DGI Adventure 05-01-2017 Month in Review – April 2017

Tax month! We filed for an extension because we temporarily lost some stuff during the move and just didn’t feel like dealing with it. We paid estimated taxes though. Taxes suck.

Fortunately most of our income producing investments are in tax-advantaged accounts.

I didn’t write any posts in April because I’m a horrible blogger. I’m sorry dear readers. I don’t have much of an excuse other than I’m settling into a new job, and I’m probably spending too many hours at it.

Anyway here’s what happened in April.

Portfolio Summary

Stock Purchases

4 stocks purchased. And I didn’t write individual posts about any of them because I’m a horrible blogger.

All are additions to existing positions; projected annual income increased by $446.00 based on current dividends.

04/07/17 – CSCO: 100 shares purchased @ $34.00/share. This was the result of a put option assignment. The original option was sold on 3/20/16, and I didn’t write about it because I’m a horrible blogger. Sorry.

Annual projected income is increased by $116.00/year based on the projected annual dividend of $1.16/share.

4/10/17 – BLW: 300 shares purchased @ $6.23/share. Believe it or not I’m continuing to build my CEF portfolio. The goal is still to cover the annual RMD in the beneficiary account using closed end bond funds. I’m about halfway there after this month’s purchases. Everybody makes a big deal about how bond prices are going to crash because interest rates are going to go up. I’ve been waiting over a year and am getting a little impatient.

Annual projected income is increased by $95.4/year based on the projected annual dividend of $0.318132/share.

4/10/17 – BKT: 150 shares purchased @ $15.69/share. More CEF portfolio building. Bonds are boring, what can I say?

Annual projected income is increased by $156.60/year based on the projected annual dividend of $1.044/share.

4/10/17 – DSU: 100 shares purchased @ $11.61/share. The last of the CEF purchases this month. All three of these were going ex-div on 4/11 so I decided to pick some up.

Annual projected income is increased by $78/year based on the projected annual dividend of $0.78/share.

I was inactive with my UVXY puts. My previous position, which are still open, are:

2 contracts of the UVXY 18JAN19 15.00 P (bought 3/24/17 for $9.40793/share)

I have no way of projecting what kind of income these trades will generate, but I am pretty confident they will be positive. The positions I liquidated in march, netted a ~21% and ~46% annualized return.

All UVXY put trades are documented in the “UVXY” tab of the Dividend Income Tracker.

For the uninitiated, I am shorting UVXY because it is the worst ETF ever. I use long put positions so I can avoid the use of margin and do these trades in tax-advantaged accounts.

Additional exploits can be found here, here and here.

Pay Days and Raises

Dividend Income Tracker is published back at the mothership and has been updated.

Total investment income of $647.42 with a taxable total of -$16.33. We’ll call it 12 “pay days” with 29 individual payments received.

Options premiums represent $318.86 of that total.

There were no capital gains realized.

Which leaves $344.89 of actual bona fide dividends (and $-16.33 of P2P lending interest).

Pretty even split. This is a dividend blog after all!

Lending club income is aggregated into a single income record for simplicity’s sake. It actually arrives as a lot of small payments over the course of the month. Two more loans were charged off this month which is why the monthly income total was negative. In the course of the month the two loans that were in the grace period managed to fall into the 31-120 days late category. That must mean they’re just barely over 31 days late. Presumably I shouldn’t have any more charge offs for at least a couple more months. Also not too many troublemakers in the pipeline.

This should be fun to track. This table will grow with each monthly update.

Lending club’s algorithm has suggested I write down $36.91 worth of principal for the loans that are late or in the grace period, but as the eternal optimist, I’m going to continue to wait until the loans are actually charged off to recognize the loss.

Last month the algorithm suggested I write off $62.80. The difference as I’m learning is not the number of loans in each category but the severity of the issue. So last month we had 2 VERY late loans that evidently were about to get charged off. This month we have 2 loans in the same “category” but they’re obviously not as late, so there’s a lower adjustment.

Comparisons

Month over month, investment income was down from $1,123.47 or -42.37%.

Year over year on the other hand represents a bit of a bump. In April of 2016 I earned $585.52 in passive income. This month represents a 9.56% increase over that total.

Pretty soon I will have been doing the whole dividend investment boosted by options trading thing for a whole year. The YoY totals are going to tighten up a bit.

Raises

One of the dividend distributions received represented a raise:

WMT paid $0.51/share compared to $0.50/share in the previous quarter. That represents a 2.0% increase which is pretty sad. Shares closed Friday at $75.18. With a quick and dirty DDM analysis (single stage, 10% discount), WMT would need a 7.3% DGR for the current share price to be “fair”. I have an open call contract with a $74 strike and a May08 expiration against the WMT shares in the inherited IRA. The value might be a bit stretched right now.

The CSCO dividend also represented an increase, but since I didn’t own shares previously I don’t count it here in this section. It was a good one too: $0.29 vs $0.26 which is 11.5%

I closed this article last month with this statement:

Here’s looking forward to an interesting April

It wasn’t very interesting, but that’s okay. Is it time to “sell in May and go away”? I doubt it, but we’ll find out.

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