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Monday, July 19, 2010

Monday Challenge Project Summary: July 19, 2010

Previous $500 Challenge Project Balances:

"The Three Sisters":

Investing "Sister" Balance: $818.86
Trading "Sister" Balance: $1,944.63
Interest Bearing "Sister" Balance: $450.30

Total Challenge Project Funds: $3,213.79

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.

From time to time, as a buttress of support to both the investing and trading accounts simultaneously; I'll be making deposits to the savings 'sister' account.

The value of a savings account is not simply interest earned. I have the cash in a place that's not earning interest (at the moment, that can and will change). The value of savings ... is that it's savings.

Seriously ... it is a buttress, or support, and in effect, a type of "tier capital" in times of drawdown. I could use that 'sidepocket' immediately, and pop up the trading account to $2,062; or the dividend investing account up to over $900.

But there's no reason to at the moment. Rule number two has our trading account growing at a good clip, and I can use it towards the investing account should we begin to experience significant drawdown.

But should that situation develop in the future, then I want the savings 'sister' account in good shape, and ready to go.

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

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $813.04
(YTD the account is +2.469% YTD Return is about +1.209% Continuing Yield is approximately +6.96% in cash dividends and additional shares of stock)
  • 6.2367 shares of KO (DRIP on for 4.2367 shares)
  • 5.13 shares of JNJ (DRIP on for 3.13 shares)
  • Cash: $181.49
-$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 $163.90 cash available
  • Additional $118.00 available from slush fund
Investing Account Balance Since Inception
(Can be Enlarged):

Stock / Futures Trading Balance: $1,944.63
( YTD cash contributions, equity and return up about 21.83 % )
  • 2% risk tolerance gives us $38.89 'at risk' levels
  • 3% risk tolerance gives us $58.33 'at risk' levels
  • Additional $118.00 available from drawdown / slush fund
Trading Account Balance Since Inception:
(Can Be Enlarged)

Savings Balance: $475.30
(YTD cash equity up about 137.3 % Return on Capital is 0 %)
  • $118.00 for a Slush fund / Drawdown Kill Switch fund
  • $239.30 for a Base Savings
  • $118.00 for Emergency Savings
Savings Account Balance Since Inception:
(Can Be Enlarged)

Total $500 Challenge Project Balance: $3,232.97

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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