Back in March, we decided we were going to sell in May and go away in our special update (regular update was here).
We had turned bearish on the market by March 12th, perhaps a little early but it gave us plenty of time to make good exits and get our prices. Since our Income Portfolio was running 100% ahead of schedule and more like 250% counting the unrealized gains from our buy/writes as the market zoomed higher on us, we decided it would be good to go back to cash – especially as it would be fun to build a brand new Income Portfolio for 2012 that our newer Members will be able to benefit from following as well as it is, by far, our most popular virtual portfolio.
I did not specifically give exits on all the positions. The idea was to cash out so we could start the new portfolio in June 1st. We had the nice pullback we were expecting and, in closing out this portfolio, it will be interesting to see how well things held up. We had $110,236 in realized (albeit virtual) gains as of our April 14th update – not bad after 11 months with a $500K portfolio that was only looking to take out $4,000 a month!
This is the kind of set-up that my Mom and many of her friends need to do to supplement their not very generous Social Security checks but it’s also using the same principle that applies to any long-term wealth-building strategy, utilizing our best long-term growth strategies combined with a concentration on generating an income collecting dividends and selling short-term options to create our own “dividend” stream on ordinary stocks. Please see previous posts in our Virtual Portfolio section for our main strategy discussions – this is just an update.
The following positions were closed – mostly passively as they expired:
- 15 GE April $19 puts sold for .45, expired worthless – up $675
- 15 GE April $19 calls sold for .55, out at .36 – up $285
- 10 IMAX Apr $27 calls sold for $1.30, expired worthless – up $1,300
- 30 FTR April $4 calls sold for .50, expired worthless – up $1,500
- 1,000 shares of HCBK paid .08 dividend on May 8th – up $80
- 1,000 shares of RRD paid .26 dividend on 4/18
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