As part of my commitment to keep my readers up to date on my stock portfolio and my options, I write up short posts describing my transactions. Recently, I sold a few put options and bought a few stocks. So here we go. I’m going to rock with the narrative format since it’s fun to write and you guys and gals seemed to enjoy the last one.
So June… What can I say about June? Well it’s a pretty awesome month for me money wise. I got my regular investment capital and I got my annual bonus. Yay for bonuses! After getting my bonus I predictably had a long internal debate about how much of it to save and how much to spend on fun stuff. I elected to save 58.11%. Why? Because that left me with $3,500 for fun, which is a nice round number. Note: I am not a particularly fun person, so this money will probably just be invested later.
Enough rambling about money, onto rambling about stocks. Which is kind of like rambling about money.
The market has been severely overvalued for a while. There was really only two sectors that could passably be considered to be in value territory. 1) Energy. 2) REITs. And given that I just dumped a bunch of money into CVX last month…. I think you know where this is going. REIT-mania here we come.
It just so happens that the market was spazing out and beating down REITs at the time. Big drops in Digital Realty (DLR) and Realty Income (O). The first thing I did was sell put options against DLR and O.
- Digital Realty Trust (DLR) Jan 18 2014 $55.0 Put – This brought in $389.22.
- Realty Income (O) Dec 21 2013 $40.0 Put – This brought in $189.22.
Why stop at just selling a put. Let’s buy some stocks. Keeping with the theme of REITs I bought some O and some DLR.
Digital Realty Trust (DLR)
- 59 shares
- Cost basis: $3,549.99 or $60.17 per share
- Yield: 5.185%
- Dividends: $3.12 per share
- This will increase my yearly dividend stream by $184.08
Realty Income (O)
- 82 shares
- Cost basis: $3,607.48 or $43.99 per share
- Yield: 4.93%
- Dividends: $2.17 per share
- This will increase my yearly dividend stream by $177.94
In total I have increased my yearly dividend stream by $362.02 with these purchases. Not too bad. Of course, as soon as I finished buying the stock prices of both DLR and O started dropping even more. Such is my luck, but I’m not too worried. Let the market do what it will, these companies have great underlying fundamentals and were good values at the time.
Disclosure: I am long or short everything discussed as indicated.
Readers: What do you think of these purchases?