Monday 4 January 2010

Net Worth Update: December 2009

December saw another significant increase in my net worth, with a "Santa Claus rally" and end-of-year "window dressing" in the last few business days boosting the stock market valuations. This month the strength in the Sydney property market was again matched by gains in the stock market - by 31 December my net worth had risen to $864,078 (up $33,246, or 4.00%). However my NW is seeing relatively less benefit from the bull market than it had suffered damage from the bear market, mostly due to my having cut back on my margin loan debt last March and not being game to buy back in to the market since then (I'm just holding on to the stock investments I had retained). In addition, most of my hedge fund investments values have stayed at their lowest levels - having either moved entirely into cash or suffering from suspension of trading in the underlying investments. However, in the longer term I should benefit from the capital guarantee conditions applying to my OM-IP funds. Some other investments (such as Timbercorp units) have been liquidated and will therefore never recover.

My retirement account (SMSF) gained $15,299 (+4.83%) to $332,134, with the gains in the stock market amplified by our modest amount of gearing (8 ASX200 index CFDs, code: IQ). No employer superannuation contributions were deposited into our SMSF bank account during December, but I expect all the December quarter employer contributions (SGL and salary sacrifice) will be processed in late January (around $6,000 is due).

The estimated valuations for my half of our real estate assets (house and investment property) were up again this month, by a relatively modest $4,525 (+0.55%) to $830,283. The forecast rate of rent rises during the next few years, coupled with net immigration to Sydney and possibly higher than trend inflation rates, should support (or slightly boost) house prices in the suburbs our properties are in. Affordability issues may cap price rises, although on previous occasions I have been surprised by continued strength in the top end of the housing market at times when the more 'affordable' suburbs have been in a down-turn.

My stock portfolio gained $13,438 to $66,140 net equity during December (due to the high gearing levels). The market (ASX200) break above the 4800 level was on thin trade during the holiday season, and I don't expect it to move much higher until company profits see further benefits from the Australian economic recovery later in 2010.

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Unknown said...

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S. Alarcon said...

Thanks for your insights and breakdowns on how you did in 2009. It really helps to break down one's "earnings" in different categories to better evaluate them.