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Monday, February 15, 2010

Monday Challenge Project Summary: February 15, 2010

Previous $500 Challenge Project Balances:

"The Three Sisters":

Investing "Sister" Balance: $804.25
Trading "Sister" Balance: $1,654.23
Interest Bearing "Sister" Balance: $275.30
Total Challenge Project Funds: $2,715.82

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 SAVINGS Account.

The biggest move on the part of the Challenge Project last week, was the purchase of another share of Coca-Cola (KO) at $53.90. Now as of today's date, I have not transferred via an ACAT, the 4.1665 shares of Coca-Cola (KO) away from the Sharebuilder account, to the new ThinkorSwim account. And I really want to hold off on doing that, until I'm showing a decent profit margin on the Coca-Cola (KO) holdings. So I now have 4.1665 shares at Sharebuilder, and 1 share at the investing account at ThinkorSwim.

As it is, I'm done with Coca-Cola (KO) now here for a while. Naturally, the DRIP plan is on with my broker (I had to contact ThinkorSwim support via email to have those dividends reinvested). I'm too heavily weighted in the Challenge Project towards that stock. It should also be noted that any cash that I add to the Challenge Project Investing Account, will be attributed to the cash that I am reserving to further D.C.A. Coca-Cola (KO) down the road. But as far as further purchases ... I am going to concentrate on building up the shares of the other stocks being held by the Challenge Project Investing Account, as well as other cash.

This weeks application of rule no. two is applied once again to the savings "sister" account. Thus, the slush fund that acts as a "sidepocket" to the other accounts, continues to grow,as does the base savings as well as the emergency savings. With growth of that slush fund, further trading and investing is 'buttressed' and supported. As I look over the balances? I find it interesting to note that there is now more cash reserved as a "base" savings, than the entire Investing Account had when I began the "Challenge Project".

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

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $803.73
(YTD cash and equity is up +0.58 % Return is -0.47% )
  • 5.1665 shares of KO (DRIP on)
  • 3.0779 shares of JNJ (DRIP on)
  • 2 shares of MCD (DRIP is now OFF)
  • Cash: $204.61
-$5.10 of this cash I reserve to D.C.A. KO
-$64.00 of this cash I reserve to D.C.A. JNJ
-$84.00 of this cash I reserve to D.C.A. MCD
-This leaves $51.51 cash available
  • Additional $75.00 available from slush fund
Investing Account Balance Since Inception
(Can be Enlarged):

Stock / Futures Trading Balance: $1,654.23
(YTD cash and equity up about 3.64 % Return on Capital is 0.5 %)
  • 3% risk tolerance gives us $49.62 to risk per trade
  • Additional $75.00 available from drawdown / slush fund
Trading Account Balance Since Inception:
(Can Be Enlarged)

Savings Balance: $300.30
(YTD cash equity up about 50 % Return on Capital is 0 %)
  • $75.00 for a Slush fund / Drawdown Kill Switch fund
  • $150.30 for a Base Savings
  • $75.00 for Emergency Savings
Savings Account Balance Since Inception:
(Can Be Enlarged)

Total $500 Challenge Project Balance: $2,758.26

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

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 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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