Thursday, November 02, 2006

October Report

Investment Performance
Investment return in US Dollars was 2.70% vs. a 3.27% gain in the MSCI World Index, which I use as my overall benchmark and a 4.74% gain in the NDX which I use as a trading benchmark. The trading accounts lost 14.3% - a disastrous performance. Total returns in terms of Australian Dollars was a loss of 0.31%. The best performer of the month was the CFS Conservative Fund, my biggest single investment and the worst performer was QQQQ trading.

Asset Allocation
At the end of the month the portfolio had a beta of -0.14 (a 1% rise in the market would result in a 0.14% decline in the portfolio). Assets were allocated as follows:

Asset Class:
Stocks Long 41.58%
Stocks Short -18.67% (QQQQ)
Futures 0.00% (NQ)
Put Options 0.29% (QQQQ)
Bonds 46.02%
Real Estate 4.92%
Hedge Funds 2.62%
Cash 31.49%
Loans -8.44%
Asset Loans 0.18%

Much of the cash is used as margin for the short position. Bonds are held via the CREF Bond Market Fund and the CFS Conservative Fund. 65% of net assets are deemed to be AUD related and 24% USD related with the remainder in global funds.

Net Worth Performance

Net worth rose by $US12,003 to $US342,135 but in Australian Dollars lost $A614 to $A441920. This is the reverse of last month's pattern as the Australian Dollar rose strongly this month.

Income and Expenditure

Core investment income is total investment gains before taking into account the change in exchange rates. Other income is salary and retirement contributions.

As you can see total investment income was -$US282 before taking into account foreign currency fluctuations which resulted in a net investment gain of $US8997. But retirement accounts suffered a loss of $US2338 before taking into account the change in the exchange rate. This is due to the disastrous loss I suffered in QQQQ trading in my Roth IRA. Expenditure was $US1581 - this is about my base level of spending if I don't travel anywhere or make large purchases.

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