Monday, February 27, 2012

Monthly Progress Review: February

It is time again for my Monthly Progress Review.  This article will highlight the twelve trades I made in the month of February, as well as the profit (or loss) I received for each trade.  This month I also added to one of my long term dividend holdings because I felt the entry price was right. Hopefully that particular trade encourages some of my devout dividend investor readers.

In other news, my technical analysis has continued to improve, and as a result it has allowed me to be somewhat more aggressive in my active trading.  These 'chart based' trades as I'll call them, have been more profitable than some of my other methods.  Furthermore, (and this is the most exciting improvement for this month I believe) is that I have begun shorting. Overall, another extremely active month for me in terms of buying and selling.  I was proud of several of my trades, and especially disappointed in some of my others. I guess that's the way it goes.

Nonetheless, listed below is a summary of the dividends I received for the month of February in my Dividend Income Portfolio, as well as the profit or loss from my day trading activities:

Dividends Received
I received dividends from four companies this month: Abbott Labs (ABT), Paychex (PAYX), Proctor and Gamble (PG), and Realty Income (O).  Given that I now only hold 6 dividend companies, my monthly distributions of dividends are going to be smaller; something I am comfortable with as long as I can have success in active trading.  Nevertheless, the details of this month's dividend distributions are below:

*ABT - $52.79
*O - $22.30
*PAYX - $47.69
*PG - $46.26

For some reason I did not include the distributions from Pepsi or Anworth Mortgage (listed below) in my January total.  As a result, these dividends were actually paid in January, but I will reflect them now with my February total.  My mistake!

*PEP - $24.25 (received before I exited my position)
*ANH -$39.41

Therefore, since my January update my dividend income total was $232.70

Day Trading Profit/Loss: 
Continuing my effort to disclose my total 'earned' monthly income (excluding my retirement account), listed below are the specific details for my third month of active trading.

*1st trade: Long Colgate (CL) - $382.41 profit
*2nd trade: Long Colgate (CL) - $57.72 loss
*3rd trade: Short Cinncinati Financial (CINF) - $179.75 proft
*4th trade: Short Nucor Steel (NUE) - $59.92
*5th trade: Short Realty Income (O) - still holding; waiting for exit 
*6th trade: Long Proctor and Gamble (PG) - 20 Shares at $63.37 added to Dividend Income Portfolio
*7th trade: Options, Covered Call: PG - $36.04 profit
*8th trade: Options, Covered Call: PAYX - $6.04 profit
*9th trade: Options, Covered Call: ABT - $49.04 profit
*10th trade: Long Proshares Ultrashort QQQ (QID) - still holding; waiting for exit
*11th trade: Options, Covered Call: QID - $225.69 profit
*12th trade: Options, Covered Call: QID - $134.30 cost to close.

I was pretty excited about several of these trades, which I'll briefly discuss now.  First, holding Colgate for strictly dividends would have taken awhile (or a very large portfolio) to earn the amount I was fortunate enough to receive.  In fact, I only held the stock for about 20 minutes and made $382, which was exciting.  Second, shorting CINF and O - these two particular trades were of dividend companies that I have held in the past in my dividend income portfolio (CINF) and one that I continue to hold (O).  At the time I just felt O was priced too high, but I unfortunately shorted it while it was in an uptrend, which has forced me to be stuck for several days.

To conclude this section, for the month of February my Day Trading Profit was $747.07

Total Income (Day Trading and Dividends) for the month: $979.77

In conclusion, I have continued to learn about trading, but still continue to make mistakes as well.  I am very excited about incorporating my short strategy, however, and am looking forward to improving in that area in the future.  Furthermore, I am enjoying learning about Options trading as well.

Finally, despite the success I have had actively trading over these three months: December (~$600), January (~$1200), and now February (~$1000) I am still convinced that dividend growth investing is the safest, and "best," way to make it in the long run. Consequently, I will continue to rebuild my dividend income portfolio with profits generated elsewhere.

