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Posts Tagged ‘Seadrill’

Dividend Income Report for Q2 of 2012

I am really excited to write this dividend income report especially after having put together the numbers.  As you know (or maybe you don’t), it has been my goal to increase the dividend income coming into my retirement account and get familiar with dividend investing as a prelude to retirement.  It has been my belief that I shouldn’t be saving with the goal of living off my savings when I retire.  Rather, I plan on investing in assets that produce income and living off that income.

My goal for the first quarter was $1500 which I was able to meet.  For this quarter, that amount was increased by $300 meaning that I was supposed to make $1800 during these past 3 months.  I planned on being able to increase the dividend payments because I am moving from stocks that don’t pay dividends to stocks that do and increasing the amount that I have invested in those stocks by selling covered calls and using the proceeds to buy more stock.

First, check out the graph of the results:

 

My Dividend Income for Last 2 Years

As you can see, there has been a great increase since making a conscious effort to focus on dividend income.  You can also see that I met my goal of $1800 for the quarter.  In fact, I crushed it with $2143.23!  That is over $700 per month in passive income during a time when the stocks in my portfolio didn’t do all that well.

But it really doesn’t matter if the stocks do very well or not.  When it comes to retirement income, I am looking for solid companies that will be sending out a steady income stream.  I just need to make sure that the worst case scenario (company bankruptcy) doesn’t hurt the portfolio too much.  Otherwise, I should expect some ups and downs in the value of the portfolio, but consistent dividend payments.

Now this quarter, I have a goal of getting $2100.  It seems like that should be pretty easy, but I did get two dividend payments from Silver Wheaton during the quarter (not exactly sure why) and an extra small dividend from Seadrill.  Those payments will have to be made up with additional shares.  But I did add some Nucor stock which should help with that.  I am fairly confident that I can make it to my next target.

I can’t wait for the next report!

 

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24 comments - What do you think?  Posted by Cash Flow Mantra - July 2, 2012 at 6:30 am

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Options Expired Today and Two Busy Weeks

Well, the past two weeks have been incredibly busy and it feels like I am doing all I can to keep my head above water, but it feels like it isn’t working.  Last week, I put in 75 hours and work.  This week, I was out of town yesterday and today and was very busy during the day with minimal internet access.  Now, it is 11 pm in the hotel so I will be making this short so that I can get some sleep.

Options Expired Today

Today was options expiration which will end up being a good thing for me since I have some puts that will be exercised.  The most important one for me is the ONXX $46 strike puts which I purchased a few weeks back when ONXX was making a spike in price (back when the DOW was over 13,000).  I did this because I could lock in a profit compared to my basis.

Well, ONXX closed today at $41.82 so I will be selling those shares for $46!  Yippee!  Now I plan on picking up some Nucor shares next week since that is part of my dividend plan.  I will still have a few ONXX shares left so I purchased some additional June $38 puts today.  I will have to let you know what the new basis becomes, but it will likely be close to $42 per share.  Then I could sell the June $42 calls and end up with a profit if called.

I will also sell some DRYS and SLW shares as well when their puts get exercised.  I will be replacing those shares at a cheaper price so will be able to profit by the price differential.  This is what the summer will likely be about.  Hopefully, it won’t be a repeat of 2008, but you just never know so it helps to have a plan.

Carnivals

Here are some carnivals that have featured my three blogs:

Totally Money Carnival #64 - CFM
Financial Carnival for Young Adults #9 - PT
Carnival of Money Pros - CFM, GPM, PT

Carnival of Financial Camaraderie #30 - PT

Plus a few more:

Carnival of Retirement #19 - CFM, PT
Yakezie Carnival – My Momma Told Me Edition - CFM
Carnival of Money Pros - GPM
Festival of Frugality #337   - PT
I hope everyone has a good weekend.  It will be an interesting summer watching what happens with Europe and the stock market.  I hope to take advantage of some volatility.
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Be the first to comment - What do you think?  Posted by Cash Flow Mantra - May 18, 2012 at 11:22 pm

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What is the Gold Market Trying to Tell Us?

Regular readers of this blog may or may not know that I follow the gold market fairly closely.  I am not a gold bug per se, but I do feel that gold is a decent store of wealth as opposed to the greatest investment as some would have you believe.  On the other hand, I don’t think that it should be dismissed entirely since it can have some purpose in a broad investment portfolio.

If you have been watching the gold market recently, you have probably noticed that the price has dipped below $1600 per ounce.  The gold market has historically been one that has been responsive to inflation expectations due to money supply or geopolitical concerns or even financial crises and a loss of confidence in fiat currency.

But with the gold price having backed off from a high of over $1900 per ounce last August and September, is there something that we should be expecting?

Global Industrial Slowdown?

Here is a recently published article that suggests gold is correlated with global industrial production.  That would seem to make sense as inflation, while technically a monetary phenomenon, seems to respond as a result of increased demand as well.  When the labor pool is tight, wages increase leading to a broad increase in prices.  Likewise, when the cost of oil and transportation and all the other goods that use oil in production increases, the gold market seems to respond to those inflation expectations.

If this is the case, one has to wonder whether the gold market is foretelling some global economic slowdown.  Is there another recession on the horizon?  Is China slowing down and are concerns about growth coming from that area of the world?  Is Europe really going to become a major headache?

On the other hand, is it simply the fact that there is no sign of inflation in the near future and that growth will continue albeit at a more moderate pace?  Is this simply a period of consolidation in the gold market?

There is a seasonality to the gold price and summer tends to be a slow time in regards to the price.  Is this a factor in the current pull back?  Will the price for an ounce of gold make another strong run in the fall?

To be perfectly honest, I really don’t have a clue.  So, what am I doing with this information?

Buying More Silver Wheaton Stock

I am buying more Silver Wheaton stock.  Silver typically follows the gold price although with some added volatility.  This has provided me a decent opportunity to purchase some more SLW which should make a nice rebound should seasonal factors be playing a role or should global economic activity improve.

I have already increased my share count by 6.5% this past month and am looking to add some more when I sell some calls and collect the premium.  Hopefully, I will have enough cash to do this during June.  I should be collecting some dividends from Seadrill and AK Steel during the month of June so that should help with the needed cash.

The key will be to maintain patience and add to positions when the stocks are down and pare back when they spike.  I plan on using the same technique with Silver Wheaton and by extension, the price of gold and silver.

What do you think is happening with the gold market?

 

 

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8 comments - What do you think?  Posted by Cash Flow Mantra - May 11, 2012 at 12:33 pm

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