June was a decent month for me. I gained $1,178.78 not counting the deposit I made. That’s an approximate gain of 1.5% since the end of May. I didn’t hit my goal, but did end with a higher balance than I started with and that’s very important, especially since June 2008 was a down month for me. Looking at my 12 month return, I replaced a losing month with a winning month. I ended June with an account balance of $78,417.54 according to TD Ameritrade and $78,617.34 according to Quicken.
My July goal is to increase my account value by $1,960.44 to $80,377.98. I come to that number by taking 30% of my balance at June’s closing and dividing it by 12 months and adding it back to my June closing balance. Nothing high tech here. As always I’m aiming for a 30% annualized return, but if I can stay ahead of the major indices for the year I’ll be happy. I won’t be making a deposit to this account in July due to some other expenses our household is taking for the month and an increasing fear of layoffs coming before the end of the summer to my department. Hopefully I’ll be back to regular deposits again in September. Since I’m not putting all of my money to work right now it doesn’t actually matter for now.
To grow my account by $1,960 I need to make eight trades where I make $245 per trade. I came up with eight trades based on my average trade size being $10,000. To avoid going on margin I’m dividing $80k by $10k. It’s a nice round number to work with and doesn’t take into account that some trades will likely end in a loss and none will lose full value by the end of July. Anyway, it’s a way to set a goal using a very simple thought process. I still have $882 left in time value on the options I’m already short set to expire in July. So, that should help balance out some of the August options I sell that will still have value at the end of July.
That’s a nice plan, but I’m not sure if I’ll be trading that much in the near future. I’m still studying for the series 65 exam and apparently need to spend more time focusing on the job rather than investing and blogging. July and August will be nerve racking months for our household I’m sure. I’ve moved my IRA and my wife’s IRA mainly to ETFs. I might return to a model more like that hear to let me continue to stay invested while I focus on keeping my job.
Here’s how I compare to the major indices. I’m lagging them all from a 12 month view, but ahead of all aside from the NASDAQ. Once September, October and November 2008 are off my 12 month view I’ll be back to looking solid.
- My 12 month Return: -36.17%
- Year to date (YTD): +14.50%
- Annualized return since 4/8/07 (blog’s beginning): -15.77%
- Deposits for month: $3,000 on 6/3/09
According to Morningstar, here’s how the major indexes have done over the past 12 months and the year to date (YTD):
- Dow Jones Return: -23.00% 1 year, -2.01% YTD
- NASDAQ Composite Return: -19.97% 1 year, +16.36% YTD
- Russell 2000: -25.01% 1 year, +2.64% YTD
- S&P 500 Return: -26.21% 1 year, +3.16% YTD
- S&P Midcap 400: -28.02% 1 year, +8.47YTD
The VIX ended the month at 26.35 and the VXN ended at 26.69. Those two aren’t typically that close, but it shows what a calm has come over the markets with both of them easing lower lately. I think the VIX is too low for the volatility I expect to come back soon. It makes it harder to sell options in a market like this and I’m not convinced of when we’ll see a move enough to make it worth buying options. That leaves me in a position not to trade much, as you may have noticed. I’m sure my opinion will continue to change weekly and I’ll have more trades posted soon.