Month End Summary – April 2019

April was a good month for me, not S&P 500 good, but good for my personal goals. Technically, I’m fully invested, however I’m sitting on a MSFT naked put that only has a few cents of time value left in it and I should put that money to work elsewhere. I don’t think I have any big distractions coming at me in May, so I should be able to get some more trades in to push me closer to where I should be on the risk side.

My account ended April with a Net Asset Value (NAV) of $92,169.78 according to Interactive Brokers (IB) after ending March with a NAV of $90,005.66. I had a gain of $2,164.12 (~2.4%) on paper for April (below the S&P 500’s 3.93% gain for the month). I had $1,664.22 in net realized losses, which includes my two closing trades (loss on my AAPL covered call and a full gain on my MDY naked put), $57.75 in interest and no dividends.

Quicken reported that I have an account value of $92,107.29, which is the same as what IB shows after I add in the $62.49 in interest accruals that IB credits in advance of the actual payment. I subtracted a penny from the rounding error I found a couple months ago to bring my account back into sync with IB.

I’m 97.68% invested in this account as of the end of the month, 1.06 percentage points above the end of March. I have $2,141.77 left in uninvested cash, but it’s misleading as I noted at the top. My MSFT May $115 naked put is worth about a nickel and is almost $15 out of the money. My IWM May $158 covered call is basically at the money, so I should gain $225 in time value over the next two and a half weeks. My XLF May $27 covered call is $0.85 in the money with $0.15 in time value remaining.

I need to go ahead and replace my MSFT naked put since I’m 99% sure it won’t be assigned. I’ll let my IWM covered call run longer to see how it plays out. I’m also content to let my XLF covered call be assigned. It will probably be assigned, but XLF is volatile enough that I’m not messing with it for now. Most likely, I’ll have more than $19,000 to put to work in May and need to get moving on it based on the probabilities of assignments.

This is my asset allocation in my IB account as of the end of April:

– Large-cap ETF: 20.72% (through QQQ)

– Mid-Cap ETFs: 38.52%

– Small-Cap ETF: 17.17%

– International: 4.18%

– Individual Stocks & Other Sector ETFs: 18.56% (most of this is large cap since I have 200 XLF shares, and one MSFT naked put included here)

– Bonds: 0.0%

– Short ETFs: 0.0%

According to Morningstar, here’s how I compare to the major indexes (including dividends) through the last trading day, April 30, 2019:

– Dow Jones: YTD change +14.79%, 12-month change +12.63%

– S&P 500: YTD change +18.25%, 12-month change +13.49%

– NASDAQ Composite: YTD change +22.01%, 12-month change +14.56%

– Russell 2000: YTD change +18.48%, 12-month change +4.61%

– S&P Midcap 400: YTD change +19.09%, 12-month change +6.99%

My return according to Quicken through April 30, 2019:

– YTD Return: +7.65% (not annualized)

– 1 Year Return: -10.56%

The VIX ended the month at 13.12 and the VXN ended at 16.60. The VIX finished April 0.6 points lower than the end of March. The VXN finished 0.02 points lower. The VIX peaked on April 9, when it hit an intraday high of 14.39. The VXN peaked on the same day at 17.82. These readings remain decent levels to sell volatility – not too cheap and not too complacent. I’d rather have volatility a little higher to push premiums up some, but it’s not enough to whine about. Beginning today, we’re in the sell in May and go away period. It hasn’t been a terribly accurate mantra for a few years and yet it’s still worth paying attention to based on its longer historical accuracy.