January Report

Income and Expenditure

Expenditure was $US2,515 - 76% of take home pay ($3,299). Expenditure is up this month because of paying for flights and hotels in Florida for our upcoming trip. 403b contributions now total $1,795 and Roth contributions $333.33. Non-retirement investment returns were very strong this month ($8,989) and were the most significant factor in increasing net worth by $10,941. Retirement investment returns were negative.



Net Worth Performance

Net worth rose by $US10,941 to $US377,402 and in Australian Dollars gained $A21,262 to $A485,842. This is $US3000 more than needed to be on track for my 2007 goal of a net worth of $470k. The Australian Dollar fell this month resulting in a relatively large gap between performance in the two currencies. Non-retirement accounts reached $US205,646 or $A264,735. The growth of non-retirement accounts has been very strong relative to retirement accounts recently:



The brown line shows non-retirement accounts and the green line retirement accounts. The emerging rapid acceleration in the non-retirement accounts is the reason I started maxing out my 403b. Hopefully, the strong investment and trading performance will continue but I also need to think about how to increase returns on the retirement accounts.

Investment Performance
Investment return in US Dollars was 2.28% vs. a 1.02% gain in the MSCI World Index, which I use as my overall benchmark and a 1.51% gain in the S&P 500. Non-retirement accounts gained 4.58%. Returns in Australian Dollars terms were 3.86% and 6.19%. U.S. Dollar returns also beat the indices over the last 12 months:



The contributions of the different investments and trades is as follows:



The returns on all the individual investments are net of foreign exchange movements. Foreign currency losses appears at the bottom of the table together with the sum of all other investment income and expenses - mainly margin interest. Finally QQQQ/NQ trading yielded very strong returns. The Everest Brown and Babcock entry covers returns on a listed fund of hedge funds and the management company itself which are both listed on the Australian Stock Exchange. The management company saw a large increase in share price this month. Merger candidates Powertel and Symbion also performed strongly. I also made $1170 trading Apple on the day of the evening of the earnings release. I still hold the short IYR position which is performing very badly for me.

Progress on Trading Goal
Trading in my US accounts netted $4525 a 19.7% return on trading capital. The model gained 9.1% while the NDX rose 2.0%. My goal for the year is to end up with at least as much in my three accounts - regular trading, Roth IRA, and IB - as I've put into them. The accounts in total gained $4578 which is about a quarter of the annual goal of adding $19,000. So here too, I am well ahead of my goals for this point in the year.

Asset Allocation
At the end of the month the portfolio had a beta of 0.76 56% of the portfolio was in stocks, 44% in bonds, 8% in cash, and loans totalled -18%. The remainder was in hedge fund type and real estate investments, futures value etc.