Rescue My IRA: November 2014 Results

Outside there’s lingering snow from last week in the hollow here at Hawksbill Cabin in Stanley, Virginia.  I can’t help but think about our vacation last May - I wrote that month’s wrap up out on the back porch of the John Dougherty House, in Mendocino, CA – there’s a photo to the right – for the heck of it I’m throwing in a view of the highlands and the beach there too.

Still, month in and month out, Rescue My IRA churns on, and November was no different.  My cash results weren’t where I wanted them to be – I paid to unwind several positions and ended up buying to close in the money options in exchange for stock gains, but the market took care of me anyhow.  We’ve weathered October's rough seas and then some, and the account value achieved a new high.

Meanwhile, here is the monthly summary of Rescue My IRA statistics for November, based on the market close on the 28th. 

Account Status:

·         Total Account Value, 11/28/2014 Market Close:  $ 168,107.47, that’s up from the October close of 166,725.42)

·         Total Cash Reserve, 11/28/2014 Market Close:  $43,606.47

·         Core Stock Positions (as of 11/28/2014):  BA (100 shares), CNP (400 shares), COP (100 shares), CRUS (400 shares), DIS (100 shares), EMC (400 shares), FB (100 shares), GE (300 shares), GM (300 shares), KRFT (100 shares), PFE (300 shares), QCOM (100 shares), T ( 300 shares), WIN (800 shares)

Performance Metrics:

·         Option Premiums Collected (net, month of September):  -$1,630.39 (-1.06%)

·         Capital Gains Collected (net, month of September):  $2,030.60 (1.30%)

·         Dividends Collected (recognized on the ex-date): $ 288.00 (0.19%)

·         Interest on Cash Reserve: $0.30

·         Total, Absolute Return:  $661.51 (0.43% absolute return, annualized return

5.19%) 

Next Month To-dos:

In December, there are five positions with covered calls that will expire:  CRUS, EMC, GM, KRFT, and T.  All but CRUS are in the money, and that one is only barely out of the money.  I will probably roll that one out and up – it is a position that will currently show a loss on the shares if I don’t; I think I may go as far out as March on the adjustment.  I’ll also take a loss on the price for KRFT, but overall there’s a positive return on that sluggish trade and it seems like a good time to divest it.

Assuming that I am successful on the CRUS roll out, I’ll record $406.00 in stock gains for the month, an absolute return of 0.26% - about a quarter of the way to my monthly goal of 1% in the Rescue My IRA account. 

The dividends forecast for December is a good one as well.  There are five ex-dividend dates coming up for DIS, EMC, GE, GM, and WIN.  The total dividends payment is $510, or 0.33%; only GM is in the money out of this group.  If GM is assigned, the dividend count reduces by $90, and the percent return goes down to 0.27%.

Between the share gains and dividends, I stand to bring in about half a percent return on the account – my goal is one percent, so obviously there is work to do in order to accomplish that.

Speaking of strategy, I had planned to take my cash reserve down to 20% overall on the account value – that would be around $34,000 - in order to take advantage of what I expect to be continued gains in the market over the next few months.  However, because of all the unwind trades I ended up with more cash than planned - more than $40,000, in fact.  I have some work to do to find some suitable stocks to get the excess cash invested.

I’m happy with where the account sits here in November – I’ll stay the course with the covered call strategy.  Here’s to happy trading for my readers!