Monthly Performance Report for
Net Current Yield
Yield and Return
- Snider Method Yield
- Snider Method Return
- S&P 500 Return
|Yield Summary||Year to Date|
|Interest & Dividends|
|Net Current Yield|
|Contributions/Distributions This Month|
|Cumulative Net Current Yield|
The market value of all the securities in your portfolio plus the cash.
Asset management fees that you incurred, but haven't been billed yet.
The Net Current Yield as an annualized percentage of your Stake. Obtained by taking your Net Current Yield for the month, dividing it by your Stake for the month and multiplying the number by 12.
The purchase price of all the securities in your portfolio plus the cash.
Fees the broker charges to take your stock and option orders to the market.
The difference between the purchase price and sale price of your stock once the position is closed.
Cumulative Net Current Yield
The sum of each month's Net Current Yield since Snider Advisors began managing your account.
Interest & Dividends
Interest earned from cash in the account (or margin interest charged by the broker if the account is in margin). Plus dividends paid as a result of owning specific stocks.
Net Current Yield
The income from option premiums, interest and dividends, plus the realized gain (or minus the realized loss) from stocks in all closed positions, minus commissions paid for stock and option transactions and management fees. This amount does not equal your taxable income.
All your deposits to the accounts managed by Snider Advisors minus any withdrawals you have made from these accounts. If you pay your fees directly to Snider Advisors, these fees are considered contributions to your account.
The cash derived from the sale of options expiring in October 2008. These options were sold in the previous Trade Day.
Your initial investment plus any subsequent investments and minus any withdrawals, plus interest and dividends, plus the profit from any closed position, minus asset management fees. Commissions reduce the profit from closed positions.
The amount of income you need to show on your tax return (for taxable accounts). This is calculated using different rules than the Current Yield.
Unrealized Loss (or Gain)
The difference between the purchase price of a security and the price you could get by liquidating the security.
|Jesse Anderson, CFA|
The Fine Print
The yield calculation is different than the return calculation shown by most investment advisors. The yield is approximately equal to the total return if and when a position closes. While the position is open, there is typically some amount of unrealized loss. The total return measurement would include these losses and so would be lower than the yield. The rules of the Snider Investment Method prohibit selling stocks at a loss, but this does not limit or prevent the accumulation of unrealized losses which are not included in the yield calculation. These unrealized losses could persist indefinitely and may never be reflected in your net current yield.
The yield includes option premiums, interest, dividends, and realized gains or losses from closed positions, but excludes unrealized gains or losses from open positions. Brokerage commissions are deducted before calculating both the gross and net yield. The net yield has the asset management fees deducted. The percentage yield is the yield for the month divided by the stake multiplied by 12. The stake is all contributions minus withdrawals, plus the profits or minus the losses from any closed positions. For a complete discussion of the calculation of yield, please see the Performance Discussion page on our website.
The yield figures are unaudited and are subject to change. The information contained herein is current as of the date hereof, but may become outdated or subsequently may change. Past performance is no predictor of future results. All investments involve risk, including possible loss of principal.
Please Update Asset Management Agreement
We recently added a new electronic contract tool to our website to capture your signature and store all our contracts. It will allow us to keep your contract language consistent across all levels of service and quickly provide notifications of updates to your agreement.
Most of our agreements date back to when you originally signed up for Asset Management services. That means for some clients it was done on paper back in 2002! Due to rule changes, recommendations from compliance consultants, and best practice recommendations from regulators, we've made many slight adjustments to the contract to keep it up-to-date. In combination with some language adjustments and our new electronic contract tool, we are asking you to update your agreement. You can follow this link to complete the process.
Keep in mind, there are NO changes in the fees or terms of your service.
If your profile and suitability information is out of date, you will also be asked to provide any updates. As an SEC-registered investment advisor, we are required to know our client and receive regular updates about their financial situation and investment objectives.
Thank you in advance for your prompt attention to this matter. And of course, we truly appreciate your business and on-going support.Update Agreement
Welcome to 2020 and a brand new decade!
Each year I take some additional time to provide some investment commentary along with your annual report. This year’s note will include a review of 2019 and an outlook for the new year.
