Weekly Newsletter   Challenge account


Posted by Martin November 21, 2021
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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!




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Posted by Martin November 13, 2021
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2021 Week 45 investing and trading report


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:

 
Annual Dividend Payout week 45
 

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.

 
Future Divi on YOC week 45
 

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).

 
Stock holdings week 45
 

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:
 

Weekly dividends income calendar
 
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:
 

SPX 2021 1113

 
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

 

TW Account Net-Liq week 45

 

Account Stocks holding

 
TW Account holdings week 45
 

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

 
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 9.58% 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

 
TW Options Income week 45
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 45
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 45
 

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.
 

TW Received vs Future Dividends week 45

 

Our account cumulative return

 

The chart below indicates our cumulative adjusted return.
 

TW cumulative return wk 45
 

TW win ratio wk 44
 

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!




We all want to hear your opinion on the article above:
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Posted by Martin November 09, 2021
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Tesla (TSLA) dropped 12%, what’s next?


Today, Tesla (TSLA) dropped 12% in a sharp and swift selloff that was a continuation from Monday selling. On Monday, TSLA tried to recover, but more bad news came today, and the carnage was brutal. But it was not something I was not expecting.
 

Last weekend I wrote to my newsletter subscribers:

Many bears are being beaten heavily and even a legendary short Michael Burry was forced to reduce his short position in Tesla. Are we done with the squeeze? We do not know yet. What worries me though is the trend chart itself. The trend up is a parabolic move, and these usually crash as quickly as they go up. But is this the case with Tesla? So I am expecting a pullback and decided to place a tight stop on the trade at $1,120 level and if I get sold out, I plan on returning back when selling is done.

On Monday, Tesla got pushed lower by 6% on Elon Musk’s tweet, today, the stock went down 12% on bad news from lesser sales in China than expected:
 

Tesla (TSLA) dropped 12%

 
We bought the stock at $620 a share and we placed our stop loss at $1,120 a share and when the stop got hit today, we closed this position with a very nice profit. Now we need to wait for selling to end before we re-enter into TSLA again.

It appears, that the stock is searching for support at $1,020 but it is early to say. The support at this level is weak and the most likely scenario is that we will go down and retest either the $900 or $775 level:
 

Tesla (TSLA) dropped 12%

 

 




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Posted by Martin November 06, 2021
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2021 Week 44 investing and trading report


The first week of November is behind us. The year is nearing the end and in this investing and trading report, I will attempt to show you not only the results of our weekly trading and investing but also why I think this market is going to a very bullish end. The first week of November started well. We made a decent premium income bringing in $756.00 cash, we made $10.35 in dividends, and our net-liq jumped up by $1,654.80 reaching a total of $95,700.64. I am satisfied with the results so far and I believe, we will see better returns in the remaining weeks of the year.

 

Here is our investing and trading report:

 

Account Value: $95,700.64 +$1,654.80 +1.76%
Options trading results
Options Premiums Received: $756.00    
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: $756.00 +0.79%  
Options Premiums YTD: $49,538.00 +51.76%  
Dividend income results
Dividends Received: $10.35    
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: $10.35    
Dividends YTD: $2,131.78    
Portfolio metrics
Portfolio Yield: 4.16%    
Portfolio Dividend Growth: 8.13%    
Ann. Div Income & YOC in 10 yrs: $17,125.27 15.67%  
Ann. Div Income & YOC in 20 yrs: $129,430.83 118.45%  
Ann. Div Income & YOC in 25 yrs: $546,062.53 499.72%  
Ann. Div Income & YOC in 30 yrs: $3,550,188.16 3,248.92%  
Portfolio Alpha: 45.07%    
Portfolio Weighted Beta: 0.63    
CAGR: 625.36%    
AROC: 40.97%    
TROC: 14.04%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 198.97% Accomplished
2021 Portfolio Value Goal: $42,344.06 226.01% Accomplished
6-year Portfolio Value Goal: $175,000.00 54.69%  
10-year Portfolio Value Goal: $1,000,000.00 9.57%  

 

Dividend Investing and Trading Report

 
Last week the stock market moved higher on strong earnings. I keep saying, the market follows earnings. Everything else is just noise and bogus. If you believe that the market is manipulated or rigged, then take the earnings of the S&P 500 per share chart and overlay it over the S&P 500 chart. You will clearly see how highly correlate the two are. So all the rigging and manipulation claims are usually by those people who are losing money because they do not understand the market. And because they do not understand the market, they blame their losses on everything.

