July 2021 is behind us and we can close the books for week #30. We can also report our first week of August 2021 (week #31). I was on vacation last week of July and I was not able to report July trading, so I will do so here.

Last week of July we received $537.00 of options premiums ending the month of July at $3,865.00 total premiums received. Our dividend income brought in $56.95 finishing the month at $228.62.

Below is our August week #31 report.
 

Here is our investing and trading report:

Dividend Investing and Trading Report

 
Last week, we have received a $7.28 dividends income. According to our holdings currently on our balance sheet, all stocks should generate $4,082.46 annual dividend income. We are not receiving these dividends yet because many of the stocks were purchased recently and we missed their most recent dividends. But next year, we should be receiving the full amount.

The chart below indicates our current annual dividend payout from our dividend stock holdings.

Last week, our dividend income reached 83.95% of our dividend income goal.

Options Investing and Trading Report

 
Last week we rolled options that got in trouble. We were not opening any new trades. Just managing the old ones. We rolled OXY, PBCT, XOM, TSLA, AES, and BA. The purpose of rolling those trades was to move the stock price to the center of the strangle. That releases a significant amount of buying power. These adjustments also delivered nice credits.
 

You can watch all our trades in this spreadsheet and you can also subscribe to our newsletter for our trade alerts.
 

Expected Future Dividend Income

 
As the table at the beginning of this report indicates, our aggressive dividend growth stocks accumulation is starting to show significant progress in our future dividends income. Our portfolio dividend yield and dividend growth will be bringing us almost $155,096.04 in 20 years and $5,653,530.69 in 30 years. I wish, I had that $5.6 million income now. But that is the fate of dividend growth investing. It is not a quick rich scheme and building an account takes time.

We will keep aggressively accumulating dividend growth stocks to generate liveable income sooner than in 20 years. And the portfolio is starting to show this to be happening. In just 10 years, we will start receiving $17,666.52 in today’s dollars. It is not bad considering that in March 2021 it was only $3,202.52 in projected future dividends.

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 $97,113.20 to $100,173.83.

Our holdings reached $100k market value. It is a good milestone to celebrate.

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 0.68% monthly ROI in July 2021, totaling a 41.68% ROI YTD. We are getting close to our 45% annual revenue selling options against dividend stocks!

Our account grew by 274.41% this year despite very slow growth in June and July.
 

Our options trading averaged $4,012.75 per month this year. If this trend continues, we are on track to make $48,153.00 trading options in 2021. As of today, we have made $32,102.00 trading options. We are halfway to the projected annual income.
 

Old SPX trades repair

This week, we didn’t adjust any SPX trade.

Accumulating Growth Stocks

Last week, we added 1 share of SNOW to our holdings. Our goal is to accumulate 100 shares and start selling covered calls. SNOW is an expensive stock to trade naked strangles, so we will proceed with covered calls once we accumulate enough shares. As of today, we hold 21 shares.

Accumulating Dividend Growth Stocks

Last week, we added 10 shares of VICI, and 15 shares of ICSH. In the upcoming weeks, we will be accumulating aggressively the higher yield income stocks to boost our dividend income furthermore.

Our goal is to reach 100 shares of high-quality dividend stocks and build a weekly dividend income as per this calendar, but we have made no changes to this goal last week:
 

 
You can see the entire spreadsheet here.

Market Outlook

I am still bullish and think this market is going higher in the upcoming weeks. The reason? Earnings! No matter what you believe about the current market valuation, this market is heading higher because of earnings. What location is for real estate valuations, earnings is the most important metric for the stock market.

And the second quarter of earnings was spectacular. On a per-share basis, earnings grew from an expected 205 per share to 255 per share. That translates to a $5,533 SPX value. At today’s prices, we have a lot of room to go higher.

Investing and trading report in charts

Account Net-Liq

Account Stocks holding

Our stock holdings still do not beat the market. However, I expect it to change over time. S&P 500 grew 53.37% since we opened our portfolio while our portfolio grew 19.18% only. On YTD basis, the S&P 500 grew 23.52% and our portfolio 12.20%.

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 274.41%!
 

Stock 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 goal is to grow this account to $1,000,000.00 value in ten years. We are in year two.

Investing and Trading Report – Options Monthly Income

Investing and Trading Report – Options Annual Income

Our dividend goal and future dividends

We are on track to accomplish our dividend income goal, currently, we are at 83.95% of the goal to reach $1,071 of dividend income this year. Currently, we accumulated enough shares to receive $4,082.46 in annual dividends if we have held through the entire dividend cycle.
 

