Paid $14.0899/share for a 1.25% position. She also has a 3.66% holding in GM.
F trades at about 7 times earnings and has a dividend yield over 4% but they could easily raise it 50% if they desired. She'll sell call options if F rallies above 16 in the next few months. F should be trading closer to 20 than 14.
In the old days this couldn't be done due to the high cost of commissions.
Due to Grandma's medical costs, gains on stocks and taxes are no longer an issue-much like all the IRAs I'm investing. She now has a fulltime caregiver that eats away all her stock gains.
Over the next few months she has a few stocks the could/should be called away due to call options that are currently in the $$$. In late June I'll list her top 10 holdings and also double her monthly distribution check.
Sold these in IRA #2 a few days ago--BERKSHIRE HATHAWAY 12/16/2016 $165.00 Call--paid $.9/share.
Also bought more GOOG 697/share in same account. GOOG is now a 1.3% position.
IRA #1-STX shares put to me at a large loss-opt adj cost is 32.33/sh and potential gains are limited to 33 through Jan 2017.
STX is now 5.7% of the assets in this account making it 2nd largest position.
Current price of STX is 26 and it has a quarterly dividend of .63/share.
Today with PM trading down $.32/share to 96.6, she sold these-PHILIP MORRIS INTL 5/20/2016 $98.00 Call
Grandma needs both income and $$$ to pay medical bills so she needs to sell all her overpriced stocks.
Added a few shares using $$$ reserves in IRA #1-- tripling my stake to .6% of the assets in this account. Paid 51.28/share. If it continues to fall I'll buy more next week and sell call options.
Also sold puts against SBUX-July-55 put opt-- paid 1.45/share which is just under 1% per month for a company with double digit earnings growth trading at about 25 times earnings.
Grandma may have to take back her new Caddy because PM has dropped under 97.
But her GM shares should survive.
I sold the above call options in IRA #2 for a 1.1% premium over the next 6 months. Dividend yield is currently 3% for WFC.
I was looking at Corp bonds today and there's nothing out there worth buying. 10 year CDs are down to 2.1%Goldman Sachs Bk USA US 2.1% CD 04/27/2026------Less than 2 years ago I bought these-CIT Bank 3.25% CD 07/30/2024--and I thought they were bad.
This account is currently 4% $$$. Anything over 5% and I'll look to buy more stock and sell call options or hold my nose and buy more preferred stock which currently make up about 8% of the portfolio.
IRAs #1 and 4 bought more. Opt adj cost of new shares is 26 and 24.5/share with potential gains limited to 28 and 27 through June opt expiration.
Also doubled shares in BANK AMER CORP 7.25%CNV PFD to 2% for IRA #1. This account is still 28% $$.
Bought more STX in account #3-my personal acc, for 26.62/sh.
I have an order in to sell call opt that may fill today. Current average cost per share of all my shares is about 28/sh in this acc.
IRA #2 bought- STX- $28.82/share and sold 5/20/2016 $30.00 Call.
Net opt adj cost of new shares-27.29/share. It goes XD $.63 in late April.
STX now makes up 3.5% of the assets in this account.
3.5% if called in 11.3 weeks. She could earn 3.5% 4.6 times in the next year and there's the dividend.
If SPY goes up 1% per quarter and pays .5% in dividends and another 2%/quarter in opt premiums perhaps you'll understand her strategy.