The market strong move (and I can tell you it will continue into the end of the year) had a positive impact on our account.

We received $10.35 in dividends last week. We kept adding dividend growth stocks to our portfolio as per our plan and accumulation rules.

Here you can see our dividend income per stock holding:

 
Annual Dividend Payout week 44
 

Options Investing and Trading Report

 
We generated $756.00 options income last week. Let’s see how our options income will look like by the end of the month. So far, if we continue receiving the same amount of cash, we are set to end November at $3,024 dollars. I hope we will do better than that. But it is too early to say.

Last week we mostly closed or rolled trades that were already worthless (so why sit on them). We added one trade against SPY (bull put spread) and SNOW (also a bull put spread). We closed a strangle against Realty Income (O) due to their merger and spinoff that is happening in November. It should be completed by November 12th. This caused the options to be a non-standard option after November 12th and set to closing only. This would make rolling trades and other adjustments difficult, so I decided to close the trade and reopen after the spinoff.

 

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 $10.35 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. Yet, our portfolio currently yields 4.16% at $95,700.64 market value. I think this is not a bad result.

 
Our projected annual dividend income in 10 years is $17,125.27 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 $4,063.72 annual dividend income. We are 23.73% of our 10 year goal of $17,125.27 dividend income.

 
Future Divi on YOC week 44
 

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 $121,107.63 to $126,668.98 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).

 
Stock holdings week 44
 

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 0.79% monthly ROI in November 2021, totaling a 51.76% ROI YTD. We again exceeded our 45% annual revenue selling options against dividend stocks target!

Our account grew by 365.19% beating our projections and the market.
 

Our options trading averaged $4,503.45 per month this year. If this trend continues, we are on track to make $54,041.45 trading options in 2021. As of today, we have made $49,538.00 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 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.

 

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 added shares of TD, MSFT, and AAPL to our dividend stock holdings. We are still accumulating SSO and SPXL as a primary goal (a growth sub-goal), but we are also adding dividend stocks to accumulate to 100 shares as that is our overall portfolio primary goal.

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

 

A week ago, it started being obvious that the market is going to rally for the rest of the year. Earnings are beating estimates and outlooks are better than expected. That pushes the market higher. It may be overvalued but its growth is still well in line with the earnings growth. Next year, it can be however a different story as the estimates indicate a lot smaller growth so the market still may go higher but not as strong and fast as today.

Last week, FED also announced its tapering of bond purchases and that would be normally taken as a negative move from FED and if done in the past, the market would throw a taper tantrum. It didn’t happen today.

If you are a subscriber to my newsletter, you will get another issue this weekend and I will describe this more in detail.

Here is what happened last week:
 

SPX 2021 1106

 
What you can see is that the markets rallied toward the 4710 level. That was the level what options market priced in as a 1 SD (1 standard deviation) at the beginning of the November expiration cycle. All big players, banks, and hedge funds usually sell options (only retail and Robinhood investors buy them), so at the beginning of the cycle, the big players sell their puts and calls and they usually do so at these levels as marked on our chart above. I do the same. When my October options expire, I sell November options at the same levels.

But then, the hedge funds start hedging and protecting their positions. When the market starts moving toward one or the other level, they start either buying shares or options to hedge the short position. That fuels the move. And that is what you can clearly see on last week’s chart. This was clear hedging and FOMO buying.

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 44

 

Account Stocks holding

 
TW Account holdings week 44
 

Last week, S&P 500 grew 62.39% since we opened our portfolio while our portfolio grew 35.55%. On YTD basis, the S&P 500 grew 32.55% and our portfolio 28.57%.