The chart above is the corrected chart comparing the projected MONTHLY dividend income vs received dividend income. And again, the projected dividend income is based on the stock holdings up to date. That is the income we would have received if we have held over the entire dividend cycle.

Our account cumulative return

The chart below indicates our cumulative adjusted return. It shows how the last week’s selloff shook down our returns but we are recovering along with the market.
 

As of today, our account cumulative return is 34.23% (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 exceeded our expectations. I hope, the rest of the month will be even better.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares. We will also replenish our cash reserves to bring them back to 25% of our current net-liq value.

We will report our next week’s results next Saturday. Until then, good luck and good trading!

The third week of July is behind us. I am on a vacation and it is really difficult to do anything when you have to attend family and invest as well, so this investing and trading report took a bit more time to complete than usual. My next week will be probably late too.

Last week’s investing and trading were good. We made nice options premiums income receiving $1,245.00 and OK dividend income making $14.27. Out net-liq was stangating, though. But let’s quickly review the last week’s report.
 

Here is our investing and trading report:

Dividend Investing and Trading Report

 
Last week, we have received a $14.27 dividends income. According to our holdings currently on our balance sheet, all stocks should generate $4,110.62 annual dividend income. We are not receiving these dividends yet because many of the stocks were purchased recently and we missed their most recent dividends. But next year, we should be receiving the full amount.

The chart below indicates our current annual dividend payout from our dividend stock holdings.

Last week, our dividend income reached 77.95% of our dividend income goal.

Options Investing and Trading Report

 
Last week we reopened all trades that expired the previous week. We opened new strangles against APAM, AES, KBE, O, PPL, and OXY. We rolled a few existing trades, and we opened a new long LEAPS trade against SPLG. We also started selling covered calls against that LEAPS option.

The new trades and adjustments delivered $1,245.00 options premiums last week.
 

You can watch all our trades in this spreadsheet and you can also subscribe to our newsletter for our trade alerts.
 

Expected Future Dividend Income

 
As the table at the beginning of this report indicates, our aggressive dividend growth stocks accumulation is starting to show significant progress in our future dividends income. Our portfolio dividend yield and dividend growth will be bringing us almost $169,834.32 in 20 years and $7,612,835.00 in 30 years. I wish, I had that $7 million income now. But that is the fate of dividend growth investing. It is not a quick rich scheme and building an account takes time.

We will keep aggressively accumulating dividend growth stocks to generate liveable income sooner than in 20 years. And the portfolio is starting to show this to be happening. In just 10 years, we will start receiving $17,811.10 in today’s dollars. It is not bad considering that in March 2021 it was only $3,202.52 in projected future dividends.

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 $94,437.23 to $97,113.20.

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 4.51% monthly ROI in July 2021, totaling a 42.09% ROI YTD. We are getting close to our 45% annual revenue selling options against dividend stocks!

Our account grew by 258.44% this year despite very slow growth in June and July.
 

Our options trading averaged $4,434.00 per month this year. If this trend continues, we are on track to make $53,208.00 trading options in 2021. As of today, we have made $31,038.00 trading options. We are halfway to the projected annual income.
 

Old SPX trades repair

This week, we didn’t adjust any SPX trade.

Accumulating Growth Stocks

Last week, we didn’t add any positions.

Accumulating Dividend Growth Stocks

Last week, we added 50 shares of QYLD, and 15 shares of ICSH. In the upcoming weeks, we will be accumulating aggressively the higher yield income stocks to boost our dividend income furthermore.

Our goal is to reach 100 shares of high-quality dividend stocks and build a weekly dividend income as per this calendar, but we have made no changes to this goal last week:
 

 
You can see the entire spreadsheet here.

Investing and trading report in charts

Account Net-Liq

Account Stocks holding

Our stock holdings still do not beat the market. However, I expect it to change over time. S&P 500 grew 52.51% since we opened our portfolio while our portfolio grew 18.05% only. On YTD basis, the S&P 500 grew 22.67% and our portfolio 11.07%.

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 258.44%!
 

Stock 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 goal is to grow this account to $1,000,000.00 value in ten years. We are in year two.

Investing and Trading Report – Options Monthly Income

Investing and Trading Report – Options Annual Income

Our dividend goal and future dividends

We are on track to accomplish our dividend income goal, currently, we are at 77.95% of the goal to reach $1,071 of dividend income this year. Currently, we accumulated enough shares to receive $4,110.62 in annual dividends if we have held through the entire dividend cycle.
 

