I’ve always felt that investing is like a bar of soap. The more you handle it, the smaller it gets. – Darcy Howe
It’s been too long! At least once a month I will make the time to review my divi taxable account though! Let’s get into the juicy details that aren’t so juicy. It’s more like a Grade F meat type of juicy…
- I received $0.00 in divis this month.
Ok thank you for dropping by.
In all seriousness, this was the first month that I have received nothing from my holdings since starting this process in August 2015. I am ok with that because February will be ground breaking territory for divis. My philosophy has also evolved over the past two months. I am not sure if evolved is the right word, however, if it has become simpler. I will let English majors (swear I’m not hating on you) quarrel over such trivial matters (ok maybe a little).
I read a book on Maverick’s trading system in December as trading was something I was becoming increasingly interested in. I am still interested in it, but I am no longer interested in actually doing it. I have made the decision to just be a spectator and enjoy (and be amazed) learning about the success of the really great traders. They really do exist unlike unicorns so I’m told.
I am pretty high on this book and the methods discussed in the book even though I do not intend on using them going further. Like all systems that warm my heart, risk management (defining the amount of money you are willing to lose if wrong) is the overarching principle. I believe 100% that risk management is the most important theme to keep in mind while investing or trading.
- Random side note: Shorted AKRX using 2:1 risk/reward. Risked $35 for potential $70 gain. Learned a lot. Got stopped out. Check in the box.
I will use the overused folksy saying from Mr. Buffett himself:
“Rule No.1: Never lose money. Rule No.2: Never forget rule No.1“
I am highly confident that I wrote in an older post that if I discovered I was under performing the benchmarks then I would switch to more passive methods (indexing/ETFs). While I do not have hard details due to my brokerage switch (laziness?), I would be hard pressed to say my divi account beat my ROTH IRA account which is fully invested in VSIAX (a small cap value fund, expense ratio 0.08%) which is up 24.78%. While I can tout successes of VALE, I have to admit failures like KMI. What does this mean going forward?
I am pretty much committing this fund as a future down-payment on a home in a rough time frame of 1.5-3 years. I do plan on contributing more to this portfolio while reinvesting the dividends when I think it is beneficial. Risk Management will be the key. Overall, I am very happy with my current cost basis on all 6 holdings. NAT is a dark horse that could give a nice profit. I will probably sell most if not all at $12 for a nice gain as opposed to holding longer so I do not miss the opportunity of being able to make a larger down-payment and reduce stress (priceless) going forward.
My 2017 Financial Bullet Plan
- Finish 2017 Contribution to Roth (time frame: mid March)
- Save enough bread for short term events / CFP course from Bryant University (time frame: good portion of 2017)
- Once bread is saved and stored continue contributing to this portfolio
After I liquidate this portfolio (still pretty far down the road), I will invest in VOO (Vanguard S&P ETF 0.05% expense ratio) going forward. Heck, I might even use VOO in this account for the house. I’m not sure yet.
It’s hard for me to dislike this ETF. It has low expenses, proven track record, very simple, and Buffett approved! Largest holdings include: Apple, Microsoft, Exxon, Johnson & Johnson, JP Morgan, Berkshire Hathaway, Amazon, etc…
This leads me to my…
Future Financial Bullet Plan
- Max company match of 401k whatever % it is (Do not have this option currently but will take advantage if/when presents itself.)
- Max Roth IRA yearly
- Finish maxing 401k if possible
- If anything left after maxing 401k then simply put in taxable account using index/ETF like VOO
Also, besides Maverick Trading (might re-read one of these days even though don’t plan on implementing) I have other good books on the way! It will be a surprise when they get to me as logistics are kind of complicated at this point and time.
- The Dhando Investor: The Low-Risk Value Method to High Returns
- CFP Board Financial Planning Competency Book
- Your Money and Your Brain
- Devil Take the Hindmost: A History of Financial Speculation
- How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn
Trying to avoid being my worst enemy,