I have been dreading writing this post since I already know I screwed up in December. I gave myself very specific rules when it comes to selling short puts and I think my head got a little too big after a ridiculous month in November when it comes to investment income.
My December 2016 Investment Activity
My Undervalued Dividend Growth Stock Purchases
December, like most months, I made my normal $500 purchase plus my option income for the previous month($506):
- On 12/6/2016 I bought 15 Shares of Aflac (AFL) at $68.75 ($1,038.32 purchase).
This added to the 10 shares I already owned.
I also was assigned 100 shares of Smith and Wesson (was SWHC and now is AOBC) and Urban Outfitters (URBN). I will attempt to sell covered calls on these positions until they are called away.
My Investment Income
- I received $96.65 in dividend income (automatically reinvested); and
- I lost an awful $85.44
I went from an awesome $500 month to -$85? That is frustrating, and completely my fault.
Some mistakes that I made:
- I ignored my rule about spreading out the leverage. I had multiple contracts on SWHC (AOBC), URBN, UAA – when in reality they should have been spread out.
- I ignored my rule going out too far. The farther I go out the less I get the benefit of time decay – I have to keep it under 45 days.
- I created an alternative closing schedule that I think is premature. Most of my money is made from the velocity of my trades I will revisit the non-50% exit strategy when the account is bigger
My Current Holdings & Ratios
|Company||Ticker||Shares||Price||Value||Cost Basis||Current Dividend Payout||Current Expected Annual Income||Yield on Cost|
|Community Trust Bankcorp||CTBI||32.132||$48.55||$1,560.01||$38.33||$1.28||$41.13||3.34%|
|CULLEN FROST BANKERS INC||CFR||10.141||$87.77||$890.08||$65.36||$2.16||$21.90||3.30%|
|SONOCO PRODS CO||SON||22.31||$54.00||$1,204.74||$36.91||$1.48||$33.02||4.01%|
|PRICE T ROWE GROUP||TROW||35.496||$75.62||$2,684.21||$69.18||$2.16||$76.67||3.12%|
|UNITED TECHNOLOGIES CORP||UTX||20.249||$112.55||$2,279.02||$87.72||$2.64||$53.46||3.01%|
The value of the account month over month is not all that important to me. I am really interested in two numbers, the amount of shares and the expected annual income. Both those numbers should increase month over month, otherwise something is wrong. I went from 263 shares to 280 shares this month and an expected income of $471 to $501.