Well it's time for me to call it quits for 2005. I won't be posting over the weekend and I'll use today as my net worth review.
The good news is that I hit my year end goal! I'm assuming tomorrow is going to be a quiet day in the markets, so my portfolio shouldn't fluctuate too much. My 2005 year end goal was $32,000 and I ended the year with: $32,424
It was a bit closer than I liked, but the important thing is that I hit the goal.
This represents an increase of almost $1,400 from November, which is pretty good considering I had to pay for Christmas things, New Years event, and a half month's worth of rent.
January should be an expensive month because of a few trips, full months rent, and I have to pay a deposit.
The Dow ended almost perfectly flat for the year (well there's tomorrow) and the S&P managed to gain 3.5%
My current portfolio (existing positions) finished the year up 8.2%.
For the year, my total gains are more than this because of some trades I did during the year. For instance I had one position (LB) that was a +15 or 20% gain. I need to go through my statements to figure the end result, but I'm confident the total number is over 10% for the year.
I'm glad I beat the S&P, but this years results were lower than my historic average. I've been averaging over 20%/year and this year will bring down that average to around 17%.
There's always next year, and I think I can do a lot better.
I hope everyone has a great New Years and I'll be back next week!
Thursday, December 29, 2005
Wednesday, December 28, 2005
Choppy Market
The market action has been a bit choppy lately. I'm also seeing many more opinions and some are bullish while others are bearish. Normally you can get a sense of the overall opinion about the market, but not during these times. So far I've read one opinion that 2006 will be an average year, and another said 2006 will be a bad year (but you see opposite opinions). We subscribe to a few technical analysis reports and those are iffy on the market outlook as well. Some indicators seem bearish, while others seem bullish. For instance:
The indices are holding up above their moving averages, yet the put/call ratio is bearish. The market sentiment readings (what money managers think) is bearish since the ratio is high (it's a contrarian indicator). The different sectors all appear to be mildly bullish, but there are no cash inflows into mutual funds (there might have been more outflows I think). Two weeks ago the M2 (money supply) increased less than the inflation rate, which is bearish. There's a correlation between M2 growth and stock increases. Last week the reverse happened, M2 outpaced the inflation rate.
I think, from the technical journals I've read this week, the consensus from those managers seem to be that January may be pretty good, but then the rest of the year will be average.
If the year ends up this way, I think I should be able to beat the S&P again.
I have no opinions about Robert Kiyosaki (the author of Rich Dad, Poor Dad). I did see him briefly on PBS and he wasn't very impressive, but this was only for a few minutes so I can't form an opinion. I did come across this website/article where the author is against Kiyosaki and basically says he's close to a fraud. I thought it was an interesting read and the author spent a lot of time on it (maybe a little too much...)!
The indices are holding up above their moving averages, yet the put/call ratio is bearish. The market sentiment readings (what money managers think) is bearish since the ratio is high (it's a contrarian indicator). The different sectors all appear to be mildly bullish, but there are no cash inflows into mutual funds (there might have been more outflows I think). Two weeks ago the M2 (money supply) increased less than the inflation rate, which is bearish. There's a correlation between M2 growth and stock increases. Last week the reverse happened, M2 outpaced the inflation rate.
I think, from the technical journals I've read this week, the consensus from those managers seem to be that January may be pretty good, but then the rest of the year will be average.
If the year ends up this way, I think I should be able to beat the S&P again.
I have no opinions about Robert Kiyosaki (the author of Rich Dad, Poor Dad). I did see him briefly on PBS and he wasn't very impressive, but this was only for a few minutes so I can't form an opinion. I did come across this website/article where the author is against Kiyosaki and basically says he's close to a fraud. I thought it was an interesting read and the author spent a lot of time on it (maybe a little too much...)!
Tuesday, December 27, 2005
Non-monetary Goals
My last post dealt with my financial goal for 2006: having a year-end net worth of $50,000
I'll be dealing with my portfolio more in the near future because I have enough cash to add a few more positions. I'm slowly making a list of stocks to look through and hopefully I'll get a chance soon. The size of my net worth limits me when looking for stocks. I want to own at least 100 shares. If the stock price is around $32, this would make up roughly 10% of my entire net worth.
I have a few positions north of $32 because of appreciation, but I might be a little uneasy adding more 10% positions. This drastically limits my universe of stocks to choose from, but I should be able to manage.
Now it's time to take a look at my non-monetary goals for 2006. I think it's definitely going to be an exciting year and I want to use my time as efficiently as possible. If I put my mind to it, I should be able to accomplish my goals.