The chart above is the corrected chart comparing the projected MONTHLY dividend income vs received dividend income. And again, the projected dividend income is based on the stock holdings up to date. That is the income we would have received if we have held over the entire dividend cycle.

Our account cumulative return

The chart below indicates our cumulative adjusted return. It shows how the last week’s selloff shook down our returns but we are recovering along with the market.
 

As of today, our account cumulative return is 28.51% (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 exceeded our expectations. I hope, the rest of the month will be even better.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares. We will also replenish our cash reserves to bring them back to 25% of our current net-liq value.

We will report our next week’s results next Saturday. Until then, good luck and good trading!

Another week of July is over and it is time to provide our weekly investing and trading report for our main business account. We run two accounts – one account is our main business account where we trade options against dividend stocks we either own or plan on owning. Our second account is a challenge account that is designed for beginning investors starting with little money to invest and grow their account from $100 to $75,000. We provide a report of our business account (the main account) every Saturday on weekly basis and we provide our challenge account review every month on Monday evening at the beginning of each month.
 

Closing strangles positions

 
When we open a new strangle trade as I wrote about last week our main goal is to keep that trade running all the way to expiration. If everything goes well and the stock doesn’t move violently to either side, we let it go and let it expire.

Sometimes, the stock runs up or down hard, and either our call or put side gets challenged. That is the time we start watching our position carefully and if any of this situation happens we roll the trade:
&nbs;

The challenged side gets beyond delta 30

In this case, we review how much buying power would be released if we roll the trade. If the roll releases $800, $1,000, $2,000, or more of the buying power, we will roll the trade. But it must be a roll for credit. If a rolling trade would result in a debit trade, we would probably let it go and accept the assignment. But if the trade was naked and we do not have enough cash (or 100 shares) to accept the assignment, we roll farther away in time to make sure the trade will bring in credit, even a small one.
&nbs;

The challenged side gets in the money

A stock drops so fast that we are unable to roll soon enough to keep the price between the strikes. In this case, we roll the trade for sure. We roll lower (or higher) and away in time. If the stock was near the money or at the money (but still in the money), we can wait a bit or we can roll in the next expiration day, and we roll the challenged side out of the money. But again, such rolling must result in a credit. If the next expiration day rolling still requires debit, we go further away in time and we go as far away as it turns from a debit trade to credit trade.

The challenged side gets deep in the money

If the stock gets deep in the money due to a market selloff, we again do the exact same moves as described above but we do not go into the next expiration day. We go to 90 DTE or farther away. Why? We want to avoid early assignments. We then maintain that trade at 90 DTE or farther until we are able to roll the trade closer to the money. In order to roll deep in the money strangle, we sometimes have to change the trade to a staddle (meaning we bring the trade calls and puts strikes together). That helps in rolling the trade away for credit.
trade.

None of the above helps

If none of the above-mentioned strategies help, for example rolling would require adding more money or more buying power at the bad trade, we then take assignments. But if we do not have enough cash for put assignment, we start rolling the trade away in time as is. No changing of strikes, only moving it away in time. Usually, the opposite side brings in enough credit to offset the cost of the challenged side. This buys us time to accumulate cash and take a stock assignment. If it is a call side, we start hedging the trade by buying shares to cover the call side. If this is not feasible (for example our call strike is at $30 a share and the stock is trading at $100 a share then hedging makes no sense. In this case, I add a put and sell 2 puts to roll 1 call. It is a kinda uneven strangle. But it takes planning, releasing cash for the new obligations. If your account is stressed, then just roll until you are ready to let it go (or the market decides to work with you, and the stock retreats and allows you to roll up (or get out).
trade.

Just do it

 
When doing all these adjustments, you must do it. You must try it. I always play with those adjustments, meaning I am simulating them. I do not place those trades but I simulate the adjustments to see what the trade would look like and what the result would look like if I do that adjustment. When I am happy with what I see, I do it. If not, I rather wait. It’s a game and you have to play it. If you are not sure, just roll the entire trade away as is – same strikes just longer expiration until you find a solution you like.

As I said a few times before, options are a fluid trading vehicle. No rules are set in stone. The best way to find a solution to a bad trade is to play with it. What worked once may not work again this time and something else would work better.

