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Anything related to investing, including crypto

Martzee

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Oct 6, 2020
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Another great month investing in dividend growth stocks and trading options around those positions.

Our stock holdings grew by $7,732.15 in August.
We made $6,133.00 in options premiums and received $780.09 in dividends. The account started snowballing its income and growth.

More details about the account performance, our plans for the next month, and market outlook here:
 
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Martzee

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September is over! What a month! We were used to sharp declines and even sharper recoveries but in September, this was a slow and dreadful decline.

Last week we lost our net-liq value by 2.79%. Overall, in September our account lost -4.41% which is less than the entire market. The S&P 500 lost -5.7%. In this perspective, our account beat the market.

Our dividend income was steady, we have received $45.86 in dividends last week, closing September at $176.60 dividend income.

Our options income was spectacular in September. We closed the month with $2,353.00 options income but that is after we purchased LEAPS options worth $5,000.00. If we haven’t bought those options, our September income would have been $7,353.00 making it the best month ever. But we had to take the opportunity of the market selloff.

See the full weekly report here:
 

Martzee

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October 2021 was my best month generating income trading options. I made $8,721.00 in premiums. My account net liquidating value increased by a whopping $14,825.36 this month. Dividend income was in line with the goal. The total account growth in 2021 reached 357.15%.

Read the full weekly report here:

 

pat9000

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Really solid thread and thank you for the insight.

Options are difficult to master as there are so many variables and leverage at risk but once you learn them, they become a huge asset.

The stock market is a good way to make a nice paycheck out to yourself at your period of choosing as long as you already have a lot of capital to drop in there. It takes money to make money in that space.

I like dividends but it sucks that they're taxed as regular income and there aren't any benefits.
 
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thechosen1

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Really solid thread and thank you for the insight.

Options are difficult to master as there are so many variables and leverage at risk but once you learn them, they become a huge asset.

The stock market is a good way to make a nice paycheck out to yourself at your period of choosing as long as you already have a lot of capital to drop in there. It takes money to make money in that space.

I like dividends but it sucks that they're taxed as regular income and there aren't any benefits.
Dividends are taxed lower than ordinary/earned income.
 

Martzee

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Really solid thread and thank you for the insight.

Options are difficult to master as there are so many variables and leverage at risk but once you learn them, they become a huge asset.

The stock market is a good way to make a nice paycheck out to yourself at your period of choosing as long as you already have a lot of capital to drop in there. It takes money to make money in that space.

I like dividends but it sucks that they're taxed as regular income and there aren't any benefits.
I disagree. The biggest benefit of dividends is that you do not have to do anything to earn them. Once you buy a solid good quality dividend growth stock, you are all set for life.

Not all dividends are taxed as ordinary income. Most ordinary dividends that are paid by domestic businesses and corporations and that are held more than 60 days become qualified and these are taxed at a lower tax rate of 15%. However, even if you compare your income which you have to work for, and then pay taxes based on your tax bracket vs. dividends for which you do not have to work and then pay taxes based on your tax brackets, I still think dividends are a winner whether they are ordinary or not. If you set up your investing and trading as a business, some of your expenses can be deducted which you cannot deduct as an individual (and if you qualify for TTS, then you can deduct pretty much everything).

Comparing dividend income with the business endeavors, I still think dividends are a winner because you do not need inventory, supplies, employees, clients, complaints, offices, warehouse, marketing and advertisement, dealing with angry clients, refunds, hours of hard work, and after years of hard work you face a potential failure, you don't need any of it when investing in dividend stocks or learn how to trade options. You have complete freedom. Trading options and investing in dividend stocks is the best business I can think of. Not easy, but still the best.
 
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pat9000

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I disagree. The biggest benefit of dividends is that you do not have to do anything to earn them. Once you buy a solid good quality dividend growth stock, you are all set for life.

Not all dividends are taxed as ordinary income. Most ordinary dividends that are paid by domestic businesses and corporations and that are held more than 60 days become qualified and these are taxed at a lower tax rate of 15%. However, even if you compare your income which you have to work for, and then pay taxes based on your tax bracket vs. dividends for which you do not have to work and then pay taxes based on your tax brackets, I still think dividends are a winner whether they are ordinary or not. If you set up your investing and trading as a business, some of your expenses can be deducted which you cannot deduct as an individual (and if you qualify for TTS, then you can deduct pretty much everything).

Comparing dividend income with the business endeavors, I still think dividends are a winner because you do not need inventory, supplies, employees, clients, complaints, offices, warehouse, marketing and advertisement, dealing with angry clients, refunds, hours of hard work, and after years of hard work you face a potential failure, you don't need any of it when investing in dividend stocks or learn how to trade options. You have complete freedom. Trading options and investing in dividend stocks is the best business I can think of. Not easy, but still the best.
I'm not really sure if you read my post and started ranting or ?

