Funding Different Accounts | Podcast Episode #455

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Hey, I’m Ryan Mallory and this is my Swing Trading the Stock Market podcast. I’m here to teach you how to trade in a complex, ever changing world of finance.

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Learn what it means to trade profitably and consistently, managing risk, avoiding the pitfalls of trading, and most importantly, to let those winners run wild.

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You can succeed at the stock market and I’m ready to show you how. Hey everybody, this is Ryan Mallory with shareplanner.com’s Swing Trading the Stock Market.

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Today’s episode we’re going to talk about funding different accounts, not just about swing trading today.

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It’s about swing trading, long term investing, dividend accounts, bond accounts, whatever account that you might have.

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How do you decide, you know, when you have dollars in a checking that you’re wanting to distribute to long term or swing trading or to divvies?

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How do you decide which dollar goes where? So today’s podcast is going to be about that.

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And I’ve got an e-mail from a guy who wants to be called Hank from Canada. I don’t even know if there is Hanks in Canada, Is there?

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I mean, I know there’s Hanks down in Florida. I’ve met a few of those.

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But Hanks in Canada, I’m not sure. I’m guessing there is.

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There might be some, you know, southerners that’s made it their way up to Canada for some reason. But definitely an interesting choice of names for this podcast here Hank from Canada and he writes.

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Hi Ryan, great job on the podcast. I really look forward to and enjoy your show.

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I know you’re primarily a swing trader, but I was wondering about how to look at dividend accounts and allocating funds to your swing trading account into a long term account or to a dividend

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account. Does it make sense to keep a certain amount in a long term account or dividend account and only

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swing trade with a small percentage of 1’s total trading capital? I realize this is a personal preference and will vary greatly between individuals, but I do value

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your opinion and I’m curious about your thought process. When you allocate funds, do you move a certain amount of swing trading profits into a long term

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account or do you just keep the swing trading account growing and adjust the position size as it grows indefinitely?

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I’m not new to trading but I wouldn’t consider myself seasoned either.

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So I end up swing trading capital sitting on the sidelines rather than being invested, which is leading me to want to open an account separate and have most of my capital and long term picks or

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ETF’s like VOO or JEPQ.

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Morgan NASDAQ equity premium income ETF. Try saying that five times in a row.

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It’s a mouthful, but those are the two stock symbols that he’s referencing. I know your focus is swing trading, but any input you might have on strategies for setting up a long

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term account or picking ETFs or dividend stocks is greatly appreciated.

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So yes, for me, I keep capital and different accounts. I don’t let my long term stocks sit in the same account as my dividend stocks. I don’t let my dividend accounts in the same account as my swing trading because they’re all different strategies, all different approaches to the market.

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And so one of the reasons for that is that if I get into a swing trade and I’m maybe I’m having a really good day swing trading, but a lot of my long term accounts are down.

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Let’s say, for instance, I’m short on the market from a swing trading standpoint, but I still hold on my long term accounts in the markets just selling off really hard.

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Well, my long term account, my long term plays are likely to be struggling in that kind of a market. But if I’m bearish in my swing trading, I’m making a crap done.

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But when I look at the overall return on the on the account that day, and now I do say don’t dollar watch, but I know a lot of you guys will dollar watch.

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And I bought dollar watched as well in my early on in my trading journey. And that was part of the reason why I separated all of them is because I didn’t like seeing like,

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hey, I’m having a really good day swing trading, but yet my account still shows me down on the day. Yeah, you can have a really good day swing trading, but your other accounts are down because it’s a

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different strategy and it’s going to react differently to the market. So if you’re bearish on your swing trading and the market’s trending lower, that’s going to be

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looking a whole lot better. Those stocks that you’re using to be able to capitalize on a market moving lower, maybe it’s inverse

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ETFs. They’re going to look much more promising than your long term accounts, which might be, you know,

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long on Apple, Amazon, Google and Microsoft. But they’re taking a beating because the markets taking a beating.

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So I don’t like those mixed together and the same thing with dividend accounts. The objective of dividends is to collect quarterly or monthly payments from a stock or an ETF. I don’t

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care as much about the long term growth about of a stock in the dividend. What I really care about is that they’re able to consistently pay out their dividend and that they

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do continue to do so over time.