Here is our investing and trading report:

Dividend Investing and Trading Report

 
Last week, we have received a $23.55 dividends income. We feel that the income will be growing faster as more of our holdings mature and become eligible for dividend payouts. According to our holdings currently on our balance sheet, all stocks should generate $4,044.00 annual dividend income. It is not as of yet because many of the stocks were purchased recently and we missed their dividend. But next year, we should be receiving the full amount.

The chart below indicates our current annual dividend payout from our dividend stock holdings.

Last week, our dividend income reached 76.62% of our dividend income goal.

Options Investing and Trading Report

 
Last week we rolled a few trades to release a stressed buying power in our account. We rolled TSLA, SPCE, SPX, BA, AAPL, CROX, CSCO, MU, TSN, OXY, DKNG, and IJS. These trades are now in good shape and some were ready to expire worthless for a full profit.

We opened new trades against QYLD (short put), and PMT (short put).

We had 8 trades that expired on Friday:
 

We will be reopening these trades during the next week or two.

The new trades and adjustments delivered $719.00 options premiums last week.
 

You can watch all our trades in this spreadsheet and you can also subscribe to our newsletter for our trade alerts.
 

Expected Future Dividend Income

 
As the table at the beginning of this report indicates, our aggressive dividend growth stocks accumulation is starting to show significant progress in our future dividends income. Our portfolio dividend yield and dividend growth will be bringing us almost $169,107.79 in 20 years and $7,689,838.06 in 30 years. I wish, I had that $7 million income now. But that is the fate of dividend growth investing. It is not a quick rich scheme and building an account takes time.

We will keep aggressively accumulating dividend growth stocks to generate liveable income sooner than in 20 years. And the portfolio is starting to show this to be happening. In just 10 years, we will start receiving $17,602.81 in today’s dollars. It is not bad considering that in March 2021 it was only $3,202.52 in projected future dividends.

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 $93,468.90 to $94,437.23. Last week, we added 50 shares of QYLD, 10 shares to ICSH, 1 share of SNOW, and 20 shares to PMT.

We use ICSH as a savings account and as of today, we are mostly in a preservation mode. We feel like our balance sheet is way aggressive and has no cash reserves. Therefore, we are mostly adding money to our cash reserves.

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 2.83% monthly ROI in July 2021, totaling a 40.41% ROI YTD. We are getting close to our 45% mark!

Our account grew by 258.41% this year despite very slow growth in June and July. I suggest the growth was suppressed by the market volatility and options trades increasing their maintenance requirements that ate the net-liq value. Once the options expire (hopefully) the net liquidating value will go up faster.
 

Our options trading averaged $4,256.14 per month this year. If this trend continues, we are on track to make $51,073.71 trading options in 2021. With the income of $29,793.00 to date, we are half way to this projected income.
 

Old SPX trades repair

This week, we rolled our old SPX trades way higher and away in time. I am not yet decided what to do with these positions. My original plan to try to roll it out of the money doesn’t work. So, I am now thinking to keep the trades rolling until I will be able to apply for portfolio margin and convert these Condors into strangles. With a portfolio margin, I will only need about $10,000 buying power per strangles. With a Reg-T margin, I need $55,000 buying power. Not feasible to trade under such circumstances.

Accumulating Growth Stocks

Last week, we added 1 share to our SNOW position.

Accumulating Dividend Growth Stocks

Last week, we added 50 shares of QYLD, 10 shares of ICSH, and 20 shares of PMT to our dividend growth positions. In the upcoming weeks, we will be accumulating aggressively the higher yield income stocks to boost our dividend income furthermore.

Our goal is to reach 100 shares of high-quality dividend stocks and build a weekly dividend income as per this calendar, but we have made no changes to this goal last week:
 

 
You can see the entire spreadsheet here.

Market Outlook

The market was going up last week and it reached (almost) our price target. It got close to it. But that move upwards was not very convincing. It was in fact very weak move and we had a few hiccups on the road up. A week ago, the market dropped on inflation fears but recovered quickly just to lose it all again at the end of this week.

The market is looking for direction. And this trend may continue for a week or two. We may also see a correction of 10% (more or less). And honestly, even though the market may continue higher, I am more and more in favor of seeing a correction sparked by inflation fears.

But I am in the FED camp, or Jerome Powell’s camp, who insists that the inflation is transitory. I agree with that. I agree with renowned economist Lacy Hunt who says inflation is transitory and typical to recovering economies. We had a spike in inflation after every recession. We had a spike in inflation in 2009 after the economy started recovering from the Great Recession and people were predicting another crash. Remember that? Many were predicting a crash all the way until 2013-2014! But that never materialized.

