My Trading Account Status 6/28/2014

Here are the holdings in my trading account as of June 28th, 2014.

DescriptionSymbolQuantityDate AcquiredCost BasisMarket Value
TOTAL$16,931.00
AFLAC INCAFL10001/31/14$6,278.95$6,272.00
AFLAC INCAFL8903/27/14$5,540.75$5,582.08
NELNET INC CL ANNI12112/11/13$4,970.79$4,985.20
CASH$91.72

Compared with last week, my total account value dropped $50.04. *Yawns.*  You could say that the best opportunity last week was on Monday 6/23 when AFL still had a high of over $63. But really, nothing  interesting happened last week, so I didn’t make any trades again.



If you haven’t noticed already, I am embedding a real-time stock chart into this post. The widget is useful, not to mention that it looks cool too. It’s available for free from TradingView. No coding needs to be done, you just copy and paste the scripts onto your blog or website.

Patience is a virtue. My real bottom line on 6/28/2014: $16,931.00

Closing My Ally CD Account

If you Google the term “emergency fund,” you will find many articles on what an emergency fund is and why you should start one. I started one in the April of 2013; I opened a 2-year raise your rate CD account with Ally Bank. The opening balance was $7,000 and the beginning annual percentage yield was 1.09%. At that time, I really thought I would not need that sum of money in the next two years.

However, in the April of this year, an investment opportunity came up. This opportunity was one that I really could not pass up. I needed cash, so I had to close my account early. I was searching on the Ally Bank website to see if I could do it online and transfer the balance to my regular bank account. It turned out I needed to call customer service to close the account.

AllyCloseCD2

On 4/21/2014 I gave them a call. Their phone representative asked me a few security questions to verify my identity. After providing her with that information, she then went on to ask me where I want the money to be deposited.  She informed me that my early withdrawal penalty came out to be about $12.57 (60 days of interest) and the money will be in my non ally bank account on Tuesday 4/29 the latest. Much to my surprise, my regular bank account was credited on 4/23 in the amount of $7,066.25. It took only two days, way sooner than I expected. That was it. The entire process was quick and simple.

During the coming tax season, I will have to report the interest that is accrued in 2014 on my 2014 tax return. The good news is, the early withdrawal penalty is tax deductible. It will be an adjustment to income:

1040Penalty

Closing out the account got me to wonder if opening a CD account was a mistake in the first place. Stocks had done very well in 2013. The S&P 500 had an annual percentage gain of ~30%. I am not saying that I definitely could have beaten the S&P500. But had I invested the $7,000 in stocks rather than a CD, I think I would have done better than $66.25. Hindsight is always 20/20 though. I was looking for a safe place to put my emergency fund. The stock market may have a higher reward, but it also has a higher risk. It is not the place to put an emergency fund (no matter how tempting it may be).

What if I put the $7,000 in an Ally Savings account instead? How much interest would I have lose out? For simplicity, let’s assume that (1) the CD does reach maturity and (2) the rate remains at 1.09% for the entire 2-years.

2-year raise your rate CD, 1.09% annual percentage yield:

\$7,000(1+\frac{1.09\%}{365})^{(2)(365)}=\$7,154.27

Ally Savings, 0.87% annual percentage yield:

\$7,000(1+\frac{0.87\%}{365})^{(2)(365)}=\$7,122.86

The difference is $31.41. So had I put my money in Ally Savings instead, the most I could lose out is around thirty something dollars.

With the early withdrawal, what actually happened was that the $7,000 was in the CD account for a total of 378 days. If I put the money in an Ally Savings account, I would have gotten approximately $61.62 of interest. This is slightly less than the $66.25 that I actually received, but would have given me better access to my money. (Trust me, there were many days in 2013 where I just want to close out the account and invest in the stock market.) The difference is small enough that I am not sure if putting my money in a CD is a smart move after all.