2019 proved to be a consistent year for the Snider Investment Method. Overall, it was a good year for all asset classes. The stock market performed particularly well with the S&P 500 gains exceeding 30%. This figure is slightly deceptive because some of those gains were simply a rebound from the steep declines at the end of 2018.
If you recall, 2018 ended on a sour note. After strong gains for the first 9 months, the markets fell hard and fast in the final three. At their lows, many stock market indexes had declined by nearly 20%. If you revisited my year-end note from 2018, you’ll notice much of the focus was on easing the fears of recent volatility and price declines. A little patience proved successful once again as the market had almost recovered all those losses by the end of the first quarter in 2019. So, a good year began with negative expectations and forecasters predicting a recession with a hard end to the bull market that began over a decade ago.
Income levels stayed consistent throughout the decline at the end of 2018 and the quick recovery in early 2019. However, our highest income month for 2019 came in April (December was a close 2nd) with strong option premiums, capital gains from closed positions, and numerous dividend payments. In the middle of 2019, the market struggled to find any true direction creating some ideal conditions for option sellers like us.
Throughout the summer, stock movements seemed to hinge on one of two stories, the trade war or interest rates. For the first time in over a decade, the Fed started to lower interest rates in the 2nd half of 2019. By the end of the year, they had made 3 rate cuts with the goal to keep the economy growing at a steady pace. Lower rates incentivize businesses and consumers to borrow money benefiting the economy with their purchases. Unfortunately, lower rates tend to have a negative effect on income generation with the Snider Method. The cash in our portfolio reserved for future stock purchases will be paid less interest with lower interest rates. This cash is an important piece of the investment approach as it allows us to continue to purchase stock if the market declines and maintain a stable income even in bear markets.
While there hasn’t been a definitive end to the trade war with China, positive news fueled stock price gains in the final quarter of 2019. 6 months ago, a negative comment or tweet could send the market into a free fall. Uncertainty about working out a deal left the market on shaky ground. Slowly but surely both parties have worked together to work out a partial agreement. As it became more and more apparent China and the US would work something out, the markets moved higher and higher. Had you sat on the sidelines waiting for the deal’s completion, you would have missed out on significant gains. This reiterates the benefits of a consistent investment approach like the Snider Method over trying to time the market.
In the end, it felt like 2019 was over in the blink of an eye. With a good year behind us, what is in store for us in 2020? If only we had 20/20 vision when looking into the future. It is easy to look back in the rearview mirror at 2019 and explain what happened. But, in the heat of the moment, it is impossible to predict what will happen next and how it will impact the economy.
Uncertainty is the market’s biggest fear. Whether it is a Trade War with China or the next movement in interest rates, investors want to know what is next. The top headlines today will highlight the Trump impeachment. What seems like a volatile event in our history most likely will end in an acquittal from the Senate. With little uncertainty, the markets have been unphased by the proceeding.
The 2020 Presidential election presents one of the largest unknowns for the upcoming year. As it stands today with a strong economy, low unemployment, and rising stock prices, it is more than likely President Trump will be re-elected. I also think he will do everything in his power to keep these conditions in place. However, as the democrats pick a candidate and the debates increase, the uncertainty of who our next leader will be will likely grow. Like it or not, we will be overwhelmed with election talk in the next few months.
Overall, I’m very pleased with our performance in 2019 and look forward to continued success in 2020. The Snider Method has proved to produce consistent results year-after-year in up and down markets. I don’t see any reason why that will change in the years to come. We’ll be working hard to provide that consistency, but also searching for ways to make it even better.
As January comes to a close, your 2019 tax documents will be released in the coming weeks. We will email all clients their forms as soon as they are available and we’ve verified their accuracy. Retirement account holders can expect to see their 1099-Rs in early February if they had a distribution in 2019. Taxable account holders will receive their 1099-Combined and Form 8949 in late February or early March. We understand the urgency of receiving these documents and completing your tax return for 2019. We will do everything we can to make this an easy process for you again this year.
As always, if you have any questions about your Annual Report or your account in general, please don’t hesitate to contact me. I’m also here to help with any financial planning or retirement planning decisions as they arise. With years of experience and hundreds of clients, I’ve probably helped another client through a similar situation. Hopefully, you only retire once, and you want to be 100% confident in that decision!
Thank you for your business. I look forward to an even better, more prosperous 2020!