Inflation doesn’t cause a recession. It is an effect of a recession. When businesses came to life after March 2020 40% crash boosted by the US government support and people receiving stimulus checks (in a similar manner as we experienced in 2009) it is obvious that there would be a spike in inflation. And there will be the same exact doom and gloom talk about it.

I still remember some pundits saying in 2009 – 2013 that this would all end badly because FED lowered interest rates to zero, started a huge QE program, and as interest rates started skyrocketing FED would have nothing left to fight it off. Well, 13 years later, history repeats itself.

Here is a video of an interview with Lacy Hunt and his excellent presentation. I would like you to watch it. It will give you a great insight into the economic behavior around recessions. How GDP behaves? Money flow and money supply? Inflation? We have experienced it all in 2009 and people already forgot.

So, if you see the market selling off on fear of inflation, buy. It is a dip that will leave naysayers and doom predictors biting the dust.

But, this doesn’t mean that the market will not sell-off. As I mentioned above, I expect it to cool off a bit. I expect it to retest our previous breakout and go lower to a $4,250 level. It may be just a one-day dip, quick and fast, that would recover quickly, or it may not materialize at all.

One reason for this expectation not happening is simple – earnings, earnings, earnings. And we just started another earnings season and so far, the companies are beating it. And as in real estate, location is the most important factor driving prices, in the stock market, it is earnings. And the market trails the earnings predictions so far. When we see earnings going down, expect problems:

Based on these estimates, the SPX should be trading at $3,394.00, 27% lower than today, and based on the future earnings estimate, the SPX intrinsic value is at $4,119.36 (5% below the current price). The stock market is pricing the price range to be at $4,080.00 and 4575.00. With this cold market looking for a direction, it is difficult to say where it wants to go.

Investing and trading report in charts

Account Net-Liq

Account Stocks holding

Our stock holdings still do not beat the market. However, I expect it to change over time. S&P 500 grew 49.59% since we opened our portfolio while our portfolio grew 16.39% only. On YTD basis, the S&P 500 grew 19.74% and our portfolio 9.41%.

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 258.41%!
 

Stock 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 goal is to grow this account to $1,000,000.00 value in ten years. We are in year two.

Investing and Trading Report – Options Monthly Income

Investing and Trading Report – Options Annual Income

Our dividend goal and future dividends

We are on track to accomplish our dividend income goal, currently, we are at 76.62% of the goal to reach $1,071 of dividend income this year. Currently, we accumulated enough shares to receive $4,044.00 in annual dividends if we have held through the entire dividend cycle.
 

The chart above is the corrected chart comparing the projected MONTHLY dividend income vs received dividend income. And again, the projected dividend income is based on the stock holdings up to date. That is the income we would have received if we have held over the entire dividend cycle.

Our account cumulative return

The chart below indicates our cumulative adjusted return. It shows how the last week’s selloff shook down our returns but we are recovering along with the market.
 

As of today, our account cumulative return is 28.50% (since March 13, 2021).

Conclusion of our investing and trading report

This week our options trading exceeded our expectations. I hope, the rest of the month will be even better.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares. We will also replenish our cash reserves to bring them back to 25% of our current net-liq value.

We will report our next week’s results next Saturday. Until then, good luck and good trading!

The market didn’t like the FED meeting and what they came up with after they finally admitted that the inflation may not be as transitory as they were trumpeting last few months. In this trading report, we will look at our investing and trading results, and focus on the market direction and how to protect our portfolio against the new inflationary cycle.
 

Let’s go and review this week’s investing and trading.

Here is our investing and trading report:

Dividend Investing and Trading Report

 
Last week, we have received a $43.99 in dividends income. We feel that the income will be growing faster as more of our holdings mature and become eligible for dividend payouts.

The chart below indicates our current annual dividend payout from our dividend stock holdings. A dividend growth investor needs to be aware of this payout from each stock. The chart indicates that some stocks contribute (or will be contributing to our income with large sums while others contribute very little. That can be a problem. If a company that contributes with large dividends suddenly cuts the dividend, it will have a very significant impact on our income (for example, if OMF cuts the dividend, or suspends it, the impact on our portfolio dividend income will be significant.

I am OK with this imbalance during the accumulation phase but plan to address it in the next phase of cultivating our portfolio. In other words, in the next phase, I will be accumulating stocks with lesser payout to match the stocks that pay more in dividends. If a company cuts the dividend, the impact of a lost income will be mitigated.

Last week, our dividend income reached 56.41% of our dividend income goal.

