My account continued to regain value in April even after March’s amazing month of gains. My account value peaked a few thousand dollars higher than I finished, but still am happy to have another solid month in the books. I expect May to help me again, but it will really depend on how bonds move throughout the month.
I ended April with a Net Liquidation Value (NLV) of $87,801.47 and a Net Asset Value (NAV) of $87,562.17 according to Interactive Brokers (IB) after finishing March with an NLV of $84,650.40. That gave me a gain of $3,151.07 (~3.72%) on paper for April and a realized loss for the month of $2,317.26 on only two closing trades. I received $81.62 dividends in April from my MDY shares and deducted it from my realized losses. I also paid $397.86 in short interest, debit interest, and dividends for my TLT short shares. Quicken reported that I have an account value of $87,591.63, the same as IB’s reported NAV after accounting for interest accruals of -$29.46.
While TLT’s influence still dominates my account (which was a good thing again in April), my long positions on DIS, IWM, and MDY all gained ground in April. I keep saying that I’m going to write covered calls on these long shares, but just can’t pull the trigger while it seems there’s decent (not great) upside available. That said, I don’t think I’ll make it through May without bringing in some out of the money premiums. I also plan to close my TLT June ratio call spread before long and will probably do so when TLT heads below $128 again.
If all of my naked puts were assigned, I would be 76.56% invested in this account. I am invested 2.16 percentage points lower than I was at the end of March, but this doesn’t truly represent my exposure because my TLT positions skew my total risk. Even if I wanted to, I couldn’t invest in much more due to IB’s margin limits. I’ll see what else I can get into after I close my TLT options, but it won’t be much as long as I’m short 1,300 shares of TLT.
This is my asset allocation in my IB account as of the end of April:
- Large-cap ETF: 0.0%
- Mid-Cap ETFs: 30.28%
- Small-Cap ETF: 38.39%
- International: 0.0%
- Individual Stocks & Other Sector ETFs: 11.76%
- Bonds: -191.56% (not including my TLT options, just the short shares)
- 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, April 29, 2016:
- Dow Jones Return: YTD change +2.83%, 1-year change +2.25%
- S&P 500 Return: YTD change +1.74%, 1-year change +1.21%
- NASDAQ Composite Return: YTD change -4.63%, 1-year change -3.36%
- Russell 2000: YTD change +0.03%, 1-year change -5.94%
- S&P Midcap 400: YTD change +5.06%, 1-year change -0.94%
These are my returns according to Quicken through April 29, 2016:
- YTD Return: -11.54%
- 1 Year Return: -1.35%
- Average Annual (not cumulative) Return since November 18, 2009 (when I opened my IB account): +7.83%
The VIX ended the month at 15.70 and the VXN ended at 19.30. The VIX is 1.75 points higher than at the end of March and the VXN is 2.45 points higher than at the end of March. I actually like volatility index levels in this range. They don’t show too much fear or complacency and still provide adequate option premiums.
The CBOE SKEW Index finished April at 126.49, 4.46 points above the end of March. The index didn’t waiver too much throughout the month and only peaked a few points higher at 127.40 in the final week before easing off only slightly.