* Start my third degree. I already have degrees in finance and economics, but I really want to work on my math skills. This is an area where it might be hard to teach myself through books, so I want to take classes. I'll be taking classes at a junior college (cheaper!), but I still need to talk to someone. This should happen next week, since the offices are closed. I might be able to finish the degree in 2.5 years
* Travel more. I'm not sure if this is really a goal, but it's something I want to do. After I graduated I did take a short trip to Tokyo, but I wished I went to a few more places (like a road trip across the U.S.).
* Greatly increase my knowledge on options. I'm starting to go through Options as a Strategic Investment (good book) and I want to take this year to really strengthen my option knowledge.
* Play more poker. I've been a fan of poker for awhile, but it has taken a backseat during the past year. I want to study and play more over this next year and sharpen my skills.
I also have to start thinking about my career. I know I'm young and still new at my job (5 months), but it's time I step it up and try to show them other things I can do. I don't want to be a trading/operations assistant forever! The good thing is that I have a great boss who is willing to take time and teach me things.
Looking back at the last five months, I think I've done okay. I've been picking up on the technical analysis materials, I made one good trade so far (the one they bought is up 5%), and I think I showed my ability to grasp different subjects. Now it's time to build on this.
On a different note, Free Money Finance has a Festival of Frugality on the FMF site. Check it out for some good frugal tips.
I'll be dealing with my portfolio more in the near future because I have enough cash to add a few more positions. I'm slowly making a list of stocks to look through and hopefully I'll get a chance soon. The size of my net worth limits me when looking for stocks. I want to own at least 100 shares. If the stock price is around $32, this would make up roughly 10% of my entire net worth.
I have a few positions north of $32 because of appreciation, but I might be a little uneasy adding more 10% positions. This drastically limits my universe of stocks to choose from, but I should be able to manage.
Now it's time to take a look at my non-monetary goals for 2006. I think it's definitely going to be an exciting year and I want to use my time as efficiently as possible. If I put my mind to it, I should be able to accomplish my goals.
* Start my third degree. I already have degrees in finance and economics, but I really want to work on my math skills. This is an area where it might be hard to teach myself through books, so I want to take classes. I'll be taking classes at a junior college (cheaper!), but I still need to talk to someone. This should happen next week, since the offices are closed. I might be able to finish the degree in 2.5 years
* Travel more. I'm not sure if this is really a goal, but it's something I want to do. After I graduated I did take a short trip to Tokyo, but I wished I went to a few more places (like a road trip across the U.S.).
* Greatly increase my knowledge on options. I'm starting to go through Options as a Strategic Investment (good book) and I want to take this year to really strengthen my option knowledge.
* Play more poker. I've been a fan of poker for awhile, but it has taken a backseat during the past year. I want to study and play more over this next year and sharpen my skills.
I also have to start thinking about my career. I know I'm young and still new at my job (5 months), but it's time I step it up and try to show them other things I can do. I don't want to be a trading/operations assistant forever! The good thing is that I have a great boss who is willing to take time and teach me things.
Looking back at the last five months, I think I've done okay. I've been picking up on the technical analysis materials, I made one good trade so far (the one they bought is up 5%), and I think I showed my ability to grasp different subjects. Now it's time to build on this.
On a different note, Free Money Finance has a Festival of Frugality on the FMF site. Check it out for some good frugal tips.
Wednesday, December 21, 2005
2006 Goals
It's almost the end of the year and time to look forward to 2006. I've started to set various types of goals: financial, personal, and educational. For this post I'm going to concentrate on some of my financial goals, and I'll get to the rest in future posts.
My base assumption is that I'm going to hit my 2005 year-end goal of $32,000
I'm almost there and I think it's within reach. It's always nice to hit a goal and this was my hardest one to date.
My next assumption that I made is that I'm going to save 40% of my monthly income. This seems like a high rate, but I have a modest amount of expenses and I'll have enough money left for other things (going out, buying things, etc.) So I'll start with the 40% target and see how it goes from there. Using this target results in saving about $1,140/month, which breaks down to $285/week.
Next, I want to increase my net worth by 10%. This growth rate is for my entire net worth, so cash is included and not just stocks. I think this is a decent growth rate, but if anyone has a better idea I'm open to suggestions. A 10% growth rate translates into roughly 0.83%/month.
There's a reason I'm breaking things done into monthly figures.