I never said dividends were bad....
 

Martzee

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I like dividends but it sucks that they're taxed as regular income and there aren't any benefits.
I was reacting to your statement that there are no benefits to the dividends.
 
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ljean

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I receive $2500/mo in dividends but it doesnt make me any wealthier. Anytime one of my stocks issues a $x dividend the stock price drops by $x. Net zero.
 

Martzee

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I receive $2500/mo in dividends but it doesnt make me any wealthier. Anytime one of my stocks issues a $x dividend the stock price drops by $x. Net zero.
This is to prevent people from gaming the system. Otherwise, everybody would buy before ex-date and sell after ex-date. So for speculators, it would be a zero-sum game, for the long-term investors it is not. The dividend is paid from earnings and it has nothing to do with the current stock price. I bought JNJ many years ago for $38 a share, today it trades at $150 a share and it was increasing the dividend every year by 6%, so my yield on cost is 16%. If it was a net-zero game, the stock would go nowhere and in fact, thanks to increasing dividends every year, it would go slowly to zero). You clearly do not understand dividend investing.
 

Martzee

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I am adding an HFEA strategy to my portfolio. Will be posting results on monthly basis.

Start date: 11/27/21
Approach: Variable allocation* - 45/55 SPXL/TMF
Rebalancing frequency: Quarterly*
Return (total / YTD): 0%/0%
Initial contribution: 15% of portfolio Net-Liq (~ $15k)
Portfolio location: TastyWorks

*My initial allocation is 45 SPXL / 55 TMF .
When the market closes below 50-day MA, I adjust allocation to 40 SPXL / 60 TMF
When the market closes below 200-day MA, I adjust allocation to 0 SPXL / 100 TMF
When the market closes 20% or more below ATH or 200-day MA, I change the allocation to 100 SPXL / 0 TMF
When the market closes above 200-day MA, I change the allocation to 45 SPXL / 55 TMF
 
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Martzee

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November and the first week of December were great on options and dividend income. Net-liq suffered from tech selloff.

We are still up over 300% for 2021 and our options income reached $56k for the year.

Details on the investing and trading report are here:

2021 Week 48 investing and trading report

 

Martzee

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Another successful week despite the market's selloff. Thanks to the selling I had to roll some of the trades that delivered additional credit increasing my income from options to over $6k in December.
Detailed report here on my blog:
 

Martzee

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2021 is over. What about 2022?

A lot of people predicted the stock market to tank. Youtube is full of videos about incoming "mother of all crashes". Media are posting articles about the end of the bull ("because this is the longest bull ever so it must end").

This is all a big pile of crap shitted over the internet by uninformed or sensation chasing idiots.

First, this is not the longest bull ever. The longest secular bull ever took 27 years. We are barely in the middle of that term. Check the charts for yourself. Step away, open 100 years chart and draw lines. you will clearly see two periods of going nowhere and two periods of running bull in between. We exited the period of going nowhere in 2013. Now we have 27 years (from the bottom in 2009) to go.

Earnings - in 2021 the S&P500 companies reported record earnings growth ever posted in the history of the US - 45% This is a stunning number! How can a market crash when businesses did so well? And estimates for 2022 and 2023 are also very positive. Some analysts started admitting that those estimates are probably very conservative and might be revised to the upside. The markets follow earnings. In the real estate world, location, location, location, is the mantra. In the stock market, earnings, earnings, earnings, is the mantra for success. Watch earnings estimates and you will know.

And what about the FED, inflation, interest rates, and Omicron? All bullshit. The interest rates were historically good for the stocks. Inflation will drop (companies are already marking down prices because consumers are reluctant to pay the high prices, soon we will see deflation and oversupply. The retailers were grossly undersupplied due to covid. It is now going away and they are (mistakenly) oversupplying themselves.) Omicron? According to doctors no worse than a common cold. Tapering? Yes, that may shake the valuations, but it will not shake the bull market. All it will do is change the trajectory of the market to the upside. Maybe a bit slower or not a sharp up line what we have witnessed in the last years, but still up. Why? Earnings, earnings, earnings! That's why!

Will there be crashes? Of course, there will be crashes. We will see crashes 5%, 10%, 20%, or even 50%. But it still will be a crash within the secular bull market. Look at the chart below.

82876450_10219141098829643_1014113414345129984_n.jpg

Can you see the secular bull market from 1970 to 2000? Was it a smooth move up? Of course not. look at the trouble in 1987. Right now, a blip. Back then? End of the world. People will always panic and sell everything over anything. End of the world - panic. Omicron - panic. Some distant war - panic. Stinky fart in the air - panic. And media will make sure to tell us after the fact why we need to panic.

