Sunday, March 30, 2014

Rescue My IRA March 2014 Results

While the market value of Rescue My IRA shows sideways movement for March, the account’s cash value actually grew, so I’d assess this as a good month.  That’s despite the fact that global chaos and tepid economies continue to be in the mix.  As I noted last month, Warren Buffet and others have said that good news or bad, the stock market rises in the long term – so I’m holding my place with about 70 percent of Rescue My IRA in stocks.

I plan to continuing rolling along with this unusually large (at least compared to what I've typically maintained in the account) cash reserve on hand until we get a little bit of a correction, or until the market starts moving up again.  While I have had this strategy in place, I have been a little worried about my portfolio approach – I only have 9 or 10 positions going at the moment, as opposed to the 12 to 16 that I consider optimal.  As cash becomes available from position close outs, I am investing with the goal of lowering the average position value to create more diversity in the account.

To close out these introductory remarks, I’ll repeat that March was a good month:  the account value reached above $158K a couple of times before settling at the value I’m reporting today as of month end. Although it didn’t start out that way, the dividend returns were higher than usual, at $437.00, and call premiums were lower, at $325 – just about a half percent return between the two of them.  Rounding out the returns was a solid gain on ABT, which I unwound earlier in the month, so the account met my goal of more than 1% return for the month.   

Here is a summary of my Rescue My IRA statistics for March 2014, based the March 28, 2014 close.   

Account Status:
·         Total Account Value, 3/28/2014 Market Close:  $157,488.79 (vs. February close of $157,816.52)
·         Total Cash Reserve, 3/28/2014 Market Close:  $53,892.78
·         Core Stock Positions (as of 3/28/2014):   CAT (100 shares), CRUS (400 shares), F (500 shares), FB (200 shares), GLW (600 shares), IP (200 shares), KO (400 shares), PFE (300 shares), PSA (100 shares), WIN (900 shares)

Performance Metrics:
Option Premiums Collected (net, month of March):  $325.26 (0.21 %)
Capital Gains Collected (net, month of March):  $1,135.73 (0.74 %)
Dividends Collected (recognized on the ex-date): $437.00 (0.28 %)
Interest on Cash Reserve (laughable): $0.38
Total, Absolute Return:  $1,898.37 (1.23% absolute return, 14.74% annualized return)

Next Month To-dos:

As I look forward to April, the month looks to be one where it will be a challenge to meet my goal of a 1% absolute return:  only two positions are scheduled for dividends (CAT and F), and I have three calls expiring (CRUS, GLW, and PFE).  The dividend income is offset by slight stock losses on these three positions combined, so I am starting off with a forecast of zero percent absolute return. 

I’m continuing to rebuild my spreadsheets for the account – the battery replacement on the old Dell didn’t end up working.  Mostly, I have everything back to a place where I can manage the account and keep the blog up to date.

I hope my readers have enjoyed a couple of good months in February and March, as I have.  Until April, happy trading!

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