These are the inputs I put into my calculator: n = 12 (months); i = .83 (growth rate/month); PV = 32,000 (my starting point); PMT = 1140 (savings per month) and I solve for FV (future value, the end amount).
I come up with an end amount of $49,658
We all like round numbers, so my 2006 goal is $50,000
It seems like a long way off, but the important part is to take it step by step. If I can hit my goals one month at a time, I'll be sure to hit my year end goal.
If for some reason things change (if I get a raise, or another source of income), I'll change the goal. The point of setting up the year end goal is to set up a figure that is slightly out of reach. There's no sense setting a goal of $40,000 when I'll hit that with no problem. Likewise there's no sense in setting a goal of $1 million because the chances of that are small.
As of right now, $50,000 seems a little out of reach- which is why that's my goal.
My base assumption is that I'm going to hit my 2005 year-end goal of $32,000
I'm almost there and I think it's within reach. It's always nice to hit a goal and this was my hardest one to date.
My next assumption that I made is that I'm going to save 40% of my monthly income. This seems like a high rate, but I have a modest amount of expenses and I'll have enough money left for other things (going out, buying things, etc.) So I'll start with the 40% target and see how it goes from there. Using this target results in saving about $1,140/month, which breaks down to $285/week.
Next, I want to increase my net worth by 10%. This growth rate is for my entire net worth, so cash is included and not just stocks. I think this is a decent growth rate, but if anyone has a better idea I'm open to suggestions. A 10% growth rate translates into roughly 0.83%/month.
There's a reason I'm breaking things done into monthly figures.
These are the inputs I put into my calculator: n = 12 (months); i = .83 (growth rate/month); PV = 32,000 (my starting point); PMT = 1140 (savings per month) and I solve for FV (future value, the end amount).
I come up with an end amount of $49,658
We all like round numbers, so my 2006 goal is $50,000
It seems like a long way off, but the important part is to take it step by step. If I can hit my goals one month at a time, I'll be sure to hit my year end goal.
If for some reason things change (if I get a raise, or another source of income), I'll change the goal. The point of setting up the year end goal is to set up a figure that is slightly out of reach. There's no sense setting a goal of $40,000 when I'll hit that with no problem. Likewise there's no sense in setting a goal of $1 million because the chances of that are small.
As of right now, $50,000 seems a little out of reach- which is why that's my goal.
Tuesday, December 20, 2005
You Need a Budget review
Time to review a site/software. I've come across it before and I think it will be useful for some (but not all). The site and software is called You Need a Budget and there should be a link on the right hand side. Before I continue, I just want to point out that I'm not receiving any referral fees or anything like that. So I have no interest if you buy the software or not, I'm just writing about it.
The first thing to mention (besides the cost, under $20) is that you're not only buying some software, but also a budgeting method. The software consists of various Excel spreadsheets that make it easy to follow the method and rules.
The first step is to save one month's expenses and this is a good starting point. This will lead into a zero based budget where all your cash inflows go to a specific category (the second step).
The last two steps deal with unexpected expenses/shortfalls and these are crucial. I've seen a good amount of people who seem to be on a budget, but when something unexpected happens they don't know what to do or where to get the money from. I've (and many other blogs) have stressed the importance of an emergency fund. I do like the last step because it forces you to adjust your budget. If you over-spend in one category, that excess amount is taken away from the amount available next month.
Who is this for? If you're looking for something more complex (taxes, portfolio reviews, etc.) then I would suggest getting Quicken. If you're just looking to start from scratch, learn how to prepare a budget, and stick with it- then it would be worth the time to check out the site. It is a very simple program to use and this could be an advantage for some compared to Quicken (which can get a bit confusing).
So I would say this is for someone who wants something basic and easy to understand. You definitely need to follow the rules and this will be beneficial for those who don't even know where to start. This is one other key advantage. Quicken basically keeps track of everything and assumes you know what you're doing. If you don't know what to do, this software will show you a way.
The first thing to mention (besides the cost, under $20) is that you're not only buying some software, but also a budgeting method. The software consists of various Excel spreadsheets that make it easy to follow the method and rules.
The first step is to save one month's expenses and this is a good starting point. This will lead into a zero based budget where all your cash inflows go to a specific category (the second step).
The last two steps deal with unexpected expenses/shortfalls and these are crucial. I've seen a good amount of people who seem to be on a budget, but when something unexpected happens they don't know what to do or where to get the money from. I've (and many other blogs) have stressed the importance of an emergency fund. I do like the last step because it forces you to adjust your budget. If you over-spend in one category, that excess amount is taken away from the amount available next month.
