Month End Summary – May 2019

May wasn’t a good month for stocks, but I finally feel a tiny bit of relief for not being fully invested right now. I didn’t lose as much as the indexes, so that takes the sting away some. I’d rather have held a stock or option that gained value, but it’s better to be underinvested than have another loser on hand.

My account ended May with a Net Asset Value (NAV) of $87,870.63 according to Interactive Brokers (IB) after ending April with a NAV of $92,169.78. I had a loss of $4,299.15 (~4.66%) on paper for May (less than the S&P 500’s 6.58% loss for the month and the Dow’s 6.69% loss). I had $722.11 in net realized gains, which includes my four closing trades (My QQQ naked put premium will be included when the assigned shares sell. I did have gains on my XLF covered call, IWM covered call, and MSFT naked put), $65.40 in interest and no dividends.

Quicken reported that I have an account value of $87787.18, which is the same as what IB shows after I add in the $83.46 in interest accruals that IB credits in advance of the actual payment and after adding another penny to cover a rounding error I couldn’t find.

I’m 83.77% invested in this account as of the end of the month, 13.91 percentage points below the end of April. I have $14,265.46 left in uninvested cash. My XLF June $27 covered calls will probably expire worthless and my MDY June $355 naked puts will most likely be assigned. I’d like to wait for the August contracts to be available before selling new covered calls on these positions, but I could sell July contracts if I decide it’s worth it.

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

– Large-cap ETF: 19.80% (including QQQ)

– Mid-Cap ETFs: 40.40%

– Small-Cap ETF: 16.60%

– International: 4.13%

– Individual Stocks & Other Sector ETFs: 5.92% (Just my 200 XLF shares for now)

– 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, May 31, 2019:

– Dow Jones: YTD change +7.54%, 12-month change +4.05%

– S&P 500: YTD change +10.74%, 12-month change +3.78%

– NASDAQ Composite: YTD change +12.33%, 12-month change +0.15%

– Russell 2000: YTD change +9.26%, 12-month change -9.04%

– S&P Midcap 400: YTD change +9.60%, 12-month change -5.44%

My return according to Quicken through May 31, 2019:

– YTD Return: +5.10% (not annualized)

– 1 Year Return: -13.77%

The VIX ended the month at 18.71 and the VXN ended at 23.23. The VIX finished May 5.59 points higher than the end of April. The VXN finished 6.63 points higher. The VIX peaked on May 13, when it hit an intraday high of 21.32. The VXN peaked on the same day at 25.41. These are good levels to sell volatility, but we have to decide if the higher premiums are worth the added perceived risk in the markets. Until we see a trade deal (maybe with any other country) and the technicals begin to improve for stocks, I’ll probably stay more on the sideline with my 16% cash reserves.