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Income Portfolio – Month 6 – Doing More With Less

Posted on the 16 November 2011 by Phil's Stock World @philstockworld

We added Ford to our virtual portfolio but, other than that – NOTHING!  Of course, that’s the goal of this portfolio exercise – our aim is to try to generate a $4,000 monthly income without touching our $500,000 principal – it’s the kind of set-up that would benefit the retired crowd and the last thing they want to do is go running back and forth to their computers every hour to see if the market is up or down 1% (as it can be several times a day lately!). 

The current market turmoil has forced a situation where EITHER you jump in and out of trades every time the wind changes direction OR you ignore the gyrations completely and focus on value investing over longer periods of time.  While we have had great success with our short-term trade ideas in the White Christmas Portfolio, it’s certainly not a style of trading that is suitable for more laid-back investors.  

I’m going to take a hard look at each of our open positions heading into the holidays.  We still have half our virtual cash and margin to deploy and we were net plus $37,654, which was practically our goal for the whole year ($48,000) in our first 5 months – so all we had to do was play not to blow it.  We already took $54,414 of virtual cash off the table and there was a net loss of $16,760 on our open positions and we closed the following (ALL passively) since our October 15th update:  

  • 25 DIA Oct $111 puts sold for $3.10 expired worthless – up $7,750
  • 1,000 shares of HCBK paid a .08 dividend on 11/2 – up $80
  • 1,000 shares of RRD paid a .26 dividend on 11/8 – up $260
  • 1,500 shares of NYB paid a .25 dividend on 11/3 – up $375
  • 4,000 shares of AA paid a .03 dividend on 11/3 – up $120
  • 10 TLT Oct $118/114 bear put spreads at $1.05 expired at $4 – up $2,950

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