Sunday, February 12, 2012

Week 42 Update and Flexibility

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

So why the focus on flexibility for the Model Portfolio?
We as do it yourself investors and traders will (hopefully) spend a good deal of time planning how our portfolios will work. Which things we will investor in. How does this market look to trade. In the end though no matter how detailed and complex our planning may get, once we place our money at risk, anything can happen. We have to be open not only to the fact that we might be wrong but that sooner or later we WILL be wrong  on the profitability of an investment or trade. What then? A lot of focus is spent on how we will live life in retirement and spend our riches of profit on but thats a long journey to get there.

In this week's update video I discuss the importance of flexibility for savings but what about the other accounts?

For the dividend investing account, at some point one of the stock I buy will probably have problems. I need to be in the position to recover. If a company's price drops enough but I still want to own them then I need flexibility in the account to be able to buy more. That is what the cash position in the investing account is for.
If I no longer want them I will sell and probably not get as much income in the replacement purchase because I had less. That is what the Portfolio Protection part of the savings account is for.
I need to be able to add more money in to replace that lost income. Otherwise I have to decide how I will lower my standard of living to adjust the lower income.

For the forex trading account, I could hit a bad series of losses. The plan would be to stop trading and figure  out what is wrong to prevent future losses. However by no longer trading I am also putting future gains on hold. Will that impact my growth models and delay my goals? When I restart trading the account will be lower from those series of losses. My profitable trades will be smaller because of that. I need flexibility and cash on hand to be able to get back to growing the account.

Weekly Activity
$100 deposit into Savings
Purchased COP
$1.45 dividend from JNK

Model Portfolio Totals

Trading Account: $961.09
Estimated Monthly Income: $0 (Not ready to trade until Phase 1 completed)
Max amount in Forex trade (50% of account): $442
Max loss per trade (1% of account): $9.61
Portfolio stop (3% account): $28.83

Investing Account: $2,135.79
Estimated Monthly Income: $7.62 ($0.147 from DRIP shares)
     ABT: $0.71 income/month
     WMT: $0.53 income/month ($0.003 from DRIP shares)
     COP: $0.76 income/month
     ERF: $1.73 income/month ($0.041 from DRIP shares)
     O: $1.08 income/month ($0.018 from DRIP shares)
     JNK: $1.66 income/month ($0.060 from DRIP shares)
     PCY: $1.14 income/month ($0.025 from DRIP shares)
Maneuvering Cash: $350

Savings Account: $1,300
Emergency: $1,000
Portfolio Protection
     Trading Account: $50
     Investing Account: $250
CDs: $0
Precious Metals: $0

Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.


  1. Your Savings tab and Funding tabs above need to be updated.

  2. I have been watching a few oil stocks for a while and noticed you made your move. COP, HAL, and PER have been keeping my attention, what are your thoughts on those? PER is new, but has promising growth when the rest of the wells are complete. HAL and COP are very well established on the other hand.

    1. PER: I'd have to know the % split of oil vs nat gat. Nat gas is so low right now and will be for some time due to oversupply and little demand.

      HAL: Their 1% yield is too low. I want at least a 2.5%