End of the Month Summary – January 2017
With my account in limbo during my transition to a new account, January was a bland month for my investments. That’ll change in February. Still, I managed to pull out a little gain thanks to my only position being Disney (DIS). I started the month by pulling out $75,000 to move to my new individual account. I left DIS in the account in an attempt to cut my loss and possibly even turn it into a profit. So far, it’s working, but I still have two and a half weeks to go.
I ended January with a Net Liquidation Value (NLV) of $17,884.22 and a Net Asset Value (NAV) of $17,883.79 according to Interactive Brokers (IB) after finishing December with an NLV of $92,244.41 and withdrawing $75,000. The difference in month end values, minus my withdrawal, gave me a gain of $639.81 (~3.71%) on paper for January and a realized gain of $0 since I had no closing trades. I received $78 in dividends from my DIS shares in January. Quicken reported that I have an account value of $17,883.78, a penny below what IB says I have. I didn’t bother to make an adjustment since I hope to have my DIS covered call finish in the money so I can sell my shares and move on. Once I’ve liquidated my DIS shares and covered call, I expect the penny to round out again.
I am 60.52% invested in this account. That’s actually moot since my $100,000 check for my new account is available tomorrow and I can start rebuilding properly again, but don’t see me starting too aggressively since stocks are looking wobbly recently. I was hoping for more of a correction by the time my cash got to my new IB account, but I’ll be fairly patient.
This is my asset allocation in my IB account as of the end of January:
- Large-cap ETF: 0.0%
- Mid-Cap ETFs: 0.0%
- Small-Cap ETF: 0.0%
- International: 0.0%
- Individual Stocks & Other Sector ETFs: 61.87%
- Bonds: 0.0%
- Short ETFs: 0.0%
According to Morningstar, here’s how I compare to the major indexes (including dividends) through the month’s last trading day, January 31, 2017:
- Dow Jones Return: YTD change +0.62%, 1-year change +23.89%
- S&P 500 Return: YTD change +1.90%, 1-year change +20.04%
- NASDAQ Composite Return: YTD change +4.30%, 1-year change +21.69%
- Russell 2000: YTD change +0.39%, 1-year change +33.53%
- S&P Midcap 400: YTD change +1.68%, 1-year change +30.17%
These are my returns according to Quicken through January 31, 2016:
- YTD Return: +3.92%
- 1 Year Return: +9.89% (this is skewed from my TLT short position last year)
- Average Annual (not cumulative) Return since November 18, 2009 (when I opened my IB account): +8.18%
The VIX ended the month at 11.99 and the VXN ended at 16.68. The VIX is 2.05 points lower than at the end of December and the VXN is 2.39 points lower than at the end of December. Both volatility measures finished January below the highs where they started the month and off their lows from January 27. Volatility is much lower than its average over the past couple of years and could be showing some complacency, which often manifests into at least a small correction. It might be a better time to buy puts than sell them.
The CBOE SKEW Index finished January at 138.08, 10.82 points higher than the end of December. The SKEW rose to a monthly high of 146.33 on January 20, as traders braced for a post-inauguration sell-off that hasn’t come to fruition yet. That was up from the low of 121.84 on January 10. We could still see a sell-off, but the big money movers of the SKEW don’t seem as worried about it any longer.