- I have a lot of trades in my portfolio over the last 11 months, so I include them all here rather than in the main article.
- COVID-19 and its impact caused me to have to realign my portfolio.
- Many companies that I owned cut or eliminated dividends this year, but I still managed to collect more dividends than last year.
Normally I publish several articles detailing my portfolio and the transactions I make in it. However, due to a number of factors this year, I have so far only written one article. And that article just covered the portfolio to the beginning of 2020. For those interested in a full list of all of the articles I have written on my portfolio, it can be found here.
Given both the length or the last article, and the number of trades I have made in the portfolio this year, this blog will contain a full list of all the trades. I am writing an article about the portfolio this year, and it will contain a link to this post as well.
I typically look to buy securities at a good value that offer attractive dividends that are sustainable. I look for a mix of securities that offer some combination of high dividends and high dividend growth.
The trades here cover the period from the start of 2020 to the end of November.
I use options to increase my cash flow (so I can buy more dividend-paying stocks) and to get shares at a better deal than the market is currently offering.
I write covered calls to squeeze more cash flow out of a position. I pick contracts that have a low Delta (a low chance of expiring ITM) that pay at least half of the pro-rated dividend.
I write cash-secured puts to get a better deal than the market is offering. So I first look to get more premium from writing the put that the stock would pay in dividends over the life of the contract. Then I look at the strike price and want to get the shares assigned at a price below market. That way I win either way. If I get assigned the shares, I get my price and I don't miss out on the dividends while I waited (and in fact might get more than the dividends). If I don't get assigned the shares, I still collected at least as much income as I would have collected had I bought the shares rather than waited.
My first options trade of the year was to roll some puts I had on WPG out 3 more months. I collected 18 cents of premium per share for this. At the time, WPG was still paying its 25 cents quarterly dividend. So it might look like I didn't collect as much as the pro-rated dividend. But at the time, WPG was trading around $3.50 a share. So on the $2.50 a share I had to set aside when I wrote this put (that is the cash in cash-secured put), I got the same yield as if I bought the shares. And as we all know, WPG had eliminated its dividend before the new contracts expired, so I go an even better deal with the put than if I had bought the shares at the time I wrote these put contracts.
Analyst's Disclosure: I am/we are long PEI.PC.
All securities listed are ones that I bought or sold during the year.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.