But if you learn the ropes and how to read the market, you will be laughing and ignoring all the noise.

To me, 2021 was an excellent year. Not only I have achieved a 400% growth of my portfolio, I learned a lot of important stuff on the way up. I learned that earnings are really extremely important and how to find that information and use it. I also learned how to use VIX and VIX futures to gauge market health. Is the selling just a noise to ignore or a dip to respect? VIX term structure will tell you. I also learned patience and make my trading mechanical as much as possible. Avoid any second-guessing. The market says "A", your response is "B", no other way available. No second-guessing if it should have been "G".

I started two new strategies that I will develop in 2022.

My original strategy was to accumulate shares of high-quality dividend growth stocks and monetize those positions by trading options around those positions - strangles, puts, or covered calls. I will keep doing this in 2022 as this is my big money maker.

But I wanted more growth and I found and learned about HFEA strategy. It is a semi-passive strategy that leverages growth and protects the downside. I dedicated $15k of my portfolio to this strategy in November and December and I will develop this strategy in 2022.

I used to trade SPX in the past but got burned badly several times. I still liked the strategy but stopped trading it and but I spent the whole year 2021 learning a better way to trade SPX. I think, I found and established a good strategy for the trading of put credit spreads to generate income.

I will post my results on my blog (see the links above). I hate to promote my blog but on the other hand, I will be happy if you stop by and give thumbs up (or down). Why I am posting these reports? The primary reason is to keep me accountable. If I deviate or start doing something else, writing my weekly report will reveal it and I will have to admit I was doing something I shouldn't have to. And people here in this forum and readers of those reports can help me to keep myself in check by asking questions or discussing the strategies. In the end, we all will learn from it.

And if you think that trading stocks or options is your niche you want to learn and do (as it is my passion to develop for a living), do not hesitate to ask. I am open to helping others to learn what I have learned.
 
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Martzee

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2021 is over. Here are highlights of my dividend and options trading during the year:

Net-liq value growth: 409%
Options income: $62,026.00 (+59.27%)
Dividend income: $2,785.53 (+259.98%)
Stock holdings value: $133,469.78 (+634.17%)

CAGR since inception (2014): 572.13%
Portfolio alpha: 52.97%
Portfolio yield: 4.70%
Portfolio dividend growth (3 yr average): 8.80%
Details can be found in my regular weekly investing and trading report.
 

Martzee

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2022 SPX put credit spreads trading review – week 03


At the end of December last year I added another strategy to my portfolio - trading SPX put spreads. I developed a set of rules and trend indicators that help me to stay away from the market if the market is negative or going down. Most of the days in January, I was sitting aside (trading only a few spreads that could be safe in this market), but other than that, all trades that I usually take when the signals are positive, were not taken.

So, far, the SPX account is up 46%. Backtesting showed promising results. Live trading looks good too so far.
 
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Martzee

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I treat investing as a business. That is why I started an LLC to invest and trade as a business (it also has tax benefits) and manage my own and our partners' money.

In our trading business, I started three accounts with different trading approaches - the main account with investing into dividend stocks and trading options against these positions, SPX put credits strategy account and HFEA account.

Every month I report the results of the HFEA account. Since January is over, here is the report for the HFEA account and its performance compared to SPY:

HFEA January 2022 strategy report

The HFEA lost ground amidst the selloff. Our HFEA strategy lost -14.73% in January 2022 while the entire market lost -6.95%.

Start date: 11/27/21
Approach: Variable allocation* – 45%/55% SPXL/TMF
Rebalancing frequency: Quarterly*
Return (total / YTD): -6.87%/-6.87%
Initial contribution: 15% of portfolio Net-Liq (~ $15k)
 

Martzee

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Oct 6, 2020
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Martzee

Bronze Contributor
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Speedway Pass
Oct 6, 2020
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Denver, Colorado, United States

Martzee

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Oct 6, 2020
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What are the benefits of LLC for trading business? I talked about it with my accountant and she said there are none.
If she said "none" then you need to change your accountant.

There are many benefits - business-wise, as well as trading-wise. For example, many expenses that are not deductible as a sole proprietor (investor) can be deducted inside your LLC. Note, it must be a partnership, so at least two members LLC. Not a standard simple LLC of a one-member (sole proprietor).
 
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kubikdanon

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If she said "none" then you need to change your accountant.

There are many benefits - business-wise, as well as trading-wise. For example, many expenses that are not deductible as a sole proprietor (investor) can be deducted inside your LLC. Note, it must be a partnership, so at least two members LLC. Not a standard simple LLC of a one-member (sole proprietor).
Can you be a little more specific? name one expense that can be deducted with a partner LLC and not a single member LLC or sole proprietor (for trading stocks or options).
 
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