Our portfolio grew at the same pace as 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 365.19% 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 -4.68%), but we generated enough income (we can call it also a return of our invested capital) and that position is 126.84% 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 9.57% 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 54.69% 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 44
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 44
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 44
 

We have accomplished our dividend income goal. We planned to make $1,071 of dividend income this year and we finished receiving $2,131.78. However, we accumulated enough shares to start making $4,063.72 a year.
 

TW Received vs Future Dividends week 44

 

Our account cumulative return

 

The chart below indicates our cumulative adjusted return.
 

TW cumulative return wk 44
 

TW win ratio wk 44
 

As of today, our account cumulative return is 58.93% (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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Posted by Martin November 03, 2021
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What was bad for the market yesterday is good today


The FED announced today that they would begin their tapering this month. If this announcement was made a few months ago, the stock market would sell off and throw away a baby with bathtub water. The media would be all red screaming “end of the world.”

Yet today, after the FED’s announcement, the stock market jumped up hard. After a week of doing nothing. I know that there is the saying of buying the rumors selling the news, in this case possibly “doing nothing on rumors and buying the news…” or whatever. That probably didn’t apply. Well, this is what happened today:

 

FED announcement and market reaction

 

The entire day – nothing. At 2 pm, the market rallied like it was also an end of the world.

I consider myself a seasoned investor and trader but this different perception of the same event still baffles me. I wonder why investors considered this a good thing when everybody considers the easing of easy money a bad thing and predicts the market to crash when the stimulus is taken away… Although history has proven that raising rates is not bad for the market. This time, it is only bad for the high-flying stocks with astronomical P/E and no “E” and revenue. But even ARKK that invests solely in this type of stock rallied.
 




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Posted by Martin October 30, 2021
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October 2021 $100 Challenge account review


Trading a small account requires a lot of patience and diligence. It is not get-rich-quick trading. When trading a small account, all odds will be against you – the fees, restrictions, regulations, everything will be set to make your journey hard and difficult. But the payoff will be sweet.

When I started trading options I wanted to be rich fast. I saw options as a route for riches bypassing slow stocks. At first, it worked and I believed I found the holy grail. But I only fooled myself when I was actually losing money. In 2019 I finally put a stop to my madness. I learned how to trade options the correct way, but never did it that way. In 2019, it was time to go back to the roots of proper options trading.

I restarted my account with nothing in it and slowly built it up again. The entire year 2019 was still going down. In 2020 my net liq dropped even more as many bad trades were going away. But I was not going astray and traded the way I knew would work no matter what. Today, my account reached $94,000 in just three years.

This program is to show you the progress step by step from a small account to a large one:

 

Accumulation phase

 
The account is still underperforming our goal but it is on the path to success. We are now trading small trades (strangles) and we will continue accumulating shares for our next options trade. The strangle trades are consuming collateral buying power but as they near towards expiration we will see a jump in BP and net-liq.

We are trading strangles because they are easier to manage compared to Iron Condors, but they are also a bit more expensive as far as capital requirements go. That is why choosing good stocks to trade is crucial. Choose safe, stable stocks, providing enough premium and stability. And that is what we are doing.
 

October 2021 Challenge account review

 

MONTH GOAL $$ ACTUAL $$
June 2021: $203.00 $202.67
July 2021: $306.00 $334.75
August 2021: $409.00 $397.71
September 2021: $512.00 $476.91
October 2021: $615.00 $632.37
November 2021: $718.00  
December 2021: $821.00  
January 2022: $924.00  
February 2022: $1,027.00  
March 2022: $1,130.00  
April 2022: $1,233.00  
May 2022: $1,336.00  

 

$100 Challenge account review

 
From the chart above, the red dot (line) indicates the current account value, compared to the blue line (plan). Our account is trailing our goal. When trading naked options, expect volatility in your net-liq. That can be seen by some as a disadvantage. When trading spreads, your net-liq will be stabilized by neutralizing delta. With naked options, you would have to choose other instruments to do so, for example owning stocks to neutralize your call side. We do not have this yet as our account is small, but we are building our position.
 

October 2021 Overall Challenge account review

 
The chart below indicates our account value compared to the overall goal and plan to grow $100 investment into a $75,000 portfolio. As of today, we are at the beginning of our journey.

