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Monday, August 10, 2009

Monday Challenge Project Summary: August 10, 2009

Previous Challenge Project Balances:

Investing Account Balance: $508.25
Stock / Futures Trading Balance: $1,496.21
Online Savings Balance: $100.15

The original video explanation of the Challenge Project is to be found here.

Some time ago I stated that I may split up Rule No. 2, into weekly segments; or, $25.00 a week. Rule No. 2 states that each month, we can divvy up $100.00 as we wish between the various challenge project accounts.

The investing account continues to hold on to the SPY hedge option. Unless we get some sort of spectacular blowup in equities, that option will probably expire worthless. Though it will have served it's purpose, that of a hedge. I think the option has about 41 days until expiration. I will be adding equity to this account, as I have stated that I would love to have about $700.00 cash in that account come this November. We'll see how that turns out.

For this week, the $25.00 weekly deposit is being transferred to the Savings Account. This will increase both our base savings, our emergency savings (well, it's "sort" of emergency savings. It just is there to prove the point that you should have one). In addition, this increases the amount available for our drawdown kill switch / slush fund for both the investing and trading account. Which in turn allows us greater mobility when it comes to trading as well as investing.

So the account balances, at this point, read as follows:

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $490.58
(YTD equity up about 1.19%. YTD Return is about -17.5%)
  • 4.1064 shares of KO
  • 3.0301 shares of JNJ
  • 1 SPY 80 Put - September Hedge
  • Cash: $89.12
  • Additional $31.28 available from slush fund
Stock / Futures Trading Balance: $1,496.21
(YTD Cash equity up about 47.5%. Return on Capital is about 2%)
  • Additional $31.28 available from slush fund
Online Savings Balance: $125.15
(YTD Cash equity up about 2%. Return on Capital is about 1.49%)
  • $31.28 for a Slush fund / Drawdown Kill Switch fund
  • $62.59 for a base savings
  • $31.28 for Emergency Savings
We'll be back to the Challenge Project, next Monday ...

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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