Options Investing and Trading Report

 
Last week we didn’t trade much. We rolled a few trades that got in trouble. We also reopened some of the trades that expired two weeks ago and we were waiting for the market to show its direction.

The new trades and adjustments delivered $974.00 options premiums last week.

We had a few trades expiring this week and we may re-open them next week (but that will depend on the market). The following trades expired for a full profit:

1 TSLA Jun18 660/670 bear call spread for +0.70 credit
1 TSLA Jun18 530/540 bull put spread for +0.83 credit
1 KBE Jun18 50 put / 60 call strangle for +0.67 credit
1 O Jun18 65 put for +0.45 credit
1 ABBV Jun18 108 put / 123 call strangle for +0.86 credit
1 AES Jun18 24 put / 27 call strangle for +0.31 credit
1 OXY Jun18 26 put / 32 call strangle for +0.52 credit

We had to roll our APAM trade, and our KBE puts got in the money. I was not able to roll the trade (I was not in front of the computer) and we got assigned to 100 shares of KBE. However, in the inflationary environment, banks should perform well and KBE is a banks’ ETF. So I plan on staying in the position (if I have enough cash in the account, due to SPX open trade, over the weekend, the account pricing is messed up by the broker and I can’t see what buying power I have available, so I have to wait until Monday to make the decision whether to keep KBE or close the position). If I stay, I will be selling covered calls.

You can watch all our trades in this spreadsheet and you can also subscribe to our newsletter for our trade alerts.
 

Expected Future Dividend Income

 
As the table at the beginning of this report indicates, our aggressive dividend growth stocks accumulation is starting to show significant progress in our future dividends income. Our portfolio dividend yield and dividend growth will be bringing us almost $152,246.48 in 20 years and $6,863,144.95 in 30 years. We will keep aggressively accumulating dividend growth stocks to generate liveable income sooner than in 20 years. And the portfolio is starting to show this to be happening.

The chart above shows how our future dividend income based on the future yield on cost develops 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 $78,473.04 to $83,739.91. Last week, we added a few stock positions to our portfolio, such as 10 shares of ICSH, 100 shares of KBE (put assignment), 20 shares of TSN, and 10 shares of WBA.

 

 
Our goal is to accumulate 100 shares of each stock of our interest and we are getting to that goal. However, as mentioned above, this harms our dividend payout and portfolio growth. Although, it is temporary. Therefore, once we reach this goal (which we set because of the ability to trade covered calls), we will start accumulating these shares to equalize our dividend income rather than have an equal amount of shares.
 

Investing and trading ROI

Our options trading delivered a 3.65% monthly ROI in June 2021, totaling a 36.55% ROI YTD.

Our account grew by 240.32% this year.
 

Our options trading averaged $4,264.50 per month this year. If this trend continues, we are on track to make $51,174.00 trading options in 2021.
 

Old SPX trades repair

This week we have not done any adjustments to our old SPX trades. We are still sitting on those trades and waiting for the untouched side to close so we can roll the trades again. The goal will be to roll the trades until we will be able to close them for at least break even and release the buying power. We will keep doing this only if the resulting trade will be a credit trade or a very small debit. If adjusting these trades would require adding more new money, we would rather close these trades and move on.

Accumulating Growth Stocks

Last week, we didn’t add any speculative or growth stocks to our portfolio.

Accumulating Dividend Growth Stocks

Last week, we added 10 shares of ICSH, 100 shares of KBE (put assignment), 20 shares of TSN, and 10 shares of WBA to our portfolio.

Our goal is to reach 100 shares of high-quality dividend stocks and build a weekly dividend income as per this calendar, but we have made no changes to this goal last week:
 

 
You can see the entire spreadsheet here.

Market Outlook

The FED announced at its last week’s FOMC meeting that they may raise the interest rate in 2023. But not just once but possibly twice. The stock market didn’t like it and retreated from the all-time high.

In the last few weeks, the S&P 500 traded sideways in a narrow channel, it even broke the upper channel trendline but it was not convincing at all. On Wednesday and especially Friday, the market retreated hard. Currently, the market is trendless and there are no signs of direction. It can go anywhere from here.

The FED is also prepared to start reducing its bond purchasing program (at least they talk about it). That could pour more fuel on the market’s downward fire. There are several dangers for the market.

The FED is going to hike interest rates, but European Central Bank, ECB, announced that they have no interest in raising their rates and that they will keep them low at 0.00 to -0.5%. If FED does raise rates, that could spark outflows from the US markets to European markets and we might see a substantial correction.

