Rescue My IRA - May 2014 Results

Mary and I were away on vacation for the last week of May, and it had turned out to be a fairly slow month for trading in Rescue My IRA in any case, so I’m posting for the first time in a few weeks. 

The statement value of the account has reached an all-time high (so far!) of more than $161K, but on “cash flow” terms, May was a net negative, although not by much.  I rolled out and up several positions, trading cash on buy-to-close premiums for longer term stock gains.  Also, no positions were called away during May, so there were no gains to offset the cost of the options premiums I closed.

With the vacation and other distractions, I consider May 2014 a holding pattern month.  June is looking better already, just three days in.  Here is a summary of my Rescue My IRA statistics for May 2014, based on the May 29, 2014 close.    

Account Status:

·         Total Account Value, 5/29/2014 Market Close:  $161,404.45 (vs. March close of $160,205.03)

·         Total Cash Reserve, 5/29/2014 Market Close:  $39,180.45

·         Core Stock Positions (as of 5/29/2014):  CRUS (400 shares), F (500 shares), FB (200 shares), GE (300 shares), INTC (300 shares), IP (200 shares), JPM (100 shares), KO (400 shares), MAT (200 shares), PFE (300 shares), PSA (100 shares), SBUX (100 shares), WIN (900 shares)

Performance Metrics:

·         Option Premiums Collected (net, month of May):  -$741.14 (-0.41 %)

·         Capital Gains Collected (net, month of May):  $0.00 (0.00 %)

·         Dividends Collected (recognized on the ex-date): $319.50 (0.21 %)

·         Interest on Cash Reserve: $0.30
Total, Absolute Return:  -$421.34 (-0.27% absolute return, annualized return not calculated) 

Next Month To-dos:

Looking forward to June, four positions are due to go ex-dividend, yielding an estimated $553.00, or 0.36% for the month.  Three of the four are in the money – KO, PSA, and WIN – while one is not – GE.  However, all of the in the money positions are in back months – August through November – so the likelihood of having these positions called away is low.

There is only one June contract on the books: the 100-share SBUX position.  The option is a $72.50 covered call and the shares are in the money.  If it is called away, I will record a sock gain of $182.00, adding to the month’s proceeds.

During the spring I took steps to further diversify this portfolio, moving from 10 positions to 13.  I am considering the addition of one more position, totaling 14, and if I take this step, I will probably ratchet down the cash reserve portion of the account to 20% of the statement value.  That will give me about $7K to play with on that trade.

Well, that’s it for May, not the most exciting month for Rescue My IRA.  So, until next month, happy trading!