Thursday, August 24, 2006

Model Update - Progress Towards Goals

At this point it is looking like there will be a buy to cover signal generated at next Tuesday's close. This is about as accurate as weather forecasting so as that date approaches the forecast might be brought forward or pushed out further in time. I continue to be shocked and stunned by the performance of the model and the ease of trading with it. I am getting used to trading the model. In July I got about 1.5 times the model return on my main trading account using roughly 3 times leverage. So far this month I am getting more than 3 times the model return. And, therefore, that performance goal has been realized. The model is on track to match last month's results. It is now up about 18% since 29 June. My taxable trading account is up 40%... The Roth IRA account is up 70% since I opened it earlier this year. I am now more than half way towards my initial goal of making $10,000 in profits in the Roth IRA. I thought that goal might take a few years to achieve. At this rate it could be achieved by the end of this year. I am pretty much also back on track towards this year's goal of increasing total net worth by $100,000. I think multiple near term goals are good - performance targets, profit targets, net worth targets etc. You can always be approaching some goal. Better than a single goal of some huge number you have to reach by "retirement".

P.S. Maybe I should just have bought real estate instead as common wisdom suggests :P The data in the article suggest that the real rate of capital gain on the typical house is 1% per annum. This article assumes 2% and still thinks housing is an inferior investment strategy.

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