Maybe my mistake was putting too much money into the CD. Maybe I should have just put $1,000~$2,000 into the CD and the rest into my savings account. I am trying to save up an emergency fund again. This time, when I have accumulated a nice sum of money (say $5,000-$7,000), I won’t put it in a CD. Don’t get me wrong though, I like Ally Bank, I still have a savings account with them. The rates on their CDs are very competitive with similar products out there. It’s just that a CD is not a financial instrument that fits my financial needs given the current interest environment.

My Trading Account Status 6/21/2014

Here are the holdings in my trading account as of 6/21/2014:

DescriptionSymbolQuantityDate AcquiredCost BasisMarket Value
TOTAL$16,981.04
AFLAC INCAFL10001/31/14$6,278.95$6,310.00
AFLAC INCAFL8903/27/14$5,540.75$5,615.90
NELNET INC CL ANNI12112/11/13$4,970.79$4,963.42
CASH$91.72

I didn’t make any trades this past week, so there is nothing exciting to report here. Both NNI and AFL went up since my last update, but only AFL moved back into unrealized gain territory.

AFL has been hovering around my acquisition price since April. I am tempted to take advantage of this price hovering by selling the 100 share lot with just a bit of gain, then buying them back when the price drops again. But I always have the feeling that the price will keep on going up once I sell (Don’t we all?). For now, there is really no clear signal to sell. The last selling opportunity (for the 100 share lot) was during 3/7 – 3/11 when the price was between 64.73-66.01. Perhaps my emotions are getting the best of me. This is why I need this blog, to work out my thoughts and to keep my emotions and impulses in check. I will hold my shares until a clear selling opportunity arises.

I do have something related to report here. On 6/20 I sold COH at a loss for $34.69 a share (with a cost basis of $41.97. Ouch!) in my investment account. This has nothing to do with my trading account right? But if I buy COH in my trading account for the 30 days period after 6/20, I won’t be able to claim the loss on my 2014 tax return.

Am I planning on repurchasing any shares of COH after the 30 days period? Well, there are a couple things on my mind:

  1. The current dividend yield is 3.89%. If the price drops even lower, the dividend yield would become very attractive. We will have to see if management is going to maintain the same level of dividend payout.
  2. COH started this year at around $56 a share. As of this writing, the market price is $34.73. I believe the price will have selling pressure for the rest of this year from people who are looking to harvest tax loss. I don’t foresee the price of COH moving up significantly any time soon. On the contrary, I think (though I might be wrong) it may going well under my exit price of $34.69.
  3. In the case where the price does climb back up to the $40+ range from now until 7/20, I will have to just swallow my pride and move on to another stock.
  4. I can repurchase COH in my investment account or in my trading account (or maybe both). However, I only have $91.72 of cash in my trading account now. I will either have to fund my account or sell of my current holdings to repurchase shares of COH.

So the answer is: It depends. There are many factors to consider, but if I do repurchase COH, I have to be careful not to buy any shares of COH until after 7/20.

My real bottom line on 6/21/2014: $16,981.04

 

How I came to choose Bluehost for my web hosting and how much it cost

Do you want to self-host your blog or website but (1) you do not know which web hosting company you should choose, and (2) you are not sure how much it will cost?

There are plenty of reviews out there already. If you are interested in reading reviews, here are a few:

HostingReview360
Reztdesign
HostÜcan
WebmasterFAQs
Hosting Kingdom

When I was trying to decide between HostGator and Bluehost, I spent many hours (over the course of several days) reading online reviews. Oddly enough, the deciding factor for me was learning that they are both owned by Endurance International Group. I figure that if they are owned by the same entity, any difference between HostGator and Bluehost is not going to be significant. Since Bluehost is what WordPress recommends, and it is what I first came across anyway, I went with Bluehost. Had I gone with HostGator, I bet it would fit my web hosting needs just as well.

