I kept my streak alive in July with another month of gains. After finishing June 2009 with an account balance of $78,417.54 I stayed far more risk averse than I should have in hind sight. I’m still not jumping in to this rally in full belief that we can’t have another leg down, but do realize that I could be more invested than I am right now without taking on an insane amount of risk. I finished July with an account balance of $80,229.80 according to TD Ameritrade and $80,337.19 according to Quicken. I barely missed the goal I set for myself last month, but am pretty happy with it considering I grew my account by $1,812.26 and only took very small amounts of risk. I actually could’ve hit it if I didn’t panic and buy back my IWM naked puts early. That’s how close I was.
Depending on my job situation in August I could have more time to trade and study more for the Series 65 exam unless I can land a new job quickly enough or my current job gets extended longer than I was told it would be as of a few weeks ago. Sticking with the same high bar of trying to finish the year with a 30% gain, I’m setting my August goal to increase my account balance by $2,005.75 to $82,235.55. As always, my true goal is to beat the indices. My logic is that if I’m not beating the indices I should just be invested with a buy and hold strategy in index ETFs.
Here’s how I compare to the major indices. I continue to lag the major indices for the past 12 months, but I’m ahead for the year to date on the Dow Jones, Russell 2000 and S&P 500. I’m virtually even with the Midcap 400, but I’m lagging the NASDAQ Comp. Compared to how I’ve been up until this month you can really see what I’ve missed out on by being overly conservative. I’m expecting to get a solid pull back in the markets off the resistance the charts are showing and that could move me further ahead for the year to date and give me a better re-entry point. If not, the DJIA, RUT and SPX will continue to catch up with me. August 2008 was a good month for me, so I’ll have to do something good this month to get my 12 month returns to improve, but then we hit my worst three month period ever, September though November 2008. That’ll be my big catch up period, at least the way I plan it.
- My 12 month Return: -31.09%
- Year to date (YTD): +17.21%
- Annualized return since 4/8/07 (blog’s beginning): -18.28%
- Deposits for month: None for July
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: -16.62% 1 year, +6.56% YTD
- NASDAQ Composite Return: -14.92% 1 year, +25.46% YTD
- Russell 2000: -20.72% 1 year, +12.53% YTD
- S&P 500 Return: -19.96% 1 year, +10.97% YTD
- S&P Midcap 400: -20.25% 1 year, +17.95 YTD
The VIX ended the month at 25.81 and the VXN ended at 26.16. They were both lower earlier in the month, but still not showing a lot of fear in the markets. Option premiums are lower than a few months ago which makes me wonder if I should be buying some puts and calls here instead of selling. A big move down from here will cause a spike in volatility while also increasing intrinsic value of puts. On the other hand, if the markets continue their rise, those options would expire worthless. After the best July in 12 years, I don’t expect a record August to follow, but I’ve been wrong more than once in the past.