I use a portfolio
approach, typically holding 12 to 16 positions in the Rescue My IRA account at
any given time. By doing this, I can
manage a losing position here and there, because it will usually be offset soon by a
winner, and by the steady performance of most stocks that will yield my goal of
12% per year.
My TGT position was
one of the losers this year – I like the company and the stores, I’ve held
it successfully in the past, and it gets a high S&P rating. But the
position I started in August went into a tailspin almost immediately, and I saw
that I was rolling it down on a monthly basis.
Earlier this week I cut my losses, unwinding the covered call contract
and then selling the shares.
I’ll show a loss on
this one, but I expect to offset it fairly quickly with a new position.
Here’s the analysis:
TGT
Shares
August 2013 – Bought 100
shares for $7,079.99.
Per share basis of 100
shares is $70.80.
Yields
Total Option
Premiums: $137.96
Total Dividends:
$43.00
Total Stock
Loss: -$783.09
Total Absolute
Gain/Loss on the position: -$60.13
So my actual loss on
this position works out to -8.50%. I’m glad
I pulled the trigger before I was down 10%.
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