YEAR CONTRIBUTIONS $$ GOAL $$ ACTUAL $$
Year 0: $100.00 $100.00 $100.00
Year 1: $1,300.00 $1,336.00 $632.37
Year 2: $2,500.00 $3,016.96  
Year 3: $3,700.00 $5,303.07  
Year 4: $4,900.00 $8,412.17  
Year 5: $6,100.00 $12,640.55  
Year 6: $7,300.00 $18,391.15  
Year 7: $8,500.00 $26,211.96  
Year 8: $9,700.00 $36,848.27  
Year 9: $10,900.00 $51,313.64  
Year 10: $12,100.00 $70,986.56  

 

$100 Challenge account review goal

 

September 2021 Challenge account Income

 

Total Invested in Stocks $301.82
Total Unrealized Profit $6.60
Total Realized Profit $2.21
Strangles Income $187.00
Dividends Income $9.02

 

August 2021 Cumulative return Challenge account review

 

As of today, our challenge account provided a -14.61% monthly cumulative return.
 

$100 Challenge account review goal

 
$100 Challenge account review goal

 

If you want to see what investments we take, what trades and strategies we will use to grow this small account join our program today and grow your money too. We engage in safe investments, select strategies to maximize winning trades, and grow our portfolio. And you can do it too, today! We do not provide quick rich promises, gambling, or reckless strategies. We want our portfolio to grow steadily and preserve our capital while maximizing returns.
 

As a member, you will have access to the following features:
 

 

 




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Posted by Martin October 29, 2021
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2021 Week 43 investing and trading report


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:

 
Annual Dividend Payout week 43
 

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.

 
Future Divi on YOC week 43
 

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).

 
Stock holdings week 43
 

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:
 

Weekly dividends income calendar
 
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:
 

SPX 2021 1022

 
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:
 

SPX 2021 1029

 
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

 

TW Account Net-Liq week 43

 

Account Stocks holding

 
TW Account holdings week 43
 

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

 
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 9.40% 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

 
TW Options Income week 43
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 43
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 43
 

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.
 

TW Received vs Future Dividends week 43

 

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.
 

TW cumulative return wk 43
 

TW win ratio wk 42
 

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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Posted by Martin October 24, 2021
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2021 Week 42 investing and trading report


October 2021 is becoming the best month for trading options. As you will see in this investing and trading report we made over $8,000 this month so far and our net liquidating value jumped above $90k.

And, in the meantime, please, enjoy our weekly investing and trading report.

 

Here is our investing and trading report:

 

Account Value: $91,450.68 +$2,189.14 +2.45%
Options trading results
Options Premiums Received: $3,019.00    
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: $8,244.00 +9.01%  
Options Premiums YTD: $48,305.00 +52.82%  
Dividend income results
Dividends Received: $15.27    
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: $170.41    
Dividends YTD: $2,019.26    
Portfolio metrics
Portfolio Yield: 4.18%    
Portfolio Dividend Growth: 8.13%    
Ann. Div Income & YOC in 10 yrs: $16,886.62 15.76%  
Ann. Div Income & YOC in 20 yrs: $128,176.48 119.63%  
Ann. Div Income & YOC in 25 yrs: $542,659.14 506.47%  
Ann. Div Income & YOC in 30 yrs: $3,544,761.59 3,308.37%  
Portfolio Alpha: 45.74%    
Portfolio Weighted Beta: 0.67    
CAGR: 632.53%    
AROC: 54.87%    
TROC: 13.76%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 188.47% Accomplished
2021 Portfolio Value Goal: $42,344.06 215.97% Accomplished
6-year Portfolio Value Goal: $175,000.00 52.26%  
10-year Portfolio Value Goal: $1,000,000.00 9.15%  

 

Dividend Investing and Trading Report

 
Last week, the markets continued a strong recovery although at the end of the week the S&P 500 growth slowed down. We grew our net-liq by 2.45% last week. Since our rule of keeping min. $3,000 in BP was met, we purchased dividend growth stocks and SPXL and SSO shares to get our portfolio ready for rapid growth. We also added other dividend stocks and we rolled our strangles up (some to generate more income, others were rolled up as the market was recovering). We were also re-opening trades that expired last week.