Who is this for? If you're looking for something more complex (taxes, portfolio reviews, etc.) then I would suggest getting Quicken. If you're just looking to start from scratch, learn how to prepare a budget, and stick with it- then it would be worth the time to check out the site. It is a very simple program to use and this could be an advantage for some compared to Quicken (which can get a bit confusing).
So I would say this is for someone who wants something basic and easy to understand. You definitely need to follow the rules and this will be beneficial for those who don't even know where to start. This is one other key advantage. Quicken basically keeps track of everything and assumes you know what you're doing. If you don't know what to do, this software will show you a way.
Monday, December 19, 2005
Smart Money review
I just received the year-end Smart Money magazine and I usually like to skim through before I read it. This issue recaps their 2005 picks and those apparently beat the market by 114%- not too shabby.
A small article on the Japanese market highlighted: Orix (IX), Nikko Cordial (NIKOY)
A railroad, Genesee & Wyoming (GWR), was highlighted and it seems they are growing through acquisition. This made me want to re-check that Chinese railroad (GSH).
Bill Gross (the Bond King) is a huge stamp collector. This was a small story, but he's a major stamp collector who recently paid a few million for the one stamp missing from his collection. He notes that stamps are good inflation hedges.
Their 2005 guide had some good picks, so I might as well jot down some of their 2006 picks.
In banks they like: Bank of America (BAC) and UBS (UBS)
Biotech: Amgen (AMGN) and Gilead Sciences (GILD)
Healthcare: HCA (HCA) and UnitedHealth (UNH)
Conglomerates: General Electric (GE) and Tyco (TYC)
Energy: ConocoPhillips (COP) and Devon Energy (DVN)
Telecom: Nokia (NOK- which is also on my list to look into) and Qualcomm (QCOM)
The magazine also had a roundtable and here are the picks from that: Bear Stearns (BSC), Burlingto Resources (BR), Murphy Oil (MUR), Phelps Dodge (PD), BG Group (BRG), GOL (GOL), Petrobras (PBR), Rinker (RIN), Anadarko (APC), Centex (CTX), Merrill Lynch (MER), Microsoft (MSFT), and Wal Mart (WMT)
If you have some shopping to do, someone sent me this link with coupons you can print out. There were a few good ones like 30% off any regular priced item from Borders (that one expired today though), and a few other good ones.
A small article on the Japanese market highlighted: Orix (IX), Nikko Cordial (NIKOY)
A railroad, Genesee & Wyoming (GWR), was highlighted and it seems they are growing through acquisition. This made me want to re-check that Chinese railroad (GSH).
Bill Gross (the Bond King) is a huge stamp collector. This was a small story, but he's a major stamp collector who recently paid a few million for the one stamp missing from his collection. He notes that stamps are good inflation hedges.
Their 2005 guide had some good picks, so I might as well jot down some of their 2006 picks.
In banks they like: Bank of America (BAC) and UBS (UBS)
Biotech: Amgen (AMGN) and Gilead Sciences (GILD)
Healthcare: HCA (HCA) and UnitedHealth (UNH)
Conglomerates: General Electric (GE) and Tyco (TYC)
Energy: ConocoPhillips (COP) and Devon Energy (DVN)
Telecom: Nokia (NOK- which is also on my list to look into) and Qualcomm (QCOM)
The magazine also had a roundtable and here are the picks from that: Bear Stearns (BSC), Burlingto Resources (BR), Murphy Oil (MUR), Phelps Dodge (PD), BG Group (BRG), GOL (GOL), Petrobras (PBR), Rinker (RIN), Anadarko (APC), Centex (CTX), Merrill Lynch (MER), Microsoft (MSFT), and Wal Mart (WMT)
If you have some shopping to do, someone sent me this link with coupons you can print out. There were a few good ones like 30% off any regular priced item from Borders (that one expired today though), and a few other good ones.
Thursday, December 15, 2005
So close to the year end goal
I just spent another $275 on gifts and I still have a few more to buy. All the big gifts are done with and now I just need to get a few gift certificates and a few smaller items. I normally calculate my net worth at the end of the month, but since I thought I was close to my year end goal I had to check it mid-month.
I was glad to see that I'm only $500 away from my year end goal of $32,000. I have one more check coming in for $1440 at the end of the month and I don't think I have any more big expenses. I've bought all the big gifts, bought all the stuff for the apartment, and there's only 16 more days to go to end the year. I just somehow need to not spend $935 for the next few weeks and hope that the stock market rallies a bit.
