Thursday, September 5, 2013

Rescue My IRA Results: August 2013

For most of August we had a good month of market action.  The Rescue My IRA showed a book value above $149K for a couple of days, as a matter of fact.  However, by the end of the month, the worries about what’s happening in Syria and the continued fear about upcoming Fed action to their toll, even as we continued to hear that the economy is still improving, and the balance ended up retrenching at around the $145K level.
That’s still up quite a bit from where the account started at the beginning of the year, around $133K – so needless to say, I think I will stick with covered calls.

As far as an overview of investing activities for the month of August goes, this was another good month for stock gains.  I unwound a couple of in-the-money contracts and took profits on them, while rolling out the out-of-the-money expirations.  That approximately $800 in gains, plus dividends of about $380, combined to get me very close to my goal of an average of 1% per month.  The balance of the returns came from a steady pace on adjustments – either roll-outs or roll-ups, which earned me more than 0.5% this month in about 15 transactions. 

For the monthly prognosis, I plan to continue to stay invested at the 90-95% level, even with a little consolidation going on.  Once there is some clarity to Syria and one the Fed’s intentions are clear, I think the market will regroup and we’ll see another one or two percent gains in the balance of the year.  I still plan to upgrade my Scottrade account to give me more flexibility in a steady/consolidation market next year, but in the meantime, like I said above, it’s covered calls for me.

So, finally, here is a summary of the Rescue My IRA statistics for August 2013, based on my August statement: 

Account Status:
·         Total Account Value, 8/30/2013 Market Close:  $145,215.47 (vs. July close of $147,023.95)
·         Total Cash Reserve, 8/30/2013 Market Close:  $11,432.72
·         Core Stock Positions (as of 7/26/2013):   AFL (200 shares), BA (100 shares), CAT (100 shares), CMI (100 shares), DVN (200 shares), IP (200 shares), KO (300 shares), PFE (400 shares), PSA (100 shares), SPY (100 shares), TGT (100 shares), and TRV (100 shares)

Performance Metrics:
Option Premiums Collected (net, month of August):  $713.58 (0.54%)
Capital Gains Collected (net, month of August):  $813.68 (0.68%)
Dividends Collected (recognized on the ex-date): $380.00 (0.29%)
Interest on Cash Reserve (estimated): $0.11
Total, Absolute Return:  $1,907.37
Absolute Return, Percentage Basis:  1.44%
Annualized Return, Percentage Basis:  17.47%

Next Month To-dos:

September will be a good month for dividends – about $411 is forecast from five positions:  TRV, DVN, PSA, KO, and SPY.  Only TRV is subject to a September contract, and it is out-of-the-money at the time of this post.  That return is about 0.31% on the account value.

There are currently three September contracts:  TRV, noted above, IP, and BA.  The BA contract strike price is $105.00 and it is in the money, while the others are not.  If all three positions wind up being called away, my forecast gain is $186 or so, only about 0.14% return on the account, combined with dividends totaling nearly half of my monthly 1% goal, so there is still some work to do to generate the returns I want. 

That’s it for now – I’ll update in a month! 

No comments:

Post a Comment