Our options income reached another impressive $3,019.00 dollars received in premiums. That makes $8,244.00 in October so far. This is our best month in premium income.

Our dividend income was steady, we have received $15.27 in dividends last week, making October at $170.41 dividend income.

We are also growing our dividend growth portfolio and here you can see our dividend income per stock holding and how they contribute to the overall dividend income:

 
Annual Dividend Payout week 42
 

Options Investing and Trading Report

 
As I mentioned above, we generated $3,019.00 options income so far this month and we expect to generate more next week.

Last week we rolled our positions and it was extremely profitable. I keep saying that these selloffs are great for investors. All they need to do is stop panicking, assess the situation (which means learning how to evaluate the stock market as a whole), and instead of panic selling engage in buying. We rolled our options trades and made over $3k in premiums, but this selloff also allowed us to buy more stock. We also opened new trades replacing the trades that expired last week.

 

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 $15.27 in dividends last week. It is a bit disappointing dividend income as in the past few weeks and months it started to look like our dividend income was picking up, but the last month and October sucks. I may need to review my dividend tracking as it shows that I should be getting more in dividends than what I am receiving. So, I guess, there is an error in my tracking. One item could be that I track ex-dividend date but I should probably track a payout date as I noticed that some companies can pay the dividends a few months after the ex-date.

 
Our projected annual dividend income in 10 years is $16,886.62 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 $4,048.88 annual dividend income. We are 23.98% of our 10 year goal.

 
Future Divi on YOC week 42
 

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 $115,926.73 to $118,822.58 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).

 
Stock holdings week 42
 

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 9.01% monthly ROI in October 2021, totaling a 52.82% ROI YTD. We again exceeded our 45% annual revenue selling options against dividend stocks target!

Our account grew by 344.53% beating our projections and the market.
 

Our options trading averaged $4,830.50 per month this year. If this trend continues, we are on track to make $57,966.00 trading options in 2021. As of today, we have made $48,305.00 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 and SPXL 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.

We also added a few shares of BITO but the ETF didn’t perform as expected so we got out of the position with a small loss. I also did some reading and learned more about the fund. It is trading futures of Bitcoin and replacing expiring futures with the new front-month futures. With this strategy, it will work in a similar manner as the USO fund, and that is a receipt for a disaster for investors as you may suffer value destruction over time because of a contango effect. This vehicle is good to capture short-term moves but not a long-term investment.

 

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 (in November we will be raising the limit to $4,000). 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.

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 added shares of OMF when the stock dropped 8% unexpectedly. We still plan on adding The Toronto-Dominion Bank (TD) or Walgreens Boots Alliance, Inc. (WBA) dividend stocks once our goal of accumulating SPXL and SSO is accomplished.

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

 

As I indicated above, the stock market continued its rally. It recovered the September pullback so we are now back on track for a new all-time high:
 

 
With that said, what could be the next move in the market? Again, we need to remember at what stage or phase this market is. The market is driven by earnings. Nothing else. Everything else is a secondary driver. The primary driver is earnings. It is astounding to see people investing in the market and not knowing what drives it. It is like driving a car but having a thick cover on the front windshield. People invest in the market completely blind and influenced by rumors false expectations and wishful thinking. They think they know but when I ask them, they turn out to be clueless.

Just yesterday I had a discussion with one investor on social media about the market and he proclaimed that it was wishful thinking to expect that the market would make new double-digit gains over the foreseeable future. He revealed that he had no idea what drives the market and he is investing based on HIS expectations and perceptions, not the market. If you are a subscriber to my newsletter, you would know why this market is, in fact, in a very healthy stage and will most likely post triple-digit gains over the foreseeable future.

My expectation for the next week is however some small pullback or consolidation of the recent gains but then we are heading to a Santa Claus rally.
 

SPX 2021 1022

 
We may see some bouncing around but it is my opinion that this market is heading to a new all-time high.

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 42

 

Account Stocks holding

 
TW Account holdings week 42
 

Last week, S&P 500 grew 57.11% since we opened our portfolio while our portfolio grew 29.77%. On YTD basis, the S&P 500 grew 27.27% and our portfolio 22.79%.

