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Monday, June 28, 2010

Monday Challenge Project Summary: June 28, 2010

Previous $500 Challenge Project Balances:

"The Three Sisters":

Investing "Sister" Balance: $783.51
Trading "Sister" Balance: $1,919.63
Interest Bearing "Sister" Balance: $425.30

Total Challenge Project Funds: $3,128.44


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 SAVING Account.

As I mentioned some time ago, the foundation for the Challenge Project is nearly complete. What does this mean? How will the 'foundation' being complete change the way we treat the Challenge Project accounts each week?

Well ... to date, the Challenge Project has spent much of a quarter focusing on "strengthening" one particular account out of the '
three sisters', to the abandonment of the other two 'sister' accounts for the remaining portion of quarter. Then those two 'abandoned' sisters receive attention in the next two quarters.

Beginning from this point forward, I hope to be in a position to make small adjustments to each of the three sisters, and we can look forward to growing the dividend investing and savings accounts to a "smaller" account, the trading account to a "average" account. It is hoped, that I will no longer need to take large periods of time, and only focus on one account.

Thus, the foundation is just about complete with the Challenge Project. Now we can start to think of building the actual structure on that foundation.

Trading Account:
We've grown the 'trading sister' account to $1,919.63, or away from a 'tiny account' to a 'smaller account'. As this account grows, we will begin trading more actively, and even begin day trades with a strategy that I have used in my newsletter. We're getting there, and I already have my eye on the next goal for this account, which will be $5,000.00 - at which point I consider this a 'small account'.

Investing Account:
Coca-Cola (KO) just can't seem to keep away from purchasing and acquisitions at the moment.

But that's ok. They have the cash to do so, the DRIP is on for the Sharebuilder account, and for the ThinkorSwim account, we'll be receiving a cash dividend on those shares. In addition, we'll begin to apply some deposits for rule no. two to this account as well in the future.

Savings Account:
With this weeks deposit, we have a higher amount available in the 'slush / sidepocket' fund to either the dividend investing account, or the trading account. Until the trading account profits can fund such increases, we have to rely on rule no. two to do so.

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

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $768.34
(YTD the account is -3.853% YTD Return is about -5.035% Continuing Yield is approximately +6.96% in dividends and additional shares of stock)
  • 6.1998 shares of KO (DRIP on for 4.1998 shares)
  • 5.13 shares of JNJ (DRIP on for 3.13 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 $112.00 available from slush fund
Investing Account Balance Since Inception
(Can be Enlarged):


Stock / Futures Trading Balance: $1,919.63
( YTD cash contributions, equity and return up about 20.26 % )
  • 2% risk tolerance gives us $38.39 'at risk' levels
  • 3% risk tolerance gives us $57.58 'at risk' levels
  • Additional $112.00 available from drawdown / slush fund
Trading Account Balance Since Inception:
(Can Be Enlarged)

Savings Balance: $450.30
(YTD cash equity up about 124.8 % Return on Capital is 0 %)
  • $112.00 for a Slush fund / Drawdown Kill Switch fund
  • $226.30 for a Base Savings
  • $112.00 for Emergency Savings
Savings Account Balance Since Inception:
(Can Be Enlarged)


Total $500 Challenge Project Balance: $3,138.27

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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