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No. I’ve had a few companies even cut their dividends just recently from Intel TO3M.

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Both cases though, which was interesting, is that they rallied like mad after after they cut their

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dividend, which has helped me on that regard. I ended up closing out my Intel position, thankfully, because then they started firing everybody there and, and that caused the stock to plummet.

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So then there’s another account and, and this is like probably the most boring account living in Florida.

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My grass grows faster than this account, but it’s the my bond accounts and, and this one’s kind of a

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unique thing too, because that money just sits there collecting interest from the bonds.

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Sometimes it’s CDs, but usually it’s just the treasury bills or, or notes. And for a while there you could get them, you know, you can have them like with an expiration of a

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year out and you’re making like 5-6 percent on them. And that was, that was pretty phenomenal.

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But now they’ve gone down drastically. I think some of the more recent ones it’s like 4 1/2 percent or so.

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And then you’re paying taxes on them too, which that that’s going to knock it down some. But really what I do the bonds for is because instead of paying off the house, I have a house that I

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have a three percent mortgage rate on, right? So why would I pay off my mortgage when I can make almost double that an interest that I would that

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would be saving from paying off the mortgage. So I just keep the money in the bonds.

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But because the bonds have dropped so much and also living in Florida, you also have this issue with insurance, home insurance and it’s skyrocket.

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Mine hasn’t been as bad, but I’m just, I am waiting, especially with this most recent hurricane season where the just, we got 2 massive hurricanes that swept across the state of Florida.

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Raise my insurance rates by 50 to 100%. And if they do that, I’m, I’m definitely going to be paying off the house at that point because I’m

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going to drop my insurance, which sounds crazy, but the hurricane insurance is ridiculous.

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I’ve I’ve gone through 15–20 hurricanes and I’ve never even lost a shingle from and I’ve gone through ones with excess 100 mile an hour winds.

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But I’ve always chosen to live in places that are not susceptible to flooding, that are not right on the beach, that they’re inland, so that by the time they do make their way inland, the winds have

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come down quite a bit. So that’s why I, I know some of you guys are probably listening to me like this guy’s crazy.

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He talks about risk reward and everything. He’s going to drop home insurance in Florida.

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Well, not entirely. I, I, I think what keeps me up more at night is one of the kids burning down the house because they

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leave the stove on. Then the Hurricanes, the Hurricanes really don’t worry me too much.

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I, I think we’ve had more weird stuff that’s happened as a result of non hurricane issues happening to the house than actual hurricanes.

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Hurricanes are just scary, but you know, you can buy, buy windows now that are able to withstand hurricane winds as well.

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You don’t even have to put shutters up on your house. Anyways, I’m not trying to get too far out there into the weeds there with this discussion about

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hurricanes and home insurance and everything. The point is I’m trying to tell you, you know, what do I use some of these different accounts for?

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So long term, I mean, the government has programs set up whether you, you qualify for a Roth IRA where you pay the taxes upfront, but you never have to pay any taxes on the profits or you can only

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do a long term IRA. They’re they’re both really good vehicles for setting up long term accounts.

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And you know, I have that for both my wife and I, we contribute to it every year, dividend accounts. That’s something that I contribute to every year as well.

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And as as well as swing trade. I’m always trying to increase the capital and everything that I’m doing.

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So for me, what I do in each account, I just look at each one of them separately. I don’t really look at them from the whole. And I just say to myself, OK, what do I want my dividend

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account to be at from a funding level at the end of this year? Like how much more money do I want to put into my dividend account?

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And then the other question becomes my longer term account, you know, if it’s just IRAs, then you’re going to be maxed out.

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I think, I think the cap is like what, 7000 per person this year?

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I mean, it’s crazy not to put that money into the IRAs. And then it, you know, the other long term accounts too, there’s more money that you can put into

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those, you know, then, then, then I’m looking to figure out how much money I want to put into that between now and the, the end of the year.

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Now you can fund it, you know, throughout the course of each month you put in, you know, $100 into

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this account, $100 into that account and 50 into the other account.