The numbers above indicate that our portfolio grows faster than the market and we are pairing this year’s market performance. I expect this trend to continue in the next years.

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 344.53%!
 

Stock holdings Growth YTD

 
TW Account 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 9.15% 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 52.26% 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 42
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 42
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 42
 

We have accomplished our dividend income goal. We planned to make $1,071 of dividend income this year and we finished receiving $2,019.26. However, we accumulated enough shares to start making $4,048.88 a year.
 

TW Received vs Future Dividends week 42

 

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.
 

TW cumulative return wk 42
 

TW win ratio wk 42
 

As of today, our account cumulative return is 51.87% (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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Posted by Martin October 16, 2021
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2021 Week 41 investing and trading report


The second week of October 2021 ended great as we will show you in this investing and trading report. Our income from selling options last week reached $3,829.00 in the week alone and delivering $5,225.00 in October. That makes it a third-best month this year trading options. But October is not over yet. We may make more cash before the month-end.

And, in the meantime, please, enjoy our weekly investing and trading report.

 

Here is our investing and trading report:

 

Account Value: $89,261.54 $4,236.27 4.98%
Options trading results
Options Premiums Received: $3,829.00    
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: $5,225.00 +5.85%  
Options Premiums YTD: $45,286.00 +50.73%  
Dividend income results
Dividends Received: $90.00    
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: $155.14    
Dividends YTD: $2,003.99    
Portfolio metrics
Portfolio Yield: 4.45%    
Portfolio Dividend Growth: 8.13%    
Ann. Div Income & YOC in 10 yrs: $18,414.72 17.38%  
Ann. Div Income & YOC in 20 yrs: $150,819.58 142.35%  
Ann. Div Income & YOC in 25 yrs: $679,084.61 640.94%  
Ann. Div Income & YOC in 30 yrs: $4,820,916.87 4,550.14%  
Portfolio Alpha: 43.65%    
Portfolio Weighted Beta: 0.67    
CAGR: 638.15%    
AROC: 52.36%    
TROC: 13.37%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 187.04% Accomplished
2021 Portfolio Value Goal: $42,344.06 210.80% Accomplished
6-year Portfolio Value Goal: $175,000.00 51.01%  
10-year Portfolio Value Goal: $1,000,000.00 8.93%  

 

Dividend Investing and Trading Report

 
Last week, the markets staged a strong recovery and we grew our net-liq by 4.98%. We had 4 strangles and spreads expiring last Friday and next week we will be reopening those trades. We also purchased dividend growth stocks and SPXL and SSO shares to get our portfolio ready for rapid growth.

Our options income reached impressive $3,829.00 dollars received in premiums. That makes $5,225.00 in October so far. Our third best month in premium income.

Our dividend income was steady, we have received $90.00 in dividends last week, making October at $155.14 dividend income.

We are also growing our dividend growth portfolio and here you can see our dividend income per stock holding and how they contribute to the overall dividend income:

 
Annual Dividend Payout week 41
 

Options Investing and Trading Report

 
As I mentioned above, we generated $3,829.00 options income so far this month and we expect to generate more. I hope, the market would stay pressured for a while so I can keep buying cheaper stocks and making more money on options.

Last week we only rolled our positions and it was extremely profitable. I keep saying that these selloffs are great for investors. All they need to do is stop panicking, assess the situation (which means learning how to evaluate the stock market as a whole), and instead of panic selling engage in buying. We rolled our options trades and made over $3k in premiums, but this selloff also allowed us to buy more stock.

And when the market shot up on Thursday and Friday, we rolled some trades again and generated even more money.
 

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 $90.00 in dividends last week. It is still slow that I would like to see but we are still in an accumulation phase so I do not care much about the total amount of dividends I am receiving today. I am building a portfolio with the expectation of getting large dividends in the future. And in the meantime, I learned how to trade options to generate consistent income today.

 
Our projected annual dividend income in 10 years is $16,336.97 but that is if we do absolutely nothing and let our positions grow on their own.

