Blame it on the leap year! February's performance was looking OK until the stock market drop on the 29th.
My net worth as at 29 February decreased by -$2,302 (-0.22%) during the month to $1,063,775 (AUD), due to further losses in my geared equity investments, which were only parially offset by a good month for Sydney property valuations (at least for the northern suburbs). Preliminary data for March shows that the property component of my portfolio will show another gain this month, but since the stock market dropped a further 3% today there's no guarantee that my overall net worth will improve this month. Since my savings and the interest I could get on a risk-free asset allocation (online bank investment) would see around $10,000 being added to my net worth each month, it's getting tedious to see back-to-back month's of flat or decreasing net worth.
The estimated valuation of my share of our real estate assets increased by 1.73%, but the balance of my half of the mortgage also increased by 0.24% as we continue to use monthly redraws to help cover the interest payments while DW is working part-time. We added a large chunk of our tax refunds to the joint account that funds the mortgage payments, so we should have enough to meet payments until at least the end of 2009 (provided the tenant of our rental property keeps up with the rent). We will also contribute a large part of any tax refund we get this year, which will help offset the expected 0.25%-0.75% in interest rate rises by the RBA in the next few months. Fortunately we have around half of our mortgages on a five year fixed rate loan, which lasts until 2011.
My leveraged stock portfolios decreased by -4.92% this month to $296,562, which is painful, but not as bad as last month (-18.35%). I'm not game to increase my margin loans to invest any more in the market at the moment, although this is probably a good buying opportunity.
The balance of my retirement account recovered slightly this month, by 1.73%, but that was largely due to my monthly retirement contibution (around $4,200) plus an amount being paid in by my employer that had been outstanding since September.
We're now 15% through 2008 and it appears highly unlikely that I'll achieve my goal of increasing my net worth by $150,000 (13%) in 2008. From the current situation I'd have to gain around $225,000 over the next 10 months, or around 21.1% in 10 months! From the current position I'll be happy to achieve half that increase.
Copyright Enough Wealth 2007