Friday, March 1, 2013

February 2013 Monthly Results

Last month I wrote that it seemed the economy has turned the corner; during February, that thought was reinforced, although there were reminders that the recovery is still tenuous and we are likely still several years away from firing on all cylinders.  And the threat of sequestration still hands over our heads, in place now as this post goes up.  I still believe this lopsided approach to Congressional budgeting will impact the economy, but who knows how much. 

For the Rescue My IRA account, February was a steady month where I collected revenues from all three of my typical sources: covered call premiums, dividends, and stock gains.  It was an unusually strong month for stock gains, as a matter of fact, with four covered calls assigned on the HAL, LNC, SWK, and WAG positions and gains totaling almost $1,700 – more than one percent of the account’s total value.

February was a good month for dividends – I collected $287 from this revenue source on five positions.  The WAG call was assigned on the ex-dividend date, so that position was finally closed after nearly a year of holding it – it was a nice hat trick, that one, a good example of what I am trying to do here with every position I establish.

So, finally, here are the Rescue My IRA statistics for February 2013, as of the 2/28/2013 market close:

Account Status:

·         Total Account Value, 2/28/2013 Market Close:  $137,194.43 (vs. January close of $138,735.11)
·         Total Cash Reserve, 2/28/2013 Market Close:  $7,383.93
·         Core Stock Positions (as of 2/28/2013):   AFL (200 shares), CAT (100 shares), CMI (100 shares), CSCO (500 shares), CSX (500 shares), DOW (300 shares), GLW (700 shares), ITW (100 shares), MRK (200 shares), MSFT (300 shares), SPLS (700 shares), UNH (200 shares),URS (400 shares)

Performance Metrics:
  • Option Premiums Collected (net, month of February):  $475.88
  • Capital Gains Collected (net, month of February): $1,671.35
  • Dividends Collected (recognized on the ex-date): $287.00
  • Interest on Cash Reserve (total): $0.08
  • Total, Absolute Return:  $2,434.31
  • Absolute Return, Percentage Basis:  1.83%
  • Annualized Return, Percentage Basis:  22.29%

Next Month To-dos:

February will be a pretty good month for dividends; I can forecast about $420 in total payments due to ex-dates coming up for DOW, ITW, MRK, SPLS, UNH, and URS.  All of these shares except SPLS have April contracts on them, and at the time of this writing, two are in the money – so there may be some early assignments out of the lot. 

There is only one March option position, CMI (100 shares at $120).  It is currently out of the money, but has been on a little run for the last week, so we’ll see how it goes.  There isn’t much to report by way of a stock gain at that strike price – less than $30 – but if it is called away I will have a small hat trick there.

Hopefully the market will chug along at these levels and I can just tend to the positions as if they were crops this month.  As March gets started, I can’t forecast much activity otherwise, besides the potential for assignment or rolling the CMI position, and the dividend action.

Until April, that’s the story.

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