October was another good month for me and those investors who are not short the market. I know I sound like a broken record. I did well, but could’ve done better if I had invested more and taken more risks. Not being fully invested during a bull market is begging for missed opportunities each month. The Dow gained 4.34% in October and the S&P 500 gained 2.22%. I wasn’t close to those returns thanks to my cautious approach. I’ve pretty much written off this year as a transition year and am just trying to make it through December with a reasonable gain. I plan to come out fighting (aka trading) hard in 2018 and hope not to time my more aggressive trading with an overdue correction.
My account ended October with a Net Asset Value (NAV) of $105,711.65 according to Interactive Brokers (IB) after finishing September with an NAV of $104,502.82. I had a gain of $1,208.83 (~1.16%) on paper for October and had $656.954 in realized gains from my four closing trades on my AAPL, IWM, and QQQ naked puts. I received $52.00 in interest, but no dividends in October since I’m not long shares of anything yet. Quicken reported that I have an account value of $105,659.01, which is the same as what IB says I have after adding $0.02 to Quicken from rounding errors and the $52.64 in accrued interest that IB is crediting for me.
I’m 78.29% invested in this account, 0.77 percentage points below the end of September. Most of that tiny change is due to my account balance being higher and lowering my AAPL naked put strike by $5.00. I know the rest of this week will be too busy for me to make new trades in my account, but hope to get to something new by the middle of next week.
This is my asset allocation in my IB account as of the end of October:
- Large-cap ETF: 0.0%
- Mid-Cap ETFs: 30.29%
- Small-Cap ETF: 12.97%
- International: 0.0%
- Individual Stocks & Other Sector ETFs: 35.68% (pretty much large cap really with ADI, QQQ, and AAPL 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 month’s last trading day, September 29, 2017:
- Dow Jones Return: YTD change +20.58%, 1-year change +32.07%
- S&P 500 Return: YTD change +16.91%, 1-year change +23.63%
- NASDAQ Composite Return: YTD change +24.98%, 1-year change +29.65%
- Russell 2000: YTD change +11.89%, 1-year change +27.85%
- S&P Midcap 400: YTD change +11.88%, 1-year change +23.48%
These are my returns according to Quicken from February 1, 2017 (when I established new account, albeit with very few trades for a few months leading up to my divorce in June) through October 31, 2017:
- YTD Return: +5.66% (not annualized)
- 1 Year Return: +7.26% (annualized until I have a year of data)
The VIX ended the month at 10.18 and the VXN ended at 15.06. The VIX is 0.63 points lower than at the end of September and the VXN is 0.08 points higher than the end of September. Both volatility measures finished October below the highs hit in the last few days of the month – 11.30 for the VIX and 16.31 for the VXN. Even with my fear of the downside risks, I should’ve bought a put and bought shares of some more ETFs. Or, the equivalent would be to buy a call. Maybe I’ll do that before long.