Saturday, June 6, 2015

Financial Planning Weekend Update - June 6, 2015

This week started out looking pretty good. Then the wheels fell off on Thursday with panic about Greece, a too strong jobs report on Friday, and heaven knows what else spooking the market. Well, Friday brought the strong jobs report, Greece postponed their IMF payment, blah, blah, blah... Sure enough, the markets opened down Friday morning but were sneaking into green by 10:15 or so. Then levels just drifted through the close.

My portfolio is looking pretty sad, showing a substantial paper loss for the month although it's actually up $8,723 since I started this project back in March. And of course the dividends keep coming in.

Everything is "out of the money" at this point so for the next two weeks the main thing I need to think about is what (if anything) I want to do about the big losers. I'm especially concerned about COP. ConocoPhilips skipped an expected dividend increase this quarter and it needs WTI to reach $70 and  Brent at $75 to be be able to cover dividends from cash flow. With those futures around $58 and $61 COP could be looking at a price near $60 in the not too distant future.

I'm willing to give Ford more time to get the F-150 lines up to speed and show some positive momentum. Depending on my June premium income I may add to the F position to reduce my cost basis and increase dividend income.

Like all utilities, ED is interest rate sensitive. Should the Federal Reserve signal a raise in the overnight rate for fall I'll start looking for a dip to buy into. With the 10 year note at 2.4% all the utilities got hammered this week.

The last big loser is Proctor and Gamble. The company is in the process of selling off under performing brands so volatility is to be expected and patience is required. Even so, it's a little annoying to have to just sit on the shares so if it's still sitting in the $78 area by the 19th I may take a chance on selling something like the July 80 calls knowing I may have to buy them back. PG's next earnings announcement is scheduled for July 30.

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