It might be a little close, but I think I can make it. I also wrote up my 2006 goals, and I'll write about those next week.
I was glad to see that I'm only $500 away from my year end goal of $32,000. I have one more check coming in for $1440 at the end of the month and I don't think I have any more big expenses. I've bought all the big gifts, bought all the stuff for the apartment, and there's only 16 more days to go to end the year. I just somehow need to not spend $935 for the next few weeks and hope that the stock market rallies a bit.
It might be a little close, but I think I can make it. I also wrote up my 2006 goals, and I'll write about those next week.
Tuesday, December 13, 2005
Another rate hike
Well, this one was expected and the stock market rallied on the news. Now it's the time when everyone start saying the rate hikes will slow down. I read this article stating that financial stocks may be a good buy because of that reason. The financials definitely had a stronger rally than most stocks. I noticed a good number of them posting strong gains late in the day. If the article is right, you may be able to find some bank stocks now that are trading on the low end of historic valuations and/or have high (and sustainable) yields. For instance, Bank of America (BAC) is yielding about 4.4%.
I'm starting to gather a list of stocks I want to look into because now I think I'll have more time. For some reason a lot of food related stocks are on my list so far. I'm also looking at a few consumer products companies and tech (I think Nokia was on the list, but that has had a big run-up). I also have a couple in mind that are small caps with low volume. I don't want to be over-weight in this sector, but I might be able to find a few.
The other thing I want to start doing is maybe (I've already pointed this out I think) buying a stock based on charts. I have my spreadsheet where I keep track of my longs/shorts. The list is made up of stocks I look through and also stocks that I send to the head trader. I try to go through the list everyday and if I don't like how the chart is shaping I'll "sell" it by putting a dash next to the name. Then I don't keep track of the price anymore. My Long list is doing rather well, with a straight average gain of over 9% since the end of October. The better part is that my profitable "trades" are over 90%. This is mainly due because I started the majority of the list right before the rally. My short list is okay compared to the market. I would expect to be down a few percent, but it's only down about half a percent.
So maybe I'll take a chance and buy a stock every now and then with a shorter time-frame. The risky part is that I won't be able to look deeper into the stock till after I buy it, but it might be a risk worth taking.
One last note: my first options trade resulted in a 1% gain in three days. This was basically my goal, but I haven't made another one yet. I'm re-defining my game plan and reading more on option strategies. I'm currently getting through Options as a Strategic Investment, which is an excellent book.
I'm starting to gather a list of stocks I want to look into because now I think I'll have more time. For some reason a lot of food related stocks are on my list so far. I'm also looking at a few consumer products companies and tech (I think Nokia was on the list, but that has had a big run-up). I also have a couple in mind that are small caps with low volume. I don't want to be over-weight in this sector, but I might be able to find a few.
The other thing I want to start doing is maybe (I've already pointed this out I think) buying a stock based on charts. I have my spreadsheet where I keep track of my longs/shorts. The list is made up of stocks I look through and also stocks that I send to the head trader. I try to go through the list everyday and if I don't like how the chart is shaping I'll "sell" it by putting a dash next to the name. Then I don't keep track of the price anymore. My Long list is doing rather well, with a straight average gain of over 9% since the end of October. The better part is that my profitable "trades" are over 90%. This is mainly due because I started the majority of the list right before the rally. My short list is okay compared to the market. I would expect to be down a few percent, but it's only down about half a percent.
So maybe I'll take a chance and buy a stock every now and then with a shorter time-frame. The risky part is that I won't be able to look deeper into the stock till after I buy it, but it might be a risk worth taking.
One last note: my first options trade resulted in a 1% gain in three days. This was basically my goal, but I haven't made another one yet. I'm re-defining my game plan and reading more on option strategies. I'm currently getting through Options as a Strategic Investment, which is an excellent book.
Monday, December 12, 2005
My plan for next Christmas!
I know it's incredibly early to think about next Christmas, but I did this weekend. I spent a lot of money on presents and also apartment things and I realized I didn't prepare for these cash outflows. I'm still not done with Christmas shopping and hopefully I'll find some deals online.
