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Monday, December 28, 2009

Monday Challenge Project Summary: December 28, 2009

Previous $500 Challenge Project Balances:

"The Three Sisters":

Investing "Sister" Balance: $773.13
Trading "Sister" Balance: $1,596.21
Interest Bearing "Sister" Balance: $200.30
Total Challenge Project Funds: $2,569.64

Introduction:
The original video explanation of the Challenge Project that began with $500, is to be found here. The Challenge Project is basically a demonstration of a model that anyone could at least follow along with on a weekly basis. It is my attempt without cost, to help out the 'little guy' when it comes to investing and trading by providing an example, a 'model' as it were ... as run by myself as a professional trader with real money, in sub-accounts that I own; following my own three sisters portfolio management system; albeit modified a bit to operate with low funds. From time to time, I provide snapshots of the broker statements.

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 Challenge Project INVESTING Account.

I stated in previous "$500 Challenge Project" entries, that the focus was going to begin to turn towards the trading and savings accounts. But before we closed 2009, I wanted rule No. 2 to be applied towards the investing account. Call it "one last hurray" for the investing account, before the focus turns towards the trading and savings accounts, for the first quarter of 2010.

In addition, from this point forward, each time I contribute towards the investing account, I will raise the amount that I am reserving for future dollar cost average purchases on each stock by $2.00.

This marks the last "Challenge Project Entry" for 2009. The main goal in this phase, has been increasing the account balances, the actual capital. I've said that a million times. At the time of this writing, the Investing account balance is up 67.5%, the Trading account balance is up by 57.5%, and the Savings Account is up by 62.75%. So I'd say that the "goal" was adequately accomplished. Soon enough, all of those 'annual percentage gain' numbers will reset to zero, as we enter 2010.

Here are the new balances for each of the Challenge Project ...

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $803.81
(YTD cash and equity up about 65.75% Return is 3.90%)
  • 4.1665 shares of KO (DRIP on)
  • 3.0779 shares of JNJ (DRIP on)
  • 2 shares of MCD (DRIP is now OFF)
  • Cash: $238.51
-$62.00 of this cash I reserve to D.C.A. KO
-$62.00 of this cash I reserve to D.C.A. JNJ
-$82.00 of this cash I reserve to D.C.A. MCD
-This leaves $32.51 cash available
  • Additional $50.00 available from slush fund
Investing Account Balance Since Inception
(Can be Enlarged):


Stock / Futures Trading Balance: $1,596.21
(YTD cash equity up about 57.5%. Return on Capital is about 2%)
  • 3% risk tolerance gives us $47.88 to risk per trade
  • Additional $50.00 available from drawdown / slush fund
Trading Account Balance Since Inception:
(Can Be Enlarged)


Savings Balance: $200.30
(YTD cash equity up about 62.75%. Return on Capital is about 0.25%)
  • $50.00 for a Slush fund / Drawdown Kill Switch fund
  • $100.30 for a Base Savings
  • $50.00 for Emergency Savings
Savings Account Balance Since Inception:
(Can Be Enlarged)



Total $500 Challenge Project Balance: $2,600.32

Total Challenge Account Growth Since Inception:
(Can Be Enlarged)



We'll be back to the Challenge Project next Monday, in 2010 ...

* * *

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 over 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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