Search This Blog

Monday, March 21, 2011

Monday Challenge Project Summary: March 21, 2011

Previous $500 Challenge Project Balances:

"The Three Sisters":

Investing "Sister" Balance: $1,129.20
Trading "Sister" Balance: $2,269.36
Side-pocket Savings "Sister" Balance: $700.00
Total Challenge Project Funds: $4,098.56

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 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. As I mentioned on August 10th, 2010 I have liquidated all of the other personal accounts that I've discussed on this blog for the last 4 years, and to emphasize the strength of these principles? I will demonstrating my success, again, this time it will be live, with the 'Challenge Project', full time.

For this week, the $25.00 weekly deposit is being transferred to the Challenge Project DIVIDEND INVESTING Account.

This week I was actually thinking of peppering the Trading account with rule no. two. I want to start the final buildup in that account so that trading can begin there by the back end of the year. But the markets are still giving a bit of volatility, so I am adjusting ... and instead ... rule no. two is being applied to the dividend investing account this week.

I'm using that application to bump up Coca-Cola's (KO) cash dividend reservation, as well as the 'maneuvering capital' that will eventually grow into a portion of the account that will take care of hedges.

At this point? The drawdown in the dividend investing account itself is breaching the 3% zone. So will I now use the drawdown slush fund to bump up the account balance to the dividend investing sister?

Well ... that is an option that my portfolio management system does offer to me. And there won't be active trading probably until the back end of this year. So I'd have time to rebuild that section of the fund with future applications of rule no. two.

I think I'll wait ... for now, before doing this. I just want to watch, and observe. But I did want to include a note that now that we've breached 3% drawdown in a single 'sister' of the book? I am beginning to think about that option. We're still underneath 1% drawdown for the the entire book, but at the same time I want to keep all three sisters in a healthy position.

As well, it should be noted that Johnson & Johnson (JNJ) paid a dividend, and I have noted both the dividend below, as well as the updated share accumulation.


Next week, we'll be discussing an expansion of the side-pocket savings account balances and strategy. Because even if we do decide to use the drawdown slush fund and transfer it to the other two sisters? We have arrived at the time period where we can still begin to expand this 'sister' of the three 'sister' portfolio management system.

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

Challenge Project Balances After Rule No. 2 Deposit:

Goals for Each Account By the Time I Trade Challenge Project Full Time
  • Investing Account: $580.00 in cash past equity positions
  • Trading Account: $2,600.00
  • Savings Side-Pocket Account: $900.00

Investing Account Balance: $1,133.66
(YTD the account is +11.11 % YTD Return is about -3.135 % )
  • 6.2685 shares of KO ( DRIP is on for 4.2685 shares - Yield is +2.998% )
  • 5.2147 shares of JNJ ( DRIP is on for 3.2147 shares - Yield is +3.688% )
- $1.08 Paid in Cash in Second Dividend Account
- $0.0291 more shares of JNJ accumulated at $59.106529
  • 6 shares of GIS ( DRIP is not on for any shares - Yield is +3.056% )
  • Cash $213.24
-$134.16 of this cash I reserve for 'maneuvering' capital ( 11.83 %)
-$ 15.00 of this cash I reserve to D.C.A. KO ( 1.323 % )
-$ 41.08 of this cash I reserve to D.C.A. JNJ ( 3.624 % )
-$ 17.00 of this cash I reserve to D.C.A. GIS ( 1.5 % )
-This leaves $ 3.00 cash available for a new purchase ( 0.2646 % )
-This leaves $ 3.00 cash available for a second new purchase ( 0.2646 % )
  • Additional $175.00 ( 15.44 % ) available from slush fund, up to $1,308.66

Trading "Sister" Account: $2,269.36
( YTD cash equity up 2.253 % Return on Capital is 0 % )
  • 2% risk tolerance gives us $45.38 'at risk' levels
  • 3% risk tolerance gives us $68.08 'at risk' levels
  • Additional $175.00 ( 7.711%) available from draw-down / slush fund, to $2,444.36

Savings Side-Pocket Balance: $700.00
( YTD cash equity up about 12% Return on Capital is 0 % )
  • $175.00 for a Slush fund / Draw-down Kill Switch fund
  • $350.00 for a Base Savings
  • $175.00 for Emergency Savings
- As described in previous entries, all deposits past $675.00 will be towards an interest bearing account, although it separate accounts will still be treated as one 'sister' portion of the book.


Total $500 Challenge Project Balance: $4,103.02 ( YTD the account is +6.166 % YTD Return is about -0.8863 % )

* * *

Note: The above statements should not be construed as an investment or trading recommendation. Airelon's Investing and Trading Journal is a blog that allows subscribers to look 'over my shoulder' as it were, for my own personal specific trading and investing ideas and thoughts for the next week. But they are only thoughts as of the moment of publication, and are subject to change.. Any trades or investments that I discuss within this blog are simply my own thoughts regarding my own investing and trading outlook. Remember that entering any market is an individual decision. There is no guarantee that I will enter, or have entered any of the trading or investing ideas that I discuss in this blog; as larger accounts may require a different strategy as the ones presented here. This blog simply contains my trading and investing thoughts for the next week. I, the author do not grant this work for wide distribution beyond any single individual subscriber as this publication is protected by U.S. And International Copyright laws. All rights reserved. No license is granted to the user except for the user's personal use. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted or otherwise reproduced, stored, disseminated, transferred, or used, in any form or by any means except as permitted under the original subscription agreement or with prior written permission. I personally only enter any market after watching and reading the tape and I trade using money management principles. The losses in trading can be very real, and depending on the investment vehicle and market, 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. Airelon's Challenge Chronicles are demo accounts,with all of the inherent problems therein, which are used within this blog in an attempt to track the results of my own thought processes., and is run as a model. Traders who should make their own decisions based off their own research, due diligence, and tolerance for risk. Any pictures used within this blog are believed to be public domain. Any charts that displayed using the ThinkorSwim platform, or any other charting software are believed to be public domain. Any other pictures were obtained through Wikipedia's public domain policy. As a reminder, any trades discussed for "Airelon's Challenge Chronicles" would only be 'day trades' according to the parameters discussed for Airelon's Challenge Chronicles, at this stage of the game in order to escape the risk of over-leveraged gap opens in the commodity futures markets. As a 'trading sister' would have grown to the $30,000 level, I would have graduated the account into 'swing trading'. In addition, it is understood that readers have read my YouTube methodology series. It is also understood that the writer of this blog has repeatedly warned against the dangers of shadowing any other traders thoughts. 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

Search Investing and Trading Articles and Products