Monthly Review - July 2008

July was yet another hugely positive month for my investments. Solid gains in all asset classes were amplified by favourable currency movements and supplemented by positive cash flows from my investment properties. Income from my job was good and expenses were low. From a financial perspective, everything went my way this month.

Here are the details:

1.my actively managed funds were up. I currently have investments in actively managed funds investing in Thailand, Taiwan, Eastern Small Companies, European Small Companies and Vietnam;

2. my index tracking funds were up. I currently have exposure to Hong Kong, India, Taiwan and Russia;

3. my equity portfolio appreciated strongly. I currently have meaningful investments in 17 companies listed in either Australia (3) or Hong Kong (14). I also have some smaller residual positions dating back many years and two small speculative day trading positions which, collectively, are not meaningful;

4. my commodity investments were went up with an increase in the price of nickel and a rise in my commodity ETFs more than offsetting a further decline in the price of lean hogs. I am now convinced that not only do pigs not fly but they are in fact burrowing animals;

5. my ELDs and CLDs produced positive returns for the month;

6. all my properties are all fully rented and the tenants are paying the rent on time. I have both a positive cash flow and a surplus of income over expenses (which represents an increase in net worth). A bill for fixing a leaking pipe did not change this;

7. currency movements were positive as the US$ declined.

I purchased two Hong Kong shares (China Gas and Herald Holdings) , took a loss on one (South Sea Petroleum), did two small short term trades at small profits and entered into four OTC option contracts:(i) short GDP/HKD (ii) writing a put options against Hong Kong Tracker fund, China Construction Bank and Hutchison Whampoa.

Income was strong (it will be erratic under the new job) and contributed to the gain for the month. My spending was low due to an absence of major items. The increased mortgage payments resulting from the refinancing completed last month adversely affect cash flow but not net worth as most of the payment is principal.

For the month, my net worth increased by an impressive 5,8%. The gains came from the combined effect of higher asset values, a weaker US$ and a high savings rate. The year to date increase is 52.3%. Even allowing for the payout arising from changing jobs, it has been fantastic progress this year. The possibility of retiring at the end of 2011 is, once again, very real.