Month in Review – October 2017

The reason we fund our ROTH IRA’s in August is because:

1) We need to load the same amount of money at the same time for the competition to make any sense, and August is as good a time as any

2) September and October are historically the most volatile months for stocks. So if you have to pick a time to add dry powder, August is probably as good as it gets…right?

Welp…here we are and the last two months have been pretty boring.

Oh well. The portfolio keeps cranking out dividends and passive income while we wait and that’s nice. Also the imaginary cost basis bucks are piling up.

October is already over and it feels like 2017 is flying by. Let’s talk about it!

Portfolio Summary

Metric

End of October 2017

End of September 2017

Total Invested

$398,342.86

$393,781.95

Market Value of Total Invested

$418,133.61

$413,582.62

Allocation % – Equity

49.25%

48.26%

Allocation % – Bonds

14.32%

13.81%

Allocation % – “Other”

3.73%

3.83%

Allocation % – Cash

32.21%

33.62%

Income Assets – Invested

$223,673.45

$206,731.09

Income Assets – Market Value

$227,696.52

$212,523.12

Projected Annual Income

$9,852.20

$8,874.50

Invested Yield

4.40%

4.29%

Market Yield

4.33%

4.18%

Stock Purchases

1 stock purchased. It is an addition to an existing position; projected annual income increased by roughly $264.00 based on current dividends.

09/01/17 – CIK: 1,000 shares purchased @ $3.41337/share. This is part of the ongoing construction of my CEF portfolio and doubled the 1,000 shares I already owned in the inherited IRA. 

Choose the Form of the Destructor

There was no UVXY activity this month. My current open position is a LEAPS put with a $31 strike. 

Last month, I said I would probably close the position, but UVXY fell off an absolute cliff, and the put premiums were actually responding in the way you’d expect. If I mark it to market, the trade is running about an 80% annualized return. I’m not sure if it’s going to get a lot better than that.

I should probably take my profits on this one.

All UVXY put trades are documented in the “UVXY” tab of the Dividend Income Tracker, and all future trades will also be documented on the twitter.

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 here at the mothership and has been updated.

Total investment income of $643.82 with a taxable total of $11.59. We’ll call it 6 “pay days” with 26 individual payments received.

Options premiums represent $199.98 of that total.

Capital gains made up $0.00.

Which leaves $432.25 of actual bona fide dividends (and $11.59 of P2P lending interest).

Lending Club

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.

One additional loan was charged off this month, bringing the number of bad loans we’ve invested in to a total of 8 out of 194 or ~4.12%.

Month over month the late note situation has stabilized a bit but is still trending in the wrong direction. The total number of “questionable” notes may have remained at 8, but since one loan defaulted that means we have a new one in the grace period.

Oh well. Hopefully I’m helping all these people to get out of usurious credit card debt.

Month

In Grace Period

Late (16 -30 days)

Late (31 – 120 days)

Charged Off (aggregate)

January 2017

1

1

4

1

February 2017

4

0

2

2

March 2017

2

0

2

2

April 2017

1

0

2

4

May 2017

0

2

3

4

June 2017

1

0

3

5

July 2017

1

1

2

6

August 2017

1

1

2

7

September 2017

4

0

4

7

October 2017

4

1

3

8

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

Lending club’s algorithm is suggesting I should write down $75.27 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.

That is down slightly from what it suggested last month ($86.11).

I started a new experiment buying late notes on the secondary market at a discount. I’m still figuring out the details of that strategy. For now I am keeping all that separate from these monthly summaries. I have some income and some losses, depending on how you want to look at it, but it is going to be a separate deal for the time being.

Here’s the latest on all that.

Comparisons

Month over month, investment income was down -43% compared to $1,133.09 in September. Year over year is basically meaningless, since October 2016 was when I finally recognized my paper loss in AUY for a NEGATIVE income of ($1524).

All in all it was kind of a slow month.

Raises

None of the dividends received this month represented a raise over previous distributions.

So that was October.

It might not look obvious, but I had fun…how about you?

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