Sunday, August 23, 2015

Financial Planning Weekend Update - August 23, 2015

That was something eh? The correction arrived in force on Thursday and Friday and the S&P 500 slammed right through every recent support level bounced a little and then crashed through 2000 on the way to 1970. But you know what? Even with the horrible performance of the market as a whole during this little experiment here's where the model portfolio has ended up:

Yep. Down 0.84% and sitting on more than $25K in cash. When I shifted into this model on April 20, the S&P 500 closed at 2100. That's a drop of roughly 130 points or about 6.2%. So at least I "beat the market". And you know what? If this were real money and Beth asked how we were doing, I'd have to say "darn good!". And remember - every one of those companies is still pumping out dividends ($1186 for September) and I'd be writing a fresh batch of calls including a roll out of ED.

And that's it for the model portfolio!

From now on we'll be looking at the real positions I have in my Rollover IRA:

Equity Positions
As of today the IRA holds the three positions shown above along with a small amount of cash.

The options look like this right as of Friday. MRK has obviously taken the brunt of the correction. Not surprisingly ED has held up very well, as utilities usually do in situations like the one we're in. HCP is also holding up nicely. I suspect that's principally because people now see a Federal Reserve interest rate increase in September as increasingly unlikely.

Finally, the current value of the IRA is up fractionally. If only I'd waited another week to make my move! I'd have even lower underlying prices and could have sold much more expensive calls due to the increase in volatility.

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