At the time of this writing, Bluehost is advertizing on their website that their cost is only $3.95 a month. Doesn’t sound expensive right? Ever wonder how much you would be charged at checkout? Well, here’s the breakdown for me:

DescriptionDurationUnit PriceLine Total
Total at checkout$232.15
Web Hosting36 mos$3.95/month$142.20
Site Backup Pro3 years$19.99/year$59.97
SiteLock Domain Security1 year$19.99/year$19.99
Domain Privacy Protection1 year$9.99/year$9.99
Domain Name Registration1 year$11.99/year$11.99
Registration Coupon1 year($11.99)/year($11.99)

The bare minimum you will need to start a website are the domain registration and the web hosting service. The domain registration can be done elsewhere, but I register through Bluehost because it’s “free.” As you can see in the last two line items on the table above, they charged and credit me for the same amount. The net amount comes out to be $0, but that only covers the first year. When it is time to renew next year, I will have to pay $11.99 to renew my domain name.

I could have opted out of other features had I wanted to save a little bit of money, but these features are useful if not essential. Not signing up for them may cost me more headaches in the long run.

The Site Backup Pro lets you backup or restore your website files. This blog doesn’t have much content yet, but as more content is added, this backup feature will give me a peace of mind.

Domain privacy protection is a must have in my opinion. When you buy a domain name you have to provide your contact information such as your name, address, email, and etc. This information will be made publicly available through the WHOIS database. I do NOT want to increase the volume of junk mail in my email and at my home. Signing up for domain privacy protection is a no brainer.

I can afford to spend $232.15, but two hundred something dollars can be a lot of money for some folks. If you can afford ~$230 however, don’t let the cost deter you from starting your blog or website. Pick a well established web hosting company and just go with it.  Do some research, but don’t spend too much time researching to the point where you keep on putting off taking that first step. Like that old Chinese saying goes: A journey of a thousand miles begins with a single step.

My Real Bottom Line: ($232.15). I am also expecting to shell out another ~$61.96 next year. I understand that there will be more cost as a blog/website grows (such as buying a professional WordPress theme), but I will worry about those costs in the future…. if this blog ever grows.

 

My Trading Account Status 6/14/2014

Here are my holdings in my trading account as of June 14th, 2014.

DescriptionSymbolQuantityDate AcquiredCost BasisMarket Value
TOTAL$16,730.49
AFLAC INCAFL10001/31/14$6,278.95$6,196.00
AFLAC INCAFL8903/27/14$5,540.75$5,514.44
NELNET INC CL ANNI12112/11/13$4,970.79$4,928.33
CASH$91.72

What a difference a couple days make. The Dow Jones Industrial Average dropped 102 points on 6/11 and another 110 points on 6/12. It did recover 41 points and a half on Friday 6/13, but the two triple digit drops were enough to wipe out my unrealized gains and bring me into unrealized loss territory.

Do I have an exit plan? Well, no. I know traders are supposed to have some sort of an exit plan to minimize their losses. They would take the loss and find another trading opportunity. As long as their gains for the year outweigh their losses, they would be making money.  Maybe I should devise some exit plan, but I am not worried about selling any of my holdings now just because they are all priced below the cost basis.  The unrealized loss on all my holdings are still under 5% (maybe I’ll consider that as the exit signal).

To be honest, I do not mind holding AFL or NNI for the long term. (Did I not mention that I am an investor at heart?) Currently AFL has a P/E ratio of 9.60 and NNI has a P/E ratio of 6.20. I consider both to be cheap, i.e. they are still well undervalued. Perhaps this is just another case of “Emotion Determines Market Price.” Plus, the dividend yield is 2.39% and 0.98% for AFL and NNI respectively. Even if their market price continue to stagnate I would still be receiving some dividend income.

Speaking of dividend income, I received a payment of $12.10 on 6/13 for my 121 shares of NNI. That explains the slight increase in my cash balance when compared with my last update.

My real bottom line on 6/14/2014: $16,730.49