February Report

All figures are in US Dollars unless otherwise stated. Income and Expenditure

Expenditure was $1771 - 54% of take home pay ($3,299). This is the normal background level of expenditure. 403b contributions again totaled $1,795 and Roth contributions $333.33. Non-retirement investment returns were quite strong again this month ($5,777). Retirement investment returns were also nicely positive ($3,202). The rise in the Australian Dollar contributed significantly to returns.



Net Worth Performance

Net worth rose by $US12,301 to $US389,704 and in Australian Dollars gained $A8,017 to $A493,859. This is $US7,000 more than needed to be on track for my 2007 goal of a net worth of $US470k. The Australian Dollar rose this month resulting in a relatively large gap between performance in the two currencies. Non-retirement accounts reached $US212,618 or $A269,444. Retirement accounts also saw nice gains to $US177,086.

Investment Performance
Investment return in US Dollars was 2.38% vs. a 0.49% fall in the MSCI (Gross) World Index, which I use as my overall benchmark and a 1.96% fall in the S&P 500 total return index. Non-retirement accounts gained 2.81%. Returns in Australian Dollars terms were 0.78% and 1.21%. 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 gains appear at the bottom of the table together with the sum of all other investment income and expenses - mainly margin interest. QQQQ/NQ trading again yielded very strong returns ($4,026). Apart from trading and foreign currency diversification the monthly return would have been flat. The most positive contributions from investments were from Everest Brown and Babcock - an Australian listed fund of hedge funds and hedge fund management company - and from two bond or balanced mutual funds. If all my investments were in US stocks I would have had a negative month. Diversification across currencies, asset classes, and trading vs. investing generated the positive return.

Progress on Trading Goal
Trading in my US accounts netted $3,826 a 13.9% return on trading capital. The model gained 9.4% while the NDX fell 1.7%. 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 a net $3,374 and I have now achieved $7,702 of the annual goal of about $19,000. Since the beginning of the year the trading capital gained 36% while the NDX was essentially flat.

Asset Allocation
At the end of the month the portfolio had a beta of 0.40. 40% of the portfolio was in stocks, 43% in bonds, 13% in cash, and loans totalled -7%. The remainder was in hedge fund type and real estate investments, futures value etc.