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Monday, June 14, 2010

Monday Challenge Project Summary: June 14, 2010

Previous $500 Challenge Project Balances:

"The Three Sisters":

Investing "Sister" Balance: $768.32
Trading "Sister" Balance: $1,869.63
Interest Bearing "Sister" Balance: $425.30

Total Challenge Project Funds: $3,063.25


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. We 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 TRADING Account.

Trading Account:
Oh ... so ... close.

We break into the next 'phase' for the Trading account (From the 'tiny account' phase, to the 'very small account' phase) at $1,901.00. We're almost there.

And as we are getting ready to break into this region on our trading account, there's no way I'm going to take a trade. One more application of rule no. two to the trading account, and we'd be there. A trade now risks a loss. A loss would increase the amount of time necessary to cross into this new 'plateau' of account size.

Sorta stinks too, because there is a nice, low risk, assymetrical-risk trade that I'm looking at for myself ...

Investing Account:
As I mentioned last week, we're in a time period that we have to be prepared for account drawdown.

The beautiful thing about the Challenge Project overall? Is that we are now approaching (we're not there yet) to a level where I will not have to ignore two accounts in a quarter, just to focus on the account that needs help with rule no. two.

In other words ... the "foundation" is close to being constructed.

So while I will have deposits towards the 'investing account' next quarter? We'll also be able to spread rule no. two to the savings and trading accounts, almost equally.

Again ... the "foundation" is close to being constructed for the Challenge Project.

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

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $772.98
(YTD the account is -3.272% YTD Return is about -4.462% Continuing Yield is approximately +6.96% in dividends and additional shares of stock)
  • 6.1998 shares of KO (DRIP on for 4.1998 shares)
  • 5.1014 shares of JNJ (DRIP on for 3.1014 shares)
  • Cash: $154.53
-$3.73 of this cash I reserve to D.C.A. KO
-$13.86 of this cash I reserve to D.C.A. JNJ
-This leaves $136.94 cash available
  • Additional $106.00 available from slush fund
Investing Account Balance Since Inception
(Can be Enlarged):


Stock / Futures Trading Balance: $1,894.63
( YTD cash contributions, equity and return up about 18.7 % )
  • 2% risk tolerance gives us $37.89 'at risk' levels
  • 3% risk tolerance gives us $56.83 'at risk' levels
  • Additional $106.00 available from drawdown / slush fund
Trading Account Balance Since Inception:
(Can Be Enlarged)


Savings Balance: $425.30
(YTD cash equity up about 112.5 % Return on Capital is 0 %)
  • $106.00 for a Slush fund / Drawdown Kill Switch fund
  • $213.30 for a Base Savings
  • $106.00 for Emergency Savings
Savings Account Balance Since Inception:
(Can Be Enlarged)


Total $500 Challenge Project Balance: $3,092.91

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 14 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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