That's all for now.  I've updated my 'Progress' Tab to reflect the amounts above.  As always, I appreciate your thoughts and insight and would love to discuss investing with you.

Thanks for reading, 

DivPartisan

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12 comments:

  1. Selling covered calls on dividend stocks can add to your profits and build a portfolio much more quickly than simply holding for dividends.

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  2. Selling covered calls requires you how to handle them when comes tax time. The premiums come into play somehow. It still a good thing to do.

    Do you do trades in a separate account and ,if so, is it done in a taxable or non-taxable account?

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  3. Agreed on the cover calls, just starting doing that myself this month. Like the extra cheddar I'm seeing.

    Also learning to play the put game, get a better entry point, and if it doesn't hit the strike price, you get paid to wait.

    I'm like you, about 70% I keep in divy's, but my "fun money", I like playing the trading "games".

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  4. You've inspired me to start day/swing. I've made $2,500 in the past two weeks. I wonder if it will be this easy in a different market environment. I am guessing not, but I'll enjoy it while it lasts.

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  5. Anonymous,

    Congratulations; those sound like great results. I'm curious as to what you've been trading?

    Be careful though...I recently read somewhere that like 80% of traders lose money!

    Best of luck,

    DivPartisan

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  6. DP - One stock I've been having fun with is SPLS. I bought it around three weeks ago, and on Tues it went up 5%, so I sold with a 7% gain after the three weeks. Then Wed it dropped 10% on what some felt was a mediocre earnings call. So loaded back up on two separate purchases throughout the day. Then today, back up 5%, so I sold it again. And if it is down >5% tomorrow, I will buy back in. LOL I feel Staples is a company I wouldn't mind holding long term. So if I get stuck in it, no biggy. They are due to raise their dividend which should push it up to about 3%.

    And I realize most people fail at this. I'm feel pretty certain my luck won't last forever. But I am placing relatively small(ish) bets on what I consider quality, dividend paying companies. In other words, if I get "stuck" in a position, I won't mind riding it out for a few weeks, months, or even years if need be. There are a couple that I am slightly down on after a few days, but I am more than happy holding them long term. I have been looking to churn these stocks after 1-4 weeks, not necessarily same or next day. It just happens that a bunch of them I have been able to take profits much sooner.

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  7. That is awesome. Keep it up! and stay in touch...

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  8. I am a Brit who mostly invests my personal money in dividend stocks in the US and UK. I have actually owned P&G for a bit over three years, and am overall quite happy with it. I think its the perfect stock for the current environment. Good dividend, in a business that is easy enough to understand. I like companies where I do not have to become an "expert" in whatever they sell. For example, biotech does appear to have a high growth future, but I am just not comfortable buying into a sector where one almost needs to be a doctor or full time analyst to understand it. Always great to see one's personal investments valididated in a blog, I am on dividend blogs a lot and its just great fun to see opinions from people with more expertise than myself.

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  9. This has been a very good month, I take it. You are very close to make it $1,000 as a side income.

    This is better than blogging or anything else. How much time do you spend a month to achieve these results?

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  10. I agree with anonymous, getting 'stuck' with a company that has long term potential is not so bad if you do your homework first. Knowing you never realize losses until u actually sell.

    DP-Acquiring short term profits and investing into long term dividend stocks sounds like a brilliant idea.

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  11. Looks like your day trading is working out quite well for you. To be honest I had some doubts at the beginning but that may just be because I am not familiar with any day trading techniques and don't have the stones to try it. Well Done so far!! Keep it up! I wish I could make close to $1000 extra each month.

    I do like 'Investing Early' comments though. Getting stuck holding a great company really doesn't sound that bad.

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  12. Hello,

    I was just wondering if you would ever reveal your 'secret' to what your low risk approach is to day trading as it seems you are doing considerably well.

    Just out of curiosity how much are you trading with? This is definitely something I would be interested in.

    Also, how do you find the time to day trade? I too am in the military and rarely find time.

    ReplyDelete