June has been a rather eventful month for me, not so much for the investment front but rather for my personal life. More on that in a different post. We did not sell in May, we actually incremented some positions, and in June it has been “business as usual” with markets that are showing some signs of a slowdown albeit the general economic outlook is still positive. Mind you the “slowdown” is in the pace of growth, so by the end of June record show that we are in a very buoyant environment, where growth in the last 6 month outpaced growth of the second semester of 2016. This is a rare occasion as usually the first semester of the year is worse than the previous semester. Again, I would not complain too much about it, let’s take what the market throws at us and look ahead!
The “Long Haul Fund” is my attempt of getting an “immediate” state of the art of all the investments that I am following. Pretty much like professionally managed funds I can boil all the activity down to a performance indicator, in our case Total Return. (Thanks to Dividend Life for this post on how to create a Fund)
TR stands for Total Return (selling everything, paying taxes and commissions and converting to euro), YoC is Yield on Cost (what my investments have returned to me via dividends/options), TER is Total Expense Ratio (commissions + taxes).
Total Return is not something I am particularly concerned about at this stage (plus it’s an estimate as I have calculated potential taxes and commissions in it), it’s highly affected by the way the market behaves especially in a young portfolio such as this one. But it’s a metric that it’s worth keeping an eye on. YoC is on the other hand more interesting to me, as that is what the PF has produced over time, my target is to reach the 2% x year net mark (by net I mean YoC-TER).
TR ratio is down vs May, this is the second decrease in a row, markets are not helping with but much is due to currency depreciation (USD and GBP), might buy some dollars on Monday/Tuesday because 1.14 is pretty decent in my opinion. Still Total Return is suffering for it.
Options Yield goes to 6.45% (-0.40% vs May), while Dividend Yield goes to 8.30% (+1.45% vs. May). both need explanation. Dividend got a huge boost thanks to the coupon of a Fiat Bond that is now expired. Options are getting a major drawdown thanks to a very strong rolling activity in June AND the fact that all the money I had on the expired bond is now going into Options, decreasing the yield ratio. I am not too much concerned, but next year the yield curve is going to be much different as the bond is not there anymore.
TER is on the move, got the tax returns for 2016 and added those taxes on 31.12.2016 (as they belong there), as a result there was a substantial increase, but we knew it was coming. Now that 2016 is over the result on 2 years (12.2014-12.2016) is a 1.295% NET yield from the portfolio. It’s not 2% but considering that in 2015 I didn’t have any capital deployed it means that I am already above the 2% NET mark, it will just take time to get it.
Apparently a grand month, closed at the record setting sum of 4563 Euro!!!
This is thanks to the bond coupon, and next year it will not be there anymore, so if I will ever beat this result it means that I am getting extremely good with options or that I have found another similar bond to buy!
Dividends were 4440 Euro (+ 26% vs.2016) and Options scored a 122.97 Euro (+1355% vs 2016).
Options were a real drag this month (despite the stellar comparison with 2016, but that’s because in June last year I traded my first option ONLY), but I managed to get more than 4000 Euro gains, having 878 Euro NEGATIVE income from rolling. I am still pretty impressed at the fact that I managed not to have the second negative month on options, but that was thanks to the money that I got from the expired bond that have given quite a boost to my option trading.
June is the fifth month in a row where the fund returned more than 1000 euro, and the second to pass the 2000 euro mark, I am really happy about these results. In June I have already done last year result.
T – Bought 20 shares @ 37.89 USD
Needed to start trading Covered Calls, I am not really happy since I bought at a price higher than my average, but this is a long term holding and I am going to sell Covered Calls (3 months expiration) to beef up dividend yield.
New Positions – Sold Positions
None to report
Options plays are strategies that I put in play with some stocks where I want to “trap” a dividend and sell the stock immediately after. It doesn’t always work, so sometimes you get to keep the stock for a longer time.
These results are already factored inside TR, Options and Dividend gains and are expressed “net”, including all taxes and commissions.
This month I have closed the SO play (as you can see in the report below).
There are going to be changes ahead of the road. The Fiat bond that expired is not going to be replaced, Bond market is very very difficult at the moment and yield is not compelling. I have decided to use the cash to go heavier on Options, and keep a bit more liquidity “just in case” some opportunities arise. We enter the second part of the year where I expect less YoY growth, due to the fact that I did trade options last year and comparison is going to be less “stellar” than the first semester. I am experimenting with a new “dividend play”, once I have more data I will post an update on it. Generally speaking the Fund is hedging towards that 2% Net Yearly yield that it’s one of my major targets, we’ll have a clearer picture in the coming months, but we are pretty close.