Year In Review and Looking Forward

With a new year should come a moment of reflection on ones past and contemplation on the future. The same should be said about ones investing. In light of that, here is my year in review and my plan for the coming year.

Last year I opened and closed a total of 28 positions. Out of the 28 positions, 15 of them resulted in profits and 13 of them resulted in loses. This tells me that I am just barely better than 50% right. Unfortunately, when my choices are bad, they are really bad. My 15 profitable choices only earned me $764.25, while my 13 losers has cost me $1,538.68. That results in a net loss of $774.43. And on top of that, some of it cannot be written off because they qualify as wash-sales.

The reasons vary for my bad performance. Some were because of poor analysis, some because I got greedy and didn't take the profit when I had the chance; some because I didn't set my entries or stops properly. This year I have to pick a plan and stick with it. As a result of my getting out of debt last year, I now have extra capital I can devote to my portfolio.

The plan for this year is as follows:

• Only pick from stocks that have options; being a dividend paying stock is a plus.
• Sell cash secured put options for the stocks that I would like to own.
• For stocks I own, sell call options against them at a price higher than I BTO.

With this new plan in place I set a few orders last night and today one of them executed. I sold 1 of the DWA Feb 19 2011 $30.00 puts against a sum of $3000. Although DWA has been on a bearish trend and had a bearish day today, I don't believe it will continue going down for much longer. Even if I do get exercised into the position, I believe there will be an eventual turn around, and I will be able to profit from the capital gains.
That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com/
 
BTO - bought-to-open / buy-to-open
DWA - Dreamworks Animation SKG, Inc.