Happy New Year - 2015

The major markets had done well in 2014 except the energy sector. No one knows if the performance of the markets can repeat this year but we definitely hope so. I continue to focus on the ETFs investment for my portfolio. There are three ETFs having a good run last couple of years such as XLV, XLU, and TLT. As trend follower, these three ETFs along with SPY will be used as my sector allocation strategy this year.

SPY - 25%
XLV - 25%
XLU - 25%
TLT - 25%

Since this blog is for entertainment purpose, I will use the Jan 2, 2015 closing price as the entry point to establish the record keeping.

As of Jan 2, 2015:

SPY $205.43 -  hold
XLV $68.63 - hold
XLU $47.44 - hold
TLT $127.32 - hold

The weekly candlestick charts with Bollinger Bands, and RSI indicators will be used to determine the buy, hold or sell decision.

S&P 500 continues to move higher

As the stock markets continue to bounce back from the recent 10% pullback, so is the SPY ETF. It closed at $203.34 on 11/7/2014 and the momentum will likely to make it higher toward the end of the year.

Is now the right time to buy gold

Gold had peaked in August 2011 and has been drifting down ever since. Even though there were a few times that gold had popped up but it fell even more to the down side afterward.

Look at GLD, the ETF fund, the high was $180 a share in August 2011 and now it is sitting at around $133 a share as of June 7. A decline of about 26% during this 22 month period.

One may ask if this is a good time to buy gold (GLD). My answer is "not yet, not right now".  I will not buy GLD until the closing price reaches above the 50 day moving average.

 

The major markets have been trending up

If one could apply the weekly moving average as a trending indicator for the S&P 500 index in the last 18 months (Nov 2011 to present) , then he/she would be able to make about 37% profit from this investment.

Below is the S&P 500 (SPY ETF) weekly chart showing the faster 10 week exponential moving average (EMA) had crossed above the slower 40 week EMA starting in Dec 2011 and continued to stay that way as of today. Normally when this happens, it is referred to as a bull market. There were two occasions (May and Nov 2012) that the 10 week EMA was touching the 40 EMA and was very close to reverse its pattern in moving below the 40 EMA which it is categorized as bear market. But the reversal did not happen and the trend continued to go up.

I used this method to position my core holding during this period and resulted with some decent profits. My position such as ABT, COP, DUK, ED, KMB, MCD, MSFT, and PM which I think it still looks good and have some more room to the up side.

Total 2012 dividend income

Here is my 2012 total dividend income from my IRA account:

1) Jan: $2,150
2) Feb: $1,068
3) Mar: $3,070
4) Apr: $1,986
5) May: $1,083
6) Jun: $2,528
7) Jul: $1,714
8) Aug: $1,208
9) Sep: $2,059
10) Oct: $1,762
11) Nov: $1,221
12) Dec: $2,422

Total of $22,271 were received for the year of 2012. 

YTD dividend income as of Aug 31, 2012

Here is my YTD dividend income as of Aug 31, 2012

2012 dividend income:

1) Jan: $2,150
2) Feb: $1,068
3) Mar: $3,070
4) Apr: $1,986
5) May: $1,083
6) Jun: $2,528
7) Jul: $1,714
8) Aug: $1,208

Total of $14,807 were received from January to August 2012 and all dividends were reinvested.

Some stocks such as MCD, MSFT and PM  in my portfolio which I sold "out of money" covered call options to boost extra income and lower the initial purchase cost of the underline. It has been working according to my plan.

Recently I allocated some fund in this account to write protective put options as an experiment to bring in more cash. The result of this experiment was fair at this point. It either hit or missed. But I strongly believe it will be fine with continuing practice and better stock selection.

The protective put option is to sell "naked put options" on a particular stock with proper cash secured in the account. The premium is paid from the sale of the put options and deposits in the account as cash balance. The protective put options writing is allowed for IRA account.

Put options that I was able to make profits were A, MCD, and PM. Options that I didn't have such luck were FB, NFLX. The way that I handle the losers is to continue rolling the losing options to future months for additional premium or minor loser in order to buy more time for the underline stock to rebound. This is the case for both FB and NFLX.

Here is the site that I recommend for additional information about selling naked put options: "http://www.fullyinformed.com". This site is maintained by a great woman who is doing it for the last 40 years with tremendous success. A must visit site if you are interested in selling naked put options for steady income. I have no affiliation with her site but I am a happy frequent visitor there. 

S&P weekly chart remains positive

The first 6 months of 2012 is over and the S&P 500 index has gained about 9%. Not bad for the economy we are currently experiencing now. From the weekly chart of SPY (ETF version of S&P 500), there was a pull back in May but the trend remains positive and continues to move upward. It is indicated by observing the 20 moving average line still stays above the slow 40 moving average line. I will continue to monitor this trend.