March was a great month for me, but based on how well all equity sectors did that didn’t take a lot of brainwork from me so I’ll keep my ego in check. I ended the month with a combined balance of $108,043.97 ($96,935.22 with IB and $11,108.75 with AMTD). This gives me another month of moving higher from the previous month’s end. I finished February with a balance of $103,076.06 and I added $1,500 to my IB account on March 5th which means my total increase for the month was $4,967.91. My realized profit for March was $1,353.92 which was brought down by my loss on my CSCO option spread that I held too long.
With my IB account (the one I use for stocks and options positions) getting closer to the $100k mark I’m starting to think about turning my new deposits towards my TD Ameritrade account (cash and long term bond positions). I’d like to push that account up to 20% of my overall portfolio. Don’t look now, but I’m growing up and creating a proper asset allocation for myself. I know I should’ve already moved more over to the debt side of my allocation, but I’m enjoying this equity bull market so much I don’t want to miss out, but if I don’t make the move sooner than later I’ll be setting myself up for another fall that I could’ve softened with a better allocation.
Once I get up to 20% in bonds I might even consider opening some long term holds in that account in ETFs like SPY, QQQQ, IWM, etc. The reason for that is I’m starting to gain more clients who want me to actively manage their accounts and until my AT&T contract is over (hopefully not for another 17 months at least) I can see me running short of time as I focus on client accounts before my own. If that’s the case, it’ll be a good problem to have because it will mean my business is growing and will be a full time job for me when I need it.
I’m slightly ahead of most of the major indices for the year to date and continue to lag behind for the trailing 12 months due to my low risk approach last year. My only regret is that I didn’t allocate more towards small cap stocks. One of the biggest differences for me from the past year is that based on my current short option positions I’d be 100% invested if all of my options were assigned. A few of the underlying stocks from my options have as much as a 10% cushion before I’d even break even which gives me a really good reduction of risk if we get a little correction. I’m considering closing some of these positions that don’t have much value left and adding new positions, but I’m in no rush still. Once the latest employment data comes out on Friday and earnings season kicks in again soon we’ll see a more definitive direction for where we’re heading. That’s probably when I’ll make a bigger move in either direction.
Here’s exactly how my returns compare to the major indices as of the end of March.
My 1 year return: +27.99%
Year to date (YTD): +6.57%
Annualized returns since 4/8/07 (my blog’s beginning): -8.07%
Deposits for month: $1,500.00 on 3/5/10
According to Morningstar, here’s how I compare to the major indices through 3/31/10:
Dow Jones Return: 1 year +46.93%, YTD +4.82%
S&P 500 Return: 1 year +49.77%, YTD +5.39%
NASDAQ Composite Return: 1 year +56.87%, YTD +5.68%
Russell 2000: 1 year +62.76%, YTD +8.85%
S&P Midcap 400: 1 year +64.07%, YTD +9.09%
The VIX ended the month at 17.59 and the VXN ended at 18.32. These levels are close to what they were nearly three years ago. Higher volatility comes and goes. I prefer selling options during periods of higher volatility which produces higher premiums, but on the other hand it’s nice to have my options continue to finish out of the money as their underlying stocks move higher. This has allowed me to slowly increase my exposure with the feeling of a relatively low level of risk.