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.

Moomins

So why the names Moomin Valley and moominoid? The moomins are characters in the books (and other spin-offs) created by the Finnish (but Swedish speaking) author Tove Jansson. They live an idyllic life of leisure and adventure in Moomin Valley. They don't care too much about material things but like a comfortable life. They don't care what other people think about them. They don't appear to do any productive work. They are very open-minded and caring about other creatures they encounter. I seem to have a lot in common with a couple of the characters and I guess my dream is to live a life as happy as that of the moomins.... So the aim of getting rich is not for material benefits but in order to live a life more like that of the moomins :)

Goals

The net worth goals might seem rather high and they do depend on everything going right.

The goal for this year is based on:

Current savings from salary: $20,000
Retirement contributions: $7,000
Investment returns: $30,000
Inheritance: $20,000 ($7,000 of which has materialized the other is a guess of the value of my share of a land sale)
Exchange rate change: $23,000

I'd be happy with a lot less - say a $50,000 gain instead of the $100,000 gain. But with $16,000 added to net worth so far this year I am right on track for the $100,000 goal.

The decade-end goal is dependent on there being a new stock bull market in 2007-8. This is what I expect based on the four year stock cycle. Based on the 2002-5 bull market I could double whatever wealth I have at the beginning of such a bull market. If that happens, the $1 million goal will not be so hard to achieve.

At the moment I am mainly trying to preserve capital against a potential downturn this year. You have to be very daring and right to make money in a down market...

Welcome

This is my blog - I just got it so I can answer other blogs - I will probably occasionally post some personal finance stuff here to complement my profile on NetWorthIQ.