We are also set to receive a $4,053.22 annual dividend income. We are 23.27% of our 10 year goal.

 
Future Divi on YOC week 41
 

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 $111,297.56 to $115,926.73 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).

 
Stock holdings week 41
 

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 5.85% monthly ROI in October 2021, totaling a 50.73% ROI YTD. We again exceeded our 45% annual revenue selling options against dividend stocks target!

Our account grew by 333.89% beating our projections and the market.
 

Our options trading averaged $4,528.60 per month this year. If this trend continues, we are on track to make $54,343.20 trading options in 2021. As of today, we have made $45,286.00 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 and SPXL 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 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.

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 added shares of VICI and accumulated 100 shares. That means we accomplished our accumulation goal in this stock and we will now move to accumulate a different stock (possibly The Toronto-Dominion Bank (TD) or Walgreens Boots Alliance, Inc. (WBA)).

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

 

In our previous post on this blog, we speculated whether selling was over and it was time to buy the dip again. We also indicated that the market started creating a new higher low (HL) and although it was still questionable, Friday’s follow-through confirmed the trend. This is what we posted before:
 

 
Abd this is what happened on Thursday and Friday:
 

SPX 2021 1016

 
We may see some bouncing around but it is my opinion that this market is heading to a new all-time high.

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 41

 

Account Stocks holding

 
TW Account holdings week 41
 

Last week, S&P 500 grew 54.57% since we opened our portfolio while our portfolio grew 26.84%. On YTD basis, the S&P 500 grew 24.73% and our portfolio 19.86%.

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 333.89%!
 

Stock holdings Growth YTD

 
TW Account 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 8.93% 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 51.01% 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 41
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 41
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 41
 

We have accomplished our dividend income goal. We planned to make $1,071 of dividend income this year and we finished receiving $2,003.99. However, we accumulated enough shares to start making $4,053.22 a year.
 

TW Received vs Future Dividends week 41

 

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.
 

TW cumulative return wk 41
 

TW win ratio wk 41
 

As of today, our account cumulative return is 48.24% (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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Posted by Martin October 14, 2021
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Time to buy the dip again?


Is the market telling us to buy the dip again? If you are a subscriber to our newsletter, last week I posted my expectation about the market sliding further down due to technical damage to the chart. My expectation was to reach a 200-day moving average at a 4,150 level (or around it). My exact target was $4,230. But overall, I was still bullish about this market. I wrote:

“We still need to put this selling into perspective. This is just a pullback in the context of a secular bull market and that is completely normal behavior. To determine whether you should respect this selling or ignore it, you need to look at earnings estimates. And as you could see […], earnings estimate for the rest of the year and next year are still positive… We are still in a secular bull market and people tend to mix secular and cyclical markets together. They confuse a cyclical bear market with a secular bear market and predict catastrophic outcomes. But it takes time for the secular market to show its end and when it happens, we will be able to recognize it and adjust our portfolio accordingly.”

And here is the chart, I posted in our newsletter:

 
S&P 500 rebound
 

Today, we have received some economic reports that changed the narrative, significantly. The jobless claim came in indicating significant improvement in unemployment – 320,000 claims were expected but only 293,000 new claims were reported. On top of that, banks earnings reports topped expectations setting an exciting tone for market participants that the earnings are really still within expectations and beating those expectations (again, something I have been writing in my newsletter for weeks that no one was revising their earnings outlooks yet, only a handful of companies issued warnings due to supply chain issues, but overall, EPS estimates remained same).

This is what the market is displaying today:

 
S&P 500 buy the dip
 

After a series of lower lows (LL) and lower highs (LH), the market broke above the downward sloping trend creating its first higher low (HL). It still can fail but the candle is pretty much convincing that we are experiencing a reversal (market up +1.39%). And if more companies come out with better than expected earnings reports, this market will resume its rally. And that is a very high chance of it to happen as I wrote in my newsletter that:

“Heading into the end of the third quarter, 103 S&P 500 companies have issued [positive] EPS guidance for the quarter. This number is above the 5-year average of 100.”

If on Friday, we see a confirmation, it will be a good opportunity to return to the bullish case again and buy the dip.
 
 




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