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September 2017 results

Another month is over and time to review my accounts, trading and investing results for September 2017.

September was volatile month mainly to my trading yet I was able to end higher than in August in all accounts.

Again, this month, I was not focusing on income but rather on bringing my accounts to the rules (trading account especially) which I have neglected before and now I am over invested/traded. This can be dangerous when the market turns down. If that happens, I might not be able to manage my trades properly so I must unload some positions to make room for violent turns. So far, I want to do it slowly without liquidating my positions and taking a loss.


 · ROTH IRA account:


September 2017 account value: $23,255.24   ▲ (up by $512.43;  2.25%)
September 2017 dividend income: $89.45   (down from previous $91.23)
September 2017 options income: $74.40   ▲ (up from previous $59.44)
XIRR: 9.59%   ▲  



Monthly dividend Income:


My dividend holdings:

Options Income
(Click to enlarge)


 · TD account:


My trading account ended higher for the month, however, I am still focusing on bringing the account back to my trading rules. Thus this month it was not about income (which was very low this month) but growth. And the account grew nicely. I hope, as I will be able to unwind some of my positions, the account will grow more.

September 2017 account value: $23,323.87   ▲ (up by $1,906.66;  8.90%)
September 2017 options income: $90.05   ▲ (up from previous -$1,308.67)
XIRR: -27.27%    


Month-to-moth trading results

Trading results

(The red dots on the chart indicate income estimate, blue bars actual earnings.)



We are presenting you our month-to-month business performance review:


 · Lending Club


Lending Club investing proceeded well in September, except one note. The first note got into a Grace period with an overdue payment. It was a “B1” note where the irresponsible borrower asked for 6,000 dollars loan for debt consolidation. He or she failed to pay their very first payment. Funny thing is that the borrower was a loan officer (probably in a bank) and it looks like he or she was determined to skim the lenders.

When reviewing the loan listing, I noticed a few things:

The employment length was less than 1 year (so this was my first note as at the very beginning I ignored employment length in selecting notes. Now I have a minimum 2 years and it seems like I will be extending this to a longer period of 3 or 4 years.

The second thing I noticed was Revolving Line Utilization at 79.80% and that is very high in my opinion. I do not have this metric included in my selection process, so I will be adding it to eliminate overextended borrowers which are more likely to fail paying their debt.

What baffles me though is a high credit score of this borrower. He has a score at 714. With such behavior and line of credit it is a mystery to me that he has such a high credit score.

September 2017 account value: $414.14   ▲ (up by $100.97   32.24%)
September 2017 interest income: $2.28   ▲ (up from previous $0.00)
XIRR: 3.69%  



 · IRA Account


As I wrote in my previous post I recently changed jobs and got a new one. This move had many positives. I have a better, satisfying job now, and it also released my 401k funds which I decided to transfer into a self-directed IRA account.

My old 401k account ended with $87,646.23 dollars which I will be rolling in October to my new IRA account (an estimate is around October 5, 2017).

Once rolled, I will apply the exact same strategy as I use in my ROTH IRA account.

I will be selling jade lizard trades which will consist of cash secured puts and call spreads against dividend stocks with approx. 30 days to expiration in an attempt to collect monthly premiums.

In a dividend month, I will let the put option assign to the stock so I will attempt to sell in the money puts or near the money puts to make sure I get assigned. If not possible (for example there will be a risk of being assigned too deep in the money) I will do a buy-write strategy to buy the stock out right and sell a covered call. My friend Bob from our trading group mastered this strategy so I will follow his lead to make sure I do the buy-write correctly.

After I buy the stock, I will collect dividends and sell covered calls (if jade lizard will still be on, then I will sell the long call and keep a short call as a covered call).

The goal will be to sell the stock using covered call. Once I will be out of the stock again, I will start selling new jade lizards to repeat the process.

I also decided to include this account into my reporting here from now on.


 · Conclusion


My market and economy outlook is still bullish and I think no investor or trader should be selling their positions based on the valuation. If inflation is included into the equation then this market is still very cheap and may run higher.

Since May 2017 I keep saying that the US economy is improving and accelerating that we saw increasing year-over-year sales, earnings (the second best since 2011), in June 2017 I showed you the numbers on consumer confidence. increased capital expenditure, corporate profits, all up. And this trend continues as recently financial media reported revised GDP above 3%, something I have been saying since June 2017 that our economy is increasing from lack luster 1.4% (and back then to 2.5%, now to 3%).

As long as we see this improvement there is no need to be selling your stocks on valuation. Instead, buy every dip you can.

What do you expect from the stock market in October? What is your strategy for the rest of the month?

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