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Monday, February 22, 2010

Monday Challenge Project Summary: February 22, 2010

Previous $500 Challenge Project Balances:

"The Three Sisters":

Investing "Sister" Balance: $803.73
Trading "Sister" Balance: $1,654.23
Interest Bearing "Sister" Balance: $300.30
Total Challenge Project Funds: $2,758.26

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.

Thus far, we have increased the "Savings Sister" account of the Challenge Project by $125.00. I could say that we've increase this account by "62%", but come on ... it's 62% that was built on the $200.00 that we started off with at the beginning of the year. So let's be a little realistic. Two months into 2010, and we've increased the "Savings Sister" account by $125.00.

The advantage there, is not the $125.00, but that we've increased the "sidepocket" fund, or the 'drawdown kill switch / slush fund' up to $81.00. We've thus increased our 'breathing room' for the trading account. The trading account could conceivably have two scalping losses before the 'kill switch' would be hit.

On February 18th, Scott left an interesting comment that has a direct relation on the "Challenge Project". It reads:

"I contacted ThinkorSwim and they said that Pension - their clearing firm does not buy partial shares.

I have my IRA account with TOS and was turning on DRIP for some select stocks I own and noticed I received cash for my position in PG.

This stock is in the low 60's currently and I do not own enough shares for a quarterly dividend to equal one share.

Have you mentioned or experienced this?

Thanks again!"

I was going to comment on this on Sunday, but I got caught up with my newsletter, which turned out to be almost 9 pages, as I had a lot to say on the economic front. So I didn't get to this yesterday as I had some other emails that I wanted to get through. But I want to say that I think I'm going to have a vlog entry on this tomorrow, so be watching for it.

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

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $818.37
(YTD cash and equity is up +2.4 % Return is +1.39% )
  • 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 $81.00 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 $81.00 available from drawdown / slush fund
Trading Account Balance Since Inception:
(Can Be Enlarged)

Savings Balance: $325.30
(YTD cash equity up about 62.45 % Return on Capital is 0 %)
  • $81.00 for a Slush fund / Drawdown Kill Switch fund
  • $163.30 for a Base Savings
  • $81.00 for Emergency Savings
Savings Account Balance Since Inception:
(Can Be Enlarged)

Total $500 Challenge Project Balance: $2,797.90

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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