So my plan for Christmas 2006: ING lets you separate your account into different sub-accounts. For instance, some people have a vacation account within their savings account. This makes it easier to plan things out. Starting in January I'm going to set up a Christmas account in my ING account. Then I'm going to set up a weekly transfer of $10/week to this account. By the end of the year I'll have over $520 (because of interest) ready for the holidays. I know some work places have these types of accounts set up where it will take a little money out of your paycheck. It's worth looking into because they you will be a little more prepared for the end of the year.
I also added a new blog: Market Rider
Also, for some reason my blog template is not working correctly. I might change things later, and possibly move the blog.
So my plan for Christmas 2006: ING lets you separate your account into different sub-accounts. For instance, some people have a vacation account within their savings account. This makes it easier to plan things out. Starting in January I'm going to set up a Christmas account in my ING account. Then I'm going to set up a weekly transfer of $10/week to this account. By the end of the year I'll have over $520 (because of interest) ready for the holidays. I know some work places have these types of accounts set up where it will take a little money out of your paycheck. It's worth looking into because they you will be a little more prepared for the end of the year.
I also added a new blog: Market Rider
Also, for some reason my blog template is not working correctly. I might change things later, and possibly move the blog.
Thursday, December 08, 2005
Quick Post
I finally received my reimbursement check for a little over $200. It was lower than I expected, but the rest rolls over to the next month. I already spent $45 from there on car maintenance...
The big things left to purchase are Christmas gifts. I'm not exactly budgeting anything (but I plan to shop online for a few items). If I had to put a figure on it, I think the total will be under $700. This still seems like an outrageous number, so I'm hoping the total amount comes in less.
I also paid for December rent ($300) and I need to buy some things for the apartment (bed, dresser, a few other items). My year-end goal is going to be hard to hit with all of these incoming expenses!
*I received some emails lately and I haven't got back to them. I will try over the weekend, sorry!
The big things left to purchase are Christmas gifts. I'm not exactly budgeting anything (but I plan to shop online for a few items). If I had to put a figure on it, I think the total will be under $700. This still seems like an outrageous number, so I'm hoping the total amount comes in less.
I also paid for December rent ($300) and I need to buy some things for the apartment (bed, dresser, a few other items). My year-end goal is going to be hard to hit with all of these incoming expenses!
*I received some emails lately and I haven't got back to them. I will try over the weekend, sorry!
Wednesday, December 07, 2005
3 more weeks in 2005
There are three more weeks in 2005 and lately the market is having a hard time ending on a good note. We got our little end year rally that everyone wanted, but now it looks like the markets are giving some of that back. It's been a choppy week or so, and what's going to happen in three weeks to push the markets up? The majority of earnings reports are out, trading (and speculation) will begin to slow as the holidays approach, and things are starting to calm down. Maybe a big news report dealing with a stock (Ford? Time Warner? GM?) although some of those would be negative stories.
One stock I bought a few months ago has been doing rather well lately. TCHC increased their dividends by 50%, sending the stock from about $12 to $15 within the last month. I bought the shares in the $11 range, but my cost basis is less due to dividends.
The Personal Finance Advice blog recently updated a net worth list of finance blogs. I personally think PFA is one of the best blogs out there, so definitely bookmark the site. I'm thinking of a few ways to increase my net worth, we'll see what happens.
Also, Neo's Nest Egg updated a net worth list of bloggers, but this one is in chart form. It's definitely interesting to see how other financial bloggers are improving their net worth; it's also a motivating factor as well.
One stock I bought a few months ago has been doing rather well lately. TCHC increased their dividends by 50%, sending the stock from about $12 to $15 within the last month. I bought the shares in the $11 range, but my cost basis is less due to dividends.
The Personal Finance Advice blog recently updated a net worth list of finance blogs. I personally think PFA is one of the best blogs out there, so definitely bookmark the site. I'm thinking of a few ways to increase my net worth, we'll see what happens.
Also, Neo's Nest Egg updated a net worth list of bloggers, but this one is in chart form. It's definitely interesting to see how other financial bloggers are improving their net worth; it's also a motivating factor as well.
Monday, December 05, 2005
CFA Test Recap
It's finally over with, well for now at least.
After I walked out of the testing center my mind literally felt numb and I really didn't know how I did on the test. Normally after a test I have at least a feeling about how I did, but not for this one.
I got there at 8am and I honestly can't remember the first half of the test. The entire test is 6 hours long split up into two sections. After the first part I felt so-so. Some of the parts I did well on, while other parts were a little cloudy.
We had a lunch break and then the second part started. I started off fairly well, then hit a few tough ethics questions, and then ran into the financial ratios/analysis part. I think I did really well in this part and I felt pretty confident. The last part of the test was okay, a few tricky fixed income questions.
