Wednesday, August 6, 2014

Rescue My IRA: July 2014 Results

Just thinking, the month of July ended with the Rescue My IRA very close in statement value to how it began – valued at about $100 less for the month.  This closely reflects the trading results for the month, which were about -$240 or so (yes, that is a net loss from an accounting standpoint).  There were a couple of points during the month where the account value stood at above $165K, but it appears the summer doldrums have arrived and the account did not hold at that value.

As I look at the activity records for the month, there were 12 trades in addition to the typical amounts of dividends and stock gains.  That’s a lot of work for a more-or-less breakeven month!  It reminds me of an article I saw recently about just buying an S&P 500 index fund and sitting on it for years.

That might work for some people, but I do feel that I have done well with my covered call approach and I intend to keep using it.  The approach does appear to protect my account value, however – Rescue My IRA is still up about 5% for the year, while many of the Dow stocks are showing negative results YTD.  And bottom line, I think the market still has some room to grow for a few more months, at least.

Finally, here is the monthly summary of Rescue My IRA statistics for July, based the July statement values.     

Account Status:
·         Total Account Value, 7/31/2014 Market Close:  $163,409.85 down slightly from July close of $163,508.74)
·         Total Cash Reserve, 7/31/2014 Market Close:  $57,697.97
·         Core Stock Positions (as of 7/31/2014):  AAPL (100 shares), CNP (300 shares), CRUS (400 shares), DIS (100 shares), FB (200 shares), GE (300 shares), IP (200 shares), JPM (100 shares), KRFT (100 shares), PFE (300 shares), PSA (100 shares), SPY (100 shares), TGT (100 shares)

Performance Metrics:
·         Option Premiums Collected (net, month of July):  -$1,175.85 (-0.76 %)
·         Capital Gains Collected (net, month of July):  $574.16 (0.37 %)
·         Dividends Collected (recognized on the ex-date): $360.58 (0.23 %)
·         Interest on Cash Reserve: $0.30
·         Total, Absolute Return:  -$240.81 (-0.16% absolute return, annualized return

Next Month To-dos:

Looking forward to August, four positions are due to go ex-dividend, yielding an estimated $240.25, or 0.16% for the month – that will make August a slow month for dividends.  As the month began, three of the four were in the money – AAPL, CNP, and TGT, and one was out of the money – IP.  I have subsequently rolled out IP, so that dividend is safe, while I don’t expect the others to be called away since the contracts are in back months.

Two of my larger positions – DIS and SPY, have expirations this month.  If those shares are called away, there will be a net gain of $115.07, or 0.07% for the month.  Given what looks to be sideways or downward trading for August, I don’t expect to be assigned and will likely be rolling these out at some point.

There’s a lot of ground to cover with covered call premiums this month if I am going to make my goal of 1% overall returns.  I’m already working on it, though!

That’s it for the July Rescue My IRA results post – all in all, it was an okay month, and trading in this account remains very rewarding.  Until next month, happy trading!