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Or you can just pay it all at once. I usually just do it all at once just so I’m not constantly having to, to think about it.

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But that’s how I make the decisions on the funding count. I really just treat each one of them differently, kind of like how I do parenting too.

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I, I look at each each child individually and I make decisions what’s in their best interest based

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on them alone. For instance, one of them can drink caffeine before they go to bed and be just fine. So if I see the kid drinking some tea out of the refrigerator, knowing that it has caffeine, am I

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too worked up about that? No, but my other son, if I see him drinking tea right before he’s going to bed, am I going to get worked up about that?

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Absolutely.

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Because because I know at like 4:00 AM in the morning, I’m going to hear him in the kitchen trying to find some snacks or whatever.

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And and I’m going to go out there and he says I haven’t been able to go to sleep at all. Why?

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Because I drank tea right before I went to bed. So the point of that is, is that how I parent is based off of each individual kid, you know the

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personalities and so forth and, and what you know the goals are with each one of them. Same thing with the accounts.

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I’m going to look at each account individually and try to figure out what’s in that accounts best interest.

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Should I be adding more to it? Is this market getting a little bit too overbought or is this really a good time to be just parking

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cash in there knowing that it won’t be allocated for some time? Those are kind of questions that I that I’ll ask myself.

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So I’m trying to find out what’s in the best interest. They’re looking at each account individually.

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Now what’s in everybody’s best interest is swingtradingthestockmarket.com. Yes, this is the website that goes alongside of this podcast.

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And when you go there, it will take you to my offering page at SharePlanner where it it lists all the different services that I provide.

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All of them go hand in hand. Things that you’ve learned with this podcast translates right over into these different services.

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So if you’ve been able to learn a lot from this podcast, and I hope you have, then you’re going to find everything that I also have to offer at Swing Trade in the-stockmarket.com really beneficial as

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well. You can get all my stock market research or you can even upgrade and, and get, you know, the stocks that I’m trading each day and how I’m trading them and when I’m trading them from beginning to end.

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So that’s, that’s really awesome. So go ahead, check out swingtradingthestockmarket.com. So Hank from Canada also talks about having capital just sitting there doing nothing in his account

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because when he can’t trade, it just sits there idle. And there is some things that I do for that because I don’t always have all my capital allocated at

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all times. So what I do is I end up going to and for whatever reason, I can’t do it through the Thinkorswim

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platform. I have to go through schwab.com but I just park the money into SWVXX.

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Right now it’s it’s paying somewhere between like 4 1/2 to 5%. I don’t know what the exact amount is but it’s a decent amount.

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Fidelity, which I wish Schwab would do this. Fidelity just always has your money parked in a interest bearing asset when you’re not putting it

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into a stock or an ETF. They usually should make I think like 4.9%, but it’s really a great way that they do it over at

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Fidelity where you don’t have to actually manually move it from cash to the money market account. Instead, they do it for you and then when you’re buying a stock or an ETF, they just move it out of

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it there for you and put it towards the stock. Schwab though, you have to actually manually put it in there and take it out, which kind of annoys

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me, but that’s what I do. So if you’re doing Fidelity, you don’t have to do anything.

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They’re doing it for you. But with Schwab, you do have to make those adjustments.

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Now I also asked about, you know, strategies for setting up a long term account or picking ETF or divvy stocks.

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Really for the dividend stocks, it’s simple. You know, I don’t want something that’s crazy volatile.

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I know it’s sometimes hard to get away from. Like I bought Walgreens a long time ago and that thing’s been a disaster.

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But what I do to offset the risk because every the risk that management and a divvy account is different than the way I manage risk in my swing trading account and a divvy account.

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I don’t have a large position in any one stock. I don’t, I don’t really care about the individual plays in my dividend account.

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Really what I care about is having an account that’s collecting dividends all the time and then those dividends are getting reinvested back into the market.

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What I don’t do is invest into a a dividend stock that will be more than 4% of my overall portfolio value.

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And usually it doesn’t even get that high. It’s usually somewhere around 2 to 3%.

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The reason for that is because when you get it like a Walgreens or a stock that just completely goes against you, you don’t want that to grossly impact your dividend portfolio.

