Monthly Review - February 2011

When I entered the data for February, I was expecting to show a loss on my investments and, most likely, a decrease in net worth. Ending the month with a solid gain in net worth came as a considerable surprise and I spent some time reviewing the spreadsheet searching for the error(s). There wasn't one.

So February ended up being a surprising month of positive financial progress. Equities fell, but only slightly with gains at the beginning of the month being only marginally less than the losses at the end of the month. My Australian equities were actually ahead for the month. Commodities rose sharply, especially silver. FX movements were slightly negative with the AUD rising against the HKD/USD and the NZD falling. Cash flow on the properties was positive now that we are back to 100% occupancy. Savings were excellent as expenses were low. I also wrote back some accrued long term expenses which I considered over provided for.

Here are the details:

1. my Hong Kong equity portfolio fell modestly. This month I made a substantial investment in China Gas (HK:384) and a small additional investment in China Construction Bank (HK:939);

2. my ETFs were down with gains in Russia and China being insufficient to offset declines in India, Vietnam and Taiwan;

3. my commodities rose sharply with silver jumping significantly and more modest gains in my commodity ETF and ETC NICK. The ETC HOGS continued to demonstrate the fact the pigs are burrowing animals;

4. all of my properties are now occupied, the tenants are paying on time and there was only one small repair bill (I will have a larger one at some stage on a property suffering from a persistent leak). I have one lease expiring next month and the tenant has not indicated whether he wishes to renew or not. If he does want to renew, he is in for a shock as the last fixing was below market and the current market is more than 30% above his current rent;

5. currency movements were slightly negative, as the decline in the NZD was only partly offset by gains in the AUD;

6. my position in bonds remains small. There were no purchases this month;

7. a put option against the HKD/NZD was exercised against me for a small loss;

8. savings were very strong with low expenses.

My cash position is now high with 26 months of expenses in cash or equivalents (the same as last month). This is much more cash than I need and one of my current tasks is to find somewhere to invest at least half of it.

For the month, my net worth increased 2.52%. The year to date increase is 6.70%.

My target retirement window remains sometime between early 2012 and early 2013. While the possibility of a one year extension exists, it will take some adverse market conditions or other unexpected event to require that. Every passing month brings me closer to my retirement goal - it's possible that I may be handing in my notice less than a year from today.