It's Nice to have some Market Insurance

Well, a correction was well-overdue, so a one-day drop of around 3% in the stock market was no great surprise, although the alleged "trigger" for the event (the Chinese market taking a hit) was a surprise, as is normally the case. On the up-side it makes the $5K I spent on buying 3 Index Put Option contracts on 9 Feb look more like sensible insurance, rather than simply throwing money down the drain.

I'd need to be holding 12 5500 ASX Put contracts to fully cover any losses to my stock portfolio due a bear market (or severe correction), so I'm not fully insured yet. I was hoping to pick up some additional ASX 5500 Dec Put Options as the market continued it's bull run - on Friday the Australian market had closed over 6000 for the first time and the cost of the Put Options had dropped as low as $0.98 at one stage (I had bought the previous 3 contracts for $1.58 on 9 Feb). Although I thought about buying some more Put options last Friday, in the end I didn't bother. (If I had I'd be thinking how great I was at market timing! ;)

Unfortunately the price for the options probably won't be as attractive even when/if the market recovers back to the 6000 level as the increased volatility will make the options more expensive.

Enough Wealth

Zero Balance Transfer CC Arbitrage Update

HSBC sent my new CC yesterday. When I checked my everyday CC account the $13,500 balance transfer had already gone through into the account on the 19th, so I withdrew $10K and deposited it into my Credit Union account where I can leave it in the high interest account until the 0% balance transfer period ends on 1 October. As part of the balance transfer was used up on the current months accumulated charges on my everyday CC, I'll deposit the remaining $3,500 into the Credit Union account next month instead of having to make a CC payment.

I should earn around $480 interest on the $13,500 "free" loan from HSBC by 1 October, and the only cost was a $10 cash withdrawal fee from my everyday CC account and about 10 minutes work all up to apply for the card and shift the $10K cash from one bank to another.

I'll just have to remember to cancel this HSBC CC once I've repaid the balance transfer amount in October, otherwise they'll start charging an annual card fee next year (this particular card only waived the annual fee for the first year).

Uni has Started and the Bills follow soon after

Autumn Semester started last week. I'm taking two courses for the Graduate Diploma in Secondary Education I've just commenced, and one course for the Master of IT I'm halfway through. The fees are similar for both - around $800 HECS (I pay in advance, rather than accumulate a tax debt) for the two Education subjects and $800 fee for the one IT subject. I also had to purchase a textbook for the IT course ($111.55 even with the Co-op bookshop member discount!), so the total education costs for this semester are around $1710. Luckily there are too many students enrolled as Distance Education students in the Education at CSU this year, so the Uni cancelled the one week residential school in Bathurst. That would have cost another couple of hundred dollars for little benefit, so I'm glad it's not on anymore.

I worked out that if I quit my current position to start teaching in about three years, I'd have to work two extra years as a teacher to make up for the reduction in annual pay. I've no idea yet if I'll actually enjoy being a High School teacher, so I can't tell if I'd want to work longer as a teacher compared to my current job. Then again, I should have enough for a comfortable retirement whether I work to 61, 65 or 68.

House Hunting with a Difference

A few years ago countrylife.co.uk had a scottish manor house (Merton Hall) for sale for around A$1m (it was before the recent boom in UK house prices, and was in need of renovation as it had been used as a boarding house for a boy's school). I was keen enough to go to the trouble of getting my father to join me in making a bid on the property, although in the end we were not the winning bid. I've always fancied buying an "estate" with an historic house and grounds, although it's currently still way out of my price range, and country houses have never really been much of an investment in the long term (although if we had succeeded in buying Merton Hall it would have done well in the past three years due to the real estate boom in the UK).

So, I still browse around what is available, looking for bargains and being amazed at some of the massive prices asked for some modern "estates". Recently two extremes caught my eye - the world's most expensive house (at A$138M), and a real "fixer-upper" in Poland that is going for around A$62K:



What I'd like is somewhere between these two extremes, but, when I'm in a more sensible mood I realize that I'd be much better off investing my money and just staying in a castle of manor house on my holidays.