I had a 6 months window of low commissions with my bank that I wished to exploit to the maximum before it ended on November 30, 2010. Based on the results so far, I believe to have exceeded my own ROI (Return On Investment) expectations with the HELOC portfolio. I am happy to announce the end of combat operations as the deadline has been reached. ??This is only the end of a campaign, not the end of the war.
In the summer of 2010, I did not buy the doom and gloom that was prevailing. I never believed for a second that a global economic meltdown was in the cards where the world economy as we know it was coming to an end. The market had been beaten up and I wanted to capitalize on this weakness following a major fat fingering event in May.
I laid out my case in detail at the time with 2 posts in the beginning of July followed by introducing my HELOC portfolio as it was taking shape:
- Stock Market Gambling: The 1 and Only Bet
- Stock Market Gambling: The Plan to Profit
- Introducing the HELOC Portfolio
I hate to use the word gambling so I strongly urge you to read the above posts to know where I stand on this. The only gambling I undertake is spending $20 in the Montreal casino once every couple of years as a token charity towards the Government of Quebec which suffers from chronic budget deficits every year.
In this short period of time, I successfully created a dividend stream that currently covers both my HELOC interest and my margin interest if any. My dividends payers are Daylight Resources, Artis REIT, Perpetual Energy and Avenir Diversified Income Trust (converting to a corporation soon).
Dividend income will be stable at $157 per month for 2011 unless new dividend payers get added. Interest expense for my HELOC is $47 per month and up to $25 per month for stocks bought on margin. Providing fundamentals remain solid on a company level, market noise will be ignored.
For 2010, I expect the return on investment in my HELOC account to be potentially anywhere between 50% and 70% for 7 months of operations since the HELOC portfolio started taking shape in May. Here is the latest performance graph:
The inflows represent $18,500 gradually transferred from my HELOC for investment purposes. The numbers are looking great for 2010 but it does not guarantee a 2011 with similar results. This is the stock market where one should never underestimate the task at hand. The one thing that is guaranteed to remain strong in 2011 is my continuous research in order to identify what I deem to be the next profit opportunity.
I thought it would be interesting to look back at the completed trades that have taken place so far including the 2 last ones for IPT and SPE:
The total comes out to 21 trades with only 1 ending in the red. PTQ is currently trading above $1 and I bought and sold it on the same day because emotions interfered. My due diligence was not as deep as it should have been which gave my emotions the upper hand. Usually, when my due diligence is complete I trust what my excel spreadsheet tells me and act on it leaving no holes for emotions to creep through.
Many of the stocks above such as GPR and PXL would have made great core positions into the year but I have repeatedly complained about the problem of never having enough money to hold them all. Hence, I had to resort to my HELOC Stock Market Investment Strategy to ensure maximum results. Some people criticized me for this fast paced approach because they never understood the context. In the end, the numbers speak for themselves in justifying this approach.
A new campaign is being planned for 2011. There will be a post about the new objectives once everything is in place. Until then, the HELOC portfolio is still active since I discovered today that because I racked up more than 30 trades within 3 months, my low commissions were extended for December. As such, I already acted on it by buying 2 new stocks in my account that I will unveil tomorrow.