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Yes, and they may still even pay out dividends, which allows you to still make back some of that money over time.

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But I don’t want it to completely blow up my account either. So the exposure of any one individual stock is very limited.

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I have like over 25 stocks in my dividend portfolio. There’s a bunch of them and cash is a position there because that’s also making me about four to 5%.

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But I want the ones that have a history of sustained dividend increases.

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Those that’s a big part of it. Like for one, one of the longest lasting one right now is Altria Group stock symbol MO 54 years of consecutive dividend increases. That’s one that I like.

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There’s others out there as well, UVV, Northwest Natural Holding, Black Hills, Hormel Foods that’s stock symbol, HRL, Kimberly-Clark, KMB, Consolidated Edison, Pepsi, Stanley Black and Decker.

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They actually have 57, so I stand corrected. They have actually had more dividend increases than MO. MO’s at 54.

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There’s actually Hormel Foods is actually at 58 and Genuine Parts is at 68. So, but Altria is the one with the highest dividend yield at 8.2% among all those that I just talked

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about. So that’s one of the big parts.

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Now I don’t just go and buy all the ones with the longest lasting dividends, but MO has been one that I’ve owned for a long time and the stock itself has done pretty good as well.

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Now in my long term accounts, I always wait for extreme bearish readings in my long term accounts. The last time I got those was June and October of 2022.

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Haven’t got them at all since then. And that’s where the percentage of stocks trading above their 40 day moving averages dipped down into like the single digits.

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Again, doesn’t happen very much. Hasn’t happened since June and October of 2022.

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So I build up my positions over time and then when they increase in value, I sell a a portion of that position off.

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And I’ve essentially done that with almost every one of my holdings and my long term accounts. So I’m sitting on more cash than I have in quite some time collecting interest, but there’s been

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very little to no pull backs during that time. So the returns on my positions have been really good.

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I’ve kept core position in each of my long term investments. And one of the biggest fears that I probably have is whether or not the Fed’s just simply going to

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financial engineer its way out of every kind of bump in the road because that’s really what we have seen under Jerome Powell as Federal Reserve Chairman.

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He just tries to financial engineer his way out of everything with his quote unquote tools, as you like to say in that time 60 minutes or you.

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Yeah, I just add a bunch of zeros to the ledger. He sounds really cool and people like him in the moment for doing it, but he’s he’s creating a

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disaster in the making.

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So the biggest fear is that he’s that they’re just going to inflate everything away and you’ll hardly ever get another pull back.

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If that’s the case, then then I might, you know, take a beating for missing some of that from a long term perspective.

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I don’t think that’s necessarily what’s going to happen. I don’t even if that is what you want to do doesn’t mean that you can’t have a market pull back in the meantime.

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I think we’re heading quickly towards a place where at some point nobody’s going to want to buy our debt and we got 36 trillion plus in debt and we’re adding another trillion just in interest payments

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a year to the debt, not to mention the overspending as well. So the bottom line in all this, it’s good to have different accounts because if I’m, you know, if I

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mess up on the long term account, I still have the swing trading, the divvies, the bonds and so forth.

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If I mess up on the divvies then I have all the others as well, so that’s something to remember. That’s why I keep them separate.

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It gives me a little bit of diversification of risk and there’s going to be times where different strategies outperform the other.

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So it’s good to have a little of something in each category. If you enjoyed this podcast episode, I would encourage you to leave me a five star review on

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whatever platform that you do listen to me on and check out Swing Trade in the-stockmarket.com. You support the podcast in the process in doing so.

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Plus let me know your stories, send me your emails. I want to hear from you ryan@shareplanner.com.

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I’m the only person that gets the emails. You guys are doing a great job recently of telling me your stories.

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Tell me your background. I want to hear about that and I want to I want to talk about your situation.

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All righty. Thank you guys and God bless.

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Thanks for listening to my podcast, Swing Trading the Stock Market. I’d like to encourage you to join me in the SharePlanner Trading Block where I navigate the stock

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You have any questions, please feel free to e-mail me at ryan@shareplanner.com. All the best to you and I look forward to trading with you soon.