Sector Watch & My Kids Portfolio : Passive Income Report January & February 2019

Just got back from another busy week in the USA where I got to experience snow again. Swiping the snow from the car with a snow brush, wasn’t something I expected to do anymore this year after leaving Belgium in spring weather with 18 degrees. In Canada they got last week 25 cm of snow. Winter is not over yet in other parts of the world.

 

So let’s move on to our Kids Portfolio. A portfolio I started with 10.000 Euro. We will grow this portfolio as an emergency fund for the kids and as big as possible.

Market Sentiment and Sector Watch

The market sentiment is bullish and we have seen an incredible rebound since the selloff around Christmas 2018. The market sentiment to buy stocks seems to be topping…

 

Let’s take a look at the Sector Watch. Here we look which sectors we should invest in and what is different compared to last month. We placed the latest Sector Watch graph below…This always allows you to make your own analysis.

Commodities (XLB) and Financials (XLF) have been recovering from the lows. All sectors except Energy has seen a bullish trend after the december dip. 

 

                           

When we do a comparison in the Financial ETFs, we see that over 1 year XLF Financial is still 6% negative. We have seen from all ETFs a strong bounce since end of December 2018. The best ETF was the Real Estate ETF. Be invested in strong ETFs

Be aware we are not a financial advisor. Execute your own risk analysis and investment research. Read our disclaimer. We hope this sector review was useful for you to understand market opportunities and how we analyse potential opportunities.

Let’s dive in the passive income update for my kids portfolio.

Passive Income Update

During the month of January and February 2019, we received 99,76$ passive income and 568,62$ options premium. This gives us a total of 668,38$ to start the year…

So what magic did I apply in my options trading ?

Options Trade review

So I decided that I wanted to own some Mining stocks. As I can’t buy the JNUG ETF directly, I can sell puts and maybe I get assigned going forward. If not, I keep the premium. So I did sell some puts on the Bullish Junior Mining ETF JNUG. I sold in February 1 Put 9$ with expiry date 15 March. I sold 2 puts for April expiry date at 12 and 1 put for expiry date in May with strike 12.

So what happens if the price of JNUG drops below 12 or 9 $. No problem….please give me the 100 shares. (avoiding the stupid PRIIPS regulation)

In total I already received 568$ premium so I am buying with a big discount. The 12$ strike will result in a 10,6$ average purchase price. The 9$ strike will result in an 8$ average purchase price.

What’s my reasoning ? Have you looked at the chart of JNUG ? What was the highest price on the chart ? Around 850$ ..right !

So if we buy 400 shares and one day it hits 850$, we turned a 4000$ investment in 340.000$. I will be happy with less too..

That will never happen I hear you…you can predict the future ? Who knows. This kids portfolio is a long term investment and I can grow my cash flow (if assigned) with writing covered calls.

Going forward

We already realized 668,38$ in this portfolio. Next milestone is March 15. We will see if we get assigned our first 100 shares. If not, I will repeat this process. I will sell 1 put to received at least 100$.

My goal is to repeat this process each month dependent on our cash flow availability. The portfolio has a nice cash flow position of almost 5.000$ so let’s grow our cash in our kids pockets.

This is the end of our blogpost. Did you realize 668$ for your kids in two months ? No ? Then you should start investing in your own knowledge. Putting your money on a savings account is not a strategy to grow your kids money.

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