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Monday, August 24, 2009

Monday Challenge Project Summary: August 24, 2009

Previous Challenge Project Balances:

Investing Account Balance: $481.73
Stock / Futures Trading Balance: $1,521.21
Online Savings Balance: $125.15

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

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

The investing account continues to hold on to the SPY hedge option. I will be adding equity to this account in the near future. As I stated last week, I want to begin focusing on increasing the capital in the Challenge Investing Account. But ... not this week.

For this week, the $25.00 weekly deposit is being transferred to the Savings Account. Last week, we sent the $25.00 to the Trading Account in what I termed a "last push for the trading account equity". Consider this weeks deposit a "last push for savings account equity". 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 for both the investing and trading account. Which in turn allows us greater mobility when it comes to investing and trading.

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

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $490.53
(YTD cash equity up about 0.98% Return is about -16.4%)
  • 4.1064 shares of KO
  • 3.0301 shares of JNJ
  • 1 SPY 80 Put - September Hedge
  • Cash: $89.12
  • Additional $37.53 available from slush fund
Stock / Futures Trading Balance: $1,521.21
(YTD cash equity up about 50%. Return on Capital is about 2%)
  • Additional $37.53 available from slush fund
Online Savings Balance: $150.15
(YTD cash equity up about 22%. Return on Capital is about 1.49%)
  • $37.53 for a Slush fund / Drawdown Kill Switch fund
  • $75.09 for a base savings
  • $37.53 for Emergency Savings
We'll be back to the Challenge Project, next Monday ...

* * *

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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