Saturday, August 1, 2015

Financial Planning Weekend Update - August 1, 2015

About the best that can be said for this week is "losses were reduced". At least football is right around the corner.

As you can see, three positions are in the money. The most interesting one is Ventas. The company had a good quarterly report which boosted it a bit. I believe the current driver however is the spin off of their skilled nursing facilities into Care Capital Properties (CCP) after the close on August 17. Expiration is August 21 and the position is more than $2.00 in the money. So what will happen?

On the morning of the 18th the current $50 strike calls will be adjusted to include both VTR and CCP and new calls will be created for both companies that reflect only stock. Because I "own" 400 shares of VTR, after the spinoff I'll also own 100 shares of CCP. It's expected that the combined dividend will be about 10% higher than the current VTR only dividend so it should make sense to hold both.

Because I expect to retire relatively soon (within the next ten months or so) this week I've started to move money from my 401(k) into a Rollover IRA. The reasons for this include:
  • The 401(k) has reached a target value I set about 3 years ago
  • I want to start "dripping" dividends before I need them for income
  • I want to do the same with income from covered calls 
The real world portfolio will be pretty similar to what I've been modeling here but it won' be implemented all at once. Some sectors (e.g. Oil) are likely to have additional downside and although the high yields are tempting an extended period of low oil prices certainly puts them in danger. If or when I do move into oil I'll probably go with an integrated company like XOM rather than an E&P like COP.

More next week!

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