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Monday, September 28, 2009

Monday Challenge Project Summary: September 28th, 2009

Previous Challenge Project Balances:

Investing Account Balance: $570.54
Stock / Futures Trading Balance: $1,521.21
Online Savings Balance: $150.30

If you're not sure what the Challenge Project is? The original video explanation 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.

For this week, the $25.00 weekly deposit is being transferred to the Investing Account.

As you will note in the account balances that follow this entry? I am reserving some of the cash that is in the Investing Account in order to Dollar Cost Average positions that I already hold in Coca-Cola (KO) and Johnson and Johnson (JNJ). For example, I'll want at least $60.00 available at any time. If either one of these stocks fall in share price? I will have cash available to purchase more shares, to better average down my cost-basis. Naturally, as time progresses? I will increase the amount of money that I set aside to dollar cost average the positions. If it is $60.00 at the current time? In the future years, this amount may increase to $300.00

As well, in the future, when I make a purchase of a new dividend DRIP stock for the investing account? I will leave some cash in the account past the purchase price, so that if the opportunity arises to dollar cost average the new position, I'll be able to do so.

As I mentioned last week, I have closed the account with ING Savings as I am sick to death of these banks getting themselves in trouble, and then seeking help from debt ridden governments. The money was therefore transferred to the my personal credit union. I now have those funds as straight cash.

Here are the new balances for each of the Challenge Project, after this weeks deposit ...

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $591.82
(YTD cash equity up about 22% Return is about -1.5%)
  • 4.1064 shares of KO (DRIP on)
  • 3.0301 shares of JNJ (DRIP on)
  • Cash: $189.12
-$60.00 of this I reserve to D.C.A. KO
-$60.00 of this I reserve to D.C.A. JNJ
-This leaves $69.12 for cash for new purchases
  • Additional $37.53 available from slush fund
Investing Account Balance Since Inception:

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
Trading Account Balance Since Inception:

Savings Balance: $150.30
(YTD cash equity up about 22.3%. Return on Capital is about 1.49%)
  • $37.53 for a Slush fund / Drawdown Kill Switch fund
  • $75.24 for a Base Savings
  • $37.53 for Emergency Savings
Savings Account Balance Since Inception:

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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