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Monday, March 15, 2010

Monday Challenge Project Summary: March 15, 2010

Previous $500 Challenge Project Balances:

"The Three Sisters":

Investing "Sister" Balance: $811.67
Trading "Sister" Balance: $1,690.30
Interest Bearing "Sister" Balance: $350.30
Total Challenge Project Funds: $2,852.27

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 SAVING Account.

We are entering the home stretch. Just a few more additions to the "savings sister" account, and we'll be in a better position.

What exactly does 'better position' mean? Once again, this refers to how many trades we can take in the "Trading Sister" account before the drawdown "kill switch" is hit. If the "savings sister" account has about $100 apportioned for the side-pocket "kill switch" slush fund, then that allows for about 3 consecutive scalping losses in terms of trades.

As well, it's important to note that we received more partial shares for our Johnson & Johnson (JNJ) holdings, as the dividend showed up in the accounts last Tuesday.

Mid-Day Edit: Oh, and $1.10 showed up today for the McDonalds (MCD) dividend. I'm transferring this $1.10 to the trading "sister" account.

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

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $810.35
(YTD cash and equity is up +1.4% Return is +0.16% )
  • 5.1665 shares of KO (DRIP on)
  • 3.1014 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 $93.00 available from slush fund
Investing Account Balance Since Inception
(Can be Enlarged):


Stock / Futures Trading Balance: $1,690.30
(YTD cash and equity up about 5.89 % Return on Capital is 1.15 %)
  • 2% risk tolerance gives us $33.80 to risk per trade
  • 3% risk tolerance gives us $50.70 to risk per trade
  • Additional $93.00 available from drawdown / slush fund
Trading Account Balance Since Inception:
(Can Be Enlarged)


Savings Balance: $375.30
(YTD cash equity up about 87.36 % Return on Capital is 0 %)
  • $93.00 for a Slush fund / Drawdown Kill Switch fund
  • $189.30 for a Base Savings
  • $93.00 for Emergency Savings
Savings Account Balance Since Inception:
(Can Be Enlarged)


(Yes, I figured out a way to generate a graph for the history of the Savings account from Quicken)

Total $500 Challenge Project Balance: $2,875.95

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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