increase sustainable?

The Morningstar analysts are no longer providing a fair value for this stock and they have some concerns over the capital expenditures and the sustainability of the positive in-store growth mainly amid the strong competition from discount giants such as Wal-Mart or Costco.

What do you think, is SWY dividend increase justifiable in the long run?

When a company’s management increases its dividend a dividend growth investor can consider this as a good sign that the management (most likely) believes in the company’s growth. Unless they want to ruin the company or offer a phony one time payout to one of their leaving manager (a golden parachute), it would be a stupid move to increase dividends and bring financial stress upon a company.

But you never know what’s cooking under the hood.

I wanted to check how is the company doing financially and compared its free cash flow and EPS vs. dividends:

SWY

SWY

I couldn’t find bad things with this company. Although there is some risk involved with rising prices of food when customers may turn to Safeway’s low-cost competitors, but the recent move from the management seems optimistic. And there is no stock out there with no risk anyway.

Safeway has a nice 7 years history of increasing the dividend, it’s payout ratio is 26%, and dividend growth rate at 20.5%.

I still consider this stock a buy and I will continue selling puts against this company as long as I get exercised into a position.

Happy trading!

 




We all want to hear your opinion on the article above:
No Comments



Posted by Martin May 13, 2013
No Comments



 




Trade order adjustment – SPDR EURO STOXX 50 (FEZ) in ROTH IRA


SuccessToday’s mixed trading session ended SPDR EURO STOXX 50 (FEZ) price movement within my expectations. As I wrote in my previous post “How to invest with small money” I would invest in this ETF to take advantage of investing small money into a commission free ETF.

Investing into FEZ is basically an experiment to me. Generally I wasn’t much successful investing into ETFs in the past, so I want to give it another shot. I think I know the reasons for my previous failure – fees and small investments.

Today, after trading I adjusted my trigger price. This adjustment is within my “entry into stocks” strategy which I myself call a contingency order strategy.

The strategy is about waiting for the stock to reverse into a correction and then track the price down and basically place your buy order slightly higher than the previous day high price. With this strategy you can ride the stock all the way down and you get the order exercised only when the stock reverses. If you provide the stock with some “wiggling” space as Dave Landry speaks about in his book “The Layman’s Guide to Trading Stocks” you will get executed only when the stock really reverses and resumes the trend. This strategy will almost allow you to fish for the bottom.

On rare occasions you can get executed prematurely. It has happened to me in a very few occasions since I’ve been started practicing this entry into stocks method. Mostly I was profiting on this squeezing more juice from the stocks then if buying outright.

On Friday last week I entered my contingency order (or trigger order) wanting to buy FEZ only if the stock reverses and reaches $39.29 a share. It didn’t happen today and the stock continued down. The new closing price was at $35.94 a share. My strategy then dictates me to lower my trade trigger down to new $36.04 a share.

My new order will look like this:

If the last of FEZ is greater or equal to $36.04
BTO 2 FEZ at limit $36.04

I expect FEZ going lower because of the price action I can see at the chart below.

FEZ

From the chart I can see the stock reached the previous high and bounced off of it. The simplest way to read this chart from technical analysis perspective is that now the stock would go down to its 50 day MA from which it should bounce back up.

Of course this is a book-like theory. Everything can happen. Today’s market is crazy, sometimes defying the principles of technical and fundamental analysis (I think, it is because FED is messing up with the market, but that’s another story).

If I am correct, I should be able to pick up my 2 shares at around $34.5 a share.

 




We all want to hear your opinion on the article above:
No Comments



Page 143 of 206« First...120130140«141142143144145»150160170...Last »


This site has been fine-tuned by 14 WordPress Tweaks