I still don't know how well I did. I'm not sure if I passed or failed, but I do know that if I did fail then I can definitely pass in June.
If you're thinking about taking the test here are my tips
1. Don't do what I did and buy the books. It will take up too much of your time reading and finding the specific parts to read/take notes on. Buy the already made notes from one of the programs.
2. Take the ethics/GIPS (global standards) seriously. Read the entire ethics questions and especially the examples because a few of these were on the test. The GIPS section doesn't seem too bad, but the test had a bunch of questions on it! I was definitely surprised.
3. Buy one of those online packages. From what I'm hearing Schwesser is the best out there. They have notes and the toughest practice tests. If you study well and you're able to pass those exams, you should have no problem for the Level 1.
4. Realize that you do have to know the material, but the test won't cover everything. For instance in the test I took there were zero questions on t & z-stats parts.
5. Get your timing in control. Time rushes by and I barely finished the first section with about five minutes to spare, but you could tell others were not going to finish. I finished the second with about 20 minutes to go, but time flies by!
6. The make up of the test will correspond by section. The first 20 or so questions are on ethics, then quant, then econ, and it continues in the order of the study guide.
Results come out at the end of January...
After I walked out of the testing center my mind literally felt numb and I really didn't know how I did on the test. Normally after a test I have at least a feeling about how I did, but not for this one.
I got there at 8am and I honestly can't remember the first half of the test. The entire test is 6 hours long split up into two sections. After the first part I felt so-so. Some of the parts I did well on, while other parts were a little cloudy.
We had a lunch break and then the second part started. I started off fairly well, then hit a few tough ethics questions, and then ran into the financial ratios/analysis part. I think I did really well in this part and I felt pretty confident. The last part of the test was okay, a few tricky fixed income questions.
I still don't know how well I did. I'm not sure if I passed or failed, but I do know that if I did fail then I can definitely pass in June.
If you're thinking about taking the test here are my tips
1. Don't do what I did and buy the books. It will take up too much of your time reading and finding the specific parts to read/take notes on. Buy the already made notes from one of the programs.
2. Take the ethics/GIPS (global standards) seriously. Read the entire ethics questions and especially the examples because a few of these were on the test. The GIPS section doesn't seem too bad, but the test had a bunch of questions on it! I was definitely surprised.
3. Buy one of those online packages. From what I'm hearing Schwesser is the best out there. They have notes and the toughest practice tests. If you study well and you're able to pass those exams, you should have no problem for the Level 1.
4. Realize that you do have to know the material, but the test won't cover everything. For instance in the test I took there were zero questions on t & z-stats parts.
5. Get your timing in control. Time rushes by and I barely finished the first section with about five minutes to spare, but you could tell others were not going to finish. I finished the second with about 20 minutes to go, but time flies by!
6. The make up of the test will correspond by section. The first 20 or so questions are on ethics, then quant, then econ, and it continues in the order of the study guide.
Results come out at the end of January...
Wednesday, November 30, 2005
End of Month Update
Time to do another end of month update to see how things are going.
This month I did manage to keep my expenses in line. It's a little less than what's showing on my bank statement because I'm getting some money back. For instance, this month I bought probably $400 worth of concert tickets (because I bought tickets for friends at the same time) so I will get the majority of that back.
I'm definitely getting ready for December, because of some planned purchases (I'll get to that below)
November '05 Net Worth: $31,030
This represents a little over a 7% gain from last month due to lower expenses and increases in my brokerage account. Overall I'm pretty happy with that figure, since it's a little higher than I expected. Psychologically, it's also nice to finally get past the 20 digits mark.
December: I don't think the market will continue to rally, but rather cool off a bit. So I'm expecting a slight decline in my brokerage account (although normally December is a good month for the market). I should bring in close to $2900 from work, but I will have extra expenses. I'm also still waiting for my reimbursement check for $280.
The big one is that I'm moving into an apartment in the middle of the month. I'll need to pay half the monthly rent, so $300. Deposit for my room is 1/3 of the total rent, so that will be another $667. I'm not sure if I'll count this against me, since it's technically still my money.
Then Christmas is near so I'm going to do some shopping. I'm not too sure how much I'll end up spending, but it will include a few big items. For instance I'm buying my parents a digital camera/printer, but I should be able to find a deal online.
