Monthly Review - January 2008

January saw considerable volatility in financial markets, mostly negative, and this was reflected in my portfolio's performance.

It was not a surprise to find that my investments (at least the ones which I mark to market) declined during the month. The surprise was that the decline was less than the falls in the underlying equity markets. Here are the details:

1. my actively managed funds declined sharply. I currently have investments in actively managed funds investing in Thailand, Taiwan, Vietnam, Eastern Small Companies and European Small Companies. This month I made my last contributions to these funds. All of them fell in value by meaningful amounts;

2. my equity ETFs declined sharply. I curently have exposure to Hong Kong only. I added to this position during the month and (whether by luck or judgement) managed to buy at close to the month's low point;

3. my residual equity portfolio declined but by a very small amount, due to the largest holding going against the market and rising very slightly;

4. my commodity investments rose during the month. I currently have exposure to silver and a commodity ETF. The commodity ETF was purchased during the month;

5. my properties are all fully rented and tenants are paying the rent on time. I now have a positive cash flow and the surplus of income over expenses represents an increase in net worth. The cash flow and the surplus will grow next month as the interest rate cuts take effect;

6. a weaker US$ was positive for the portfolio.

In total, the falls in asset values were partly offset by a rise in the price of silver, net income from my properties and favourable currency movements. There was still a net decline for the month, but it was surprsingly small.

My income was at the low end of expectations this month (which was expected). Fortunately, my spending was also quite low this month as well and the resulting savings were enough to push the net worth change into positive territory. This was against my expectation when I started putting the numbers into the spread sheet tonight.

The final result was an increase of 0.5% for the month.