This can easily tamper with Fed’s intentions.

Why did value stocks drop?

In the inflationary environment and rising interest rates, value stocks and low PE growth stocks perform the best. One would see banks, insurance companies, and tech stocks actually making money, not the meme stocks, rallying. But on Friday, everything went down, except the tech stocks that should not have gone down. What the heck? So why the stocks that should strive dropped? The reason was the dollar. The dollar jumped up after the announcement. But this appears to be a brief shakedown and market repositioning. Nevertheless, the growth stocks seem to be back.

The best strategy? A mix of both, the growth stocks and value stocks.

70% probability of going down

Overall, I am still bullish and I expect the market to go as high as $4,800 – $5,000 by 2023. The reason is that the overall S&P 500 earnings expectation for the next years and the following year is extremely strong (the US economic growth is expected to remain above 5% well into 2022 and the inflation will decelerate according to Wells Fargo, and S&P 500 EPS is up to $220). That will fuel the market up. The interest hike is already priced in today’s market and unless FED comes up with any surprise (or the economy) all the events are priced in. Nothing new to expect.

But short term, we may see some correction.

The best scenario is that from here we would bounce, and continue higher. The market is sitting at a 50-day moving average and it went nowhere for months. It could be an end of a consolidation pattern. But I do not see anything that would confirm this trend, so it is just speculation.

We could continue lower to retest the previous lows before we go higher again.

But given how extended the market is, inflated by cheap money, I lean towards the declining scenario and I think we will see a correction. If we break the 50-day moving average, the $4,000 level or $3,966 level (that would correspond to a 7% correction, so we may even overshoot that target, if the market decides to go down) is very likely.

Investing and trading report in charts

Account Net-Liq

Account Stocks holding

Our stock holdings still do not beat the market. However, I expect it to change over time. S&P 500 grew 44.03% since we opened our portfolio while our portfolio grew 14.35% only. On YTD basis, the S&P 500 grew 14.19% and our portfolio 7.36%.
 

Account 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 goal is to grow this account to $1,000,000.00 value in ten years. We are in year two.

Investing and Trading Report – Options Monthly Income

Investing and Trading Report – Options Annual Income

Our dividend goal and future dividends

We are on track to accomplish our dividend income goal, currently, we are at 56.41% of the goal to reach $1,071 of dividend income this year.

However, the chart below indicates that our dividend income will possibly exceed this goal as we accumulated enough shares to receive $3,548.03 in dividends.
 

Our account cumulative return

The chart below indicates our cumulative adjusted return. It shows how the last week’s selloff shook down our returns but we are recovering along with the market.
 

As of today, our account cumulative return is 22.85% (since March 13, 2021).

Conclusion of our investing and trading report

This week our options trading exceeded our expectations. I hope, the rest of the month will be even better.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares. We will also replenish our cash reserves to bring them back to 25% of our current net-liq value.

We will report our next week’s results next Saturday. Until then, good luck and good trading!

23 weeks of providing our investing and trading account report showing successful growth. We kept buying assets – dividend growth stocks and trading options around those positions. We consider our stocks to be assets, like real estate units which we rent to tenants and those tenants pay us rent. So our stocks, like tenants, pay us rent to own them – dividends and options premiums.

We also started our $100 Challenge account which is slowly but successfully growing. It will be a slow process to grow $100 to a large account, but I can already see that we will exceed our goal. I will be providing our $100 Challenge account report this Tuesday. SUBSCRIBE to our program if you too want to join our team and grow a small account to a large one.
 

Let’s go and review this week’s investing and trading.

Here is our investing and trading report:

Dividend Investing and Trading Report

 
Last week, we have received a $5.72 in dividends income. We feel that the income will be growing faster as more of our holdings mature and become eligible for dividend payouts.

The chart below indicates our current annual dividend payout from our dividend stock holdings. A dividend growth investor needs to be aware of this payout from each stock. The chart indicates that some stocks contribute (or will be contributing to our income with large sums while others contribute very little. That can be a problem. If a company that contributes with large dividends suddenly cuts the dividend, it will have a very significant impact on our income (for example, if OMF cuts the dividend, or suspends it, the impact on our portfolio dividend income will be significant.

I am OK with this imbalance during the accumulation phase but plan to address it in the next phase of cultivating our portfolio. In other words, in the next phase, I will be accumulating stocks with lesser payout to match the stocks that pay more in dividends. If a company cuts the dividend, the impact of a lost income will be mitigated.

