Tuesday, May 5, 2015

Rescue My IRA: April 2015 Results

Here’s the monthly report for Rescue My IRA: while we’ve had some decent market volatility this account is up by nearly 3% for the year.  My side venture of Hawksbill Hop Yards is still keeping me busy (you can read about the farm here:    

My strategy of reducing cash reserves to between 15-20% of the account value seems to be working out, although I have to admit I picked a few stocks I am not entirely happy with – I compromised my selection criteria on one or two of them so I will be riding these out.  However, there are 14 positions in the portfolio as of April 30, so the risk from those few is spread out over some higher quality positions.

In April, the bulk of the returns - $1,860 – was produced from stock gains as four positions were either called away or unwound:  FB, HAL, JPM, and SPY.  Covered call premiums were at about breakeven, mainly due to the position unwinds that generated the offsetting gains above, and it was a good month for collecting dividends – Rescue My IRA earned just over $400 through this category of income. 

Here is a summary of benchmark results for April 2015- as always, these amounts are net of commissions and fees.

Account Status:
·         Total Account Value, 4/30/2015 Market Close:  $172,428.51 – up from the March ending balance of $169,187.41.
·         Total Cash Reserve, 4/30/2015 Market Close:  $26,314.51 – still tracking in the 15-20% range.
·         Core Stock Positions (as of 4/30/2015):  ABBV (100 shares), AAPL (100 shares), CA (300 shares), COP (100 shares), EMC (400 shares), F (500 shares), FCX (500 shares), GE (400 shares), NUE (200 shares), PPL (300 shares), QCOM (100 shares), SPY (100 shares), T (400 shares), TXN (200 shares)

Performance Metrics:
·         Option Premiums Collected (net, month of April):  -$109.14 (-0.07%)
·         Capital Gains Collected (net, month of April):  $1,859.97 (1.11 %)
·         Dividends Collected (recognized on the ex-date): $407.00 (0.24 %)
·         Estimated Interest on Cash Reserve: $0.30
·         Total, Absolute Return:  $2,158.13 (1.29% absolute return, annualized return

Next Month To-dos:

Rescue My IRA begins the month of May with four covered call positions set to expire in May:  AAPL, EMC, FCX, and TXN.  It looks like I am pretty far underwater on EMC and TXN, so I’ll take early action to roll these two out, although I may have to go pretty far into back months for this – possibly July, or worse, October.  We’ll see what we can work out on those, meanwhile, the gains on FCX and AAPL should hold us over.   

The dividend forecast is not as good as April but still not bad:  there are four positions going ex-dividend this month, yielding $315.00.  One of these, AAPL, is in the money with a May expiration, so it’s not likely I’ll be holding this one on the ex-date, reducing the dividend haul to $263.00.

Assuming I can roll out EMC and TXN, the account will have a good month during May, otherwise it will be a breakeven month.  The market seems to be holding forth with steady gains, so I’m content to watch and wait, although I will do a better job of staying true to my stock picking criteria. 

So that’s it for April results.  Until next month, happy trading!

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