Saturday, February 28, 2009

Monthly Review - February 2009

February marked yet another down month for my investments. The positive was that the losses were relatively trivial.

I started my new job. However, my income is more erratic than my previous job and, as expected, this month's income was low. I continued to enjoy full rental income from my properties - a state of affairs that will come to an end this month with one property becoming vacant.

Here are the details: actively managed funds were mixed with a net decrease during the month. I am holding losses on many of them. 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 down slightly. I currently have exposure to Hong Kong, India and Taiwan;

3. my residual equity portfolio appreciated slightly;

4. my commodity investments went sideways. I have small positions in the Lyxor Commodities ETF, nickel and lean hogs;

5. 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). One has moved out and will cease paying rental at the end of February;

6. currency movements were marginally unfavourable as the USD gained against a number of currencies.

I made no portfolio investments this month but did enter into three OTC option contracts:

(i) long HKD/GBP - the option was exercised against me at levels which produced a net profit for me (i.e. the option premium was higher than the FX conversion loss);

(ii) short HK Tracker Fund - the option expires on 5 March and, with the strike price still out of the money, it looks like I will make the premium on this contract as well;

(iii) long NZD/USD - this is a more aggressive trade.

I intend to continue experimenting with option trades (much like I did with warrants last year), but only with relatively trivial amounts of money and against underlying assets which I am prepared to hold on a longer term basis.

Income was low (it will be erratic under the new job) but sufficient to tip a small loss into a small gain for the month. My spending was also low. I already make accruals against my net worth for holidays, luxuries and tax. This month I have decided to start making a general accrual for long term expenses (such as refurbishment of our flat).

For the month, my net worth increased by 0.09%. The year to date increase is 10.54%.

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