Last week, our dividend income reached 52.30% of our dividend income goal.

Options Investing and Trading Report

 
Last week we didn’t trade much. We rolled a few trades that got in trouble. We also reopened some of the trades that expired two weeks ago and we were waiting for the market to show its direction.

The new trades and adjustments delivered $1,191.00 options premiums last week.

You can watch all our trades in this spreadsheet and you can also subscribe to our newsletter for our trade alerts.
 

Expected Future Dividend Income

 
As the table at the beginning of this report indicates, our aggressive dividend growth stocks accumulation is starting to show significant progress in our future dividends income. Our portfolio dividend yield and dividend growth will be bringing us almost $127,118.28 in 20 years and $5,596,366.12 in 30 years. We will keep aggressively accumulating dividend growth stocks to generate liveable income sooner than in 20 years. And the portfolio is starting to show this to be happening.
 

Market value of our holdings

 
Our non-adjusted stock holdings market value increased from $75,289.49 to $78,473.04. We did not add any new positions last week.

 

 
Our goal is to accumulate 100 shares of each stock of our interest and we are getting to that goal. However, as mentioned above, this harms our dividend payout and portfolio growth. Although, it is temporary. Therefore, once we reach this goal (which we set because of the ability to trade covered calls), we will start accumulating these shares to equalize our dividend income rather than have an equal amount of shares.
 

Investing and trading ROI

Our options trading delivered a 2.18% monthly ROI in June 2021, totaling a 34.03% ROI YTD.

Our account grew by 251.54% this year.
 

Our options trading averaged $4,102.17 per month this year. If this trend continues, we are on track to make $49,226.00 trading options in 2021.
 

Old SPX trades repair

This week we have not done any adjustments to our old SPX trades. We are still sitting on those trades and waiting for the untouched side to close so we can roll the trades again. The goal will be to roll the trades until we will be able to close them for at least break even and release the buying power. We will keep doing this only if the resulting trade will be a credit trade or a very small debit. If adjusting these trades would require adding more new money, we would rather close these trades and move on.

Accumulating Growth Stocks

Last week, we SNOW to our portfolio.

Accumulating Dividend Growth Stocks

Last week, we added TD, SPLG, and ICSH to our portfolio.

Our goal is to reach 100 shares of high-quality dividend stocks and build a weekly dividend income as per this calendar, but we have made no changes to this goal last week:
 

 
You can see the entire spreadsheet here.

Market Outlook

The market continued its sideways bound trading when optimism was replaced with inflation fears just to dismiss them later upon job report. Tech stocks continue struggling and the entire market seems to be consolidating. And that is good.

55% probability of going up

It is hard to say where we will go from here. It can be down as well as up. No one knows. We have to wait for more clues to find out. As of now, we are in a range and we have to wait. The market is slightly skewed to the upside but it can all change on a dime the very next day.

I still expect the stock market will most likely push to the $4,300 – $4,400 level (second half of July 2021) and then we may see some serious correction (15% to 25%) before the market resumes its uptrend. We are still in a very strong secular bull market, so do not expect any catastrophe or doomsday as talking heads and Perma-bears start crawling out of their holes. But that is just pure speculation.

Investing and trading report in charts

Account Net-Liq

Account Stocks holding

Or stock holdings still do not beat the market. However, I expect it to change over time. S&P 500 grew 46.83% since we opened our portfolio while our portfolio grew 16.69% only. On YTD basis, the S&P 500 grew 16.99% and our portfolio 9.70%.
 

Account 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 goal is to grow this account to $1,000,000.00 value in ten years. We are in year two.

Investing and Trading Report – Options Monthly Income

Investing and Trading Report – Options Annual Income

Our dividend goal and future dividends

We are on track to accomplish our dividend income goal, currently, we are at 52.30% of the goal to reach $1,071 of dividend income this year.

However, the chart below indicates that our dividend income will possibly exceed this goal as we accumulated enough shares to receive $3,387.82 in dividends.
 

Our account cumulative return

The chart below indicates our cumulative adjusted return. It shows how the last week’s selloff shook down our returns but we are recovering along with the market.
 

As of today, our account cumulative return is 27.15% (since March 13, 2021).

Conclusion of our investing and trading report

This week our options trading exceeded our expectations. I hope, the rest of the month will be even better.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares. We will also replenish our cash reserves to bring them back to 25% of our current net-liq value.

We will report our next week’s results next Saturday. Until then, good luck and good trading!