Overall things are going okay, but they could be better. I'm $970 away from my year end goal with just a month to go. Monthly inflows should be $3100, which leaves me with $2130 to spare. Then probably $1200 for rent/expenses, fluctuations in my account, and Christmas shopping- my year end goal might be in jeopardy (but it won't be the end of the world).
This month I did manage to keep my expenses in line. It's a little less than what's showing on my bank statement because I'm getting some money back. For instance, this month I bought probably $400 worth of concert tickets (because I bought tickets for friends at the same time) so I will get the majority of that back.
I'm definitely getting ready for December, because of some planned purchases (I'll get to that below)
November '05 Net Worth: $31,030
This represents a little over a 7% gain from last month due to lower expenses and increases in my brokerage account. Overall I'm pretty happy with that figure, since it's a little higher than I expected. Psychologically, it's also nice to finally get past the 20 digits mark.
December: I don't think the market will continue to rally, but rather cool off a bit. So I'm expecting a slight decline in my brokerage account (although normally December is a good month for the market). I should bring in close to $2900 from work, but I will have extra expenses. I'm also still waiting for my reimbursement check for $280.
The big one is that I'm moving into an apartment in the middle of the month. I'll need to pay half the monthly rent, so $300. Deposit for my room is 1/3 of the total rent, so that will be another $667. I'm not sure if I'll count this against me, since it's technically still my money.
Then Christmas is near so I'm going to do some shopping. I'm not too sure how much I'll end up spending, but it will include a few big items. For instance I'm buying my parents a digital camera/printer, but I should be able to find a deal online.
Overall things are going okay, but they could be better. I'm $970 away from my year end goal with just a month to go. Monthly inflows should be $3100, which leaves me with $2130 to spare. Then probably $1200 for rent/expenses, fluctuations in my account, and Christmas shopping- my year end goal might be in jeopardy (but it won't be the end of the world).
Tuesday, November 29, 2005
Some nice work news
I've been slacking with my personal finance or stock market posts, and well I'm going to slack on that once again (although an end of the month net worth should be coming soon).
I received some good news today at work. The head trader told me that we're going to try something new. Previously I've been using technical analysis to find stocks/industries that look interesting either on the long or short side. I did okay and I picked up on some of the technical analysis parts. I'm also starting to form a basis for that side of investing. For instance, I like to stick to RSI, MACD, and trends within these as well as moving averages.
Now the new part: previously everything was just paper trades. I would put down some stocks and give a few reasons. Now my picks might go into the real portfolio! Of course, he's going to make me start small (but I'm not exactly sure how much that means). Anyways now I'm looking for one or two good ideas that I can back-up with some strong reasons. If I'm able to do that and he thinks my reasonings are sound, we'll (okay he will) buy/short them.
I was pretty excited to hear the news and hopefully I find something good.
I received some good news today at work. The head trader told me that we're going to try something new. Previously I've been using technical analysis to find stocks/industries that look interesting either on the long or short side. I did okay and I picked up on some of the technical analysis parts. I'm also starting to form a basis for that side of investing. For instance, I like to stick to RSI, MACD, and trends within these as well as moving averages.
Now the new part: previously everything was just paper trades. I would put down some stocks and give a few reasons. Now my picks might go into the real portfolio! Of course, he's going to make me start small (but I'm not exactly sure how much that means). Anyways now I'm looking for one or two good ideas that I can back-up with some strong reasons. If I'm able to do that and he thinks my reasonings are sound, we'll (okay he will) buy/short them.
I was pretty excited to hear the news and hopefully I find something good.
Monday, November 28, 2005
CFA Update
I'm taking the CFA test this Saturday and I think I'm on the border in terms of being prepared.
Looking back I should have bought the notes from the start, rather than buying the books. I tend to do better by reading the material myself and then writing my own notes, but for this test there is just way too much information to cover! I think if I had bought the notes to begin with, I would be feeling really confident right now.
Now I'm a little shaky. There are 18 sections of different weightings and I'm good with some of them. I'm spending this week reviewing the harder sections and making sure I know how to use the specific type of calculator (some of the keys are different).
The sections I need to work on: Ethics (just because this is probably worth the most), the second part of the math section (I still hate hypothesis tests!), and the financial accounting parts.
I want to read through the econ sections and make sure I know the equations. I think I'm ready in the corporate, equity, securities markets, and fixed income sections. It's definitely going to be a challenge, but I'm going to try my best. I figured if I don't pass it might be better in the long run because then I will put an extra 6 months of studying into these topics and form a strong foundation.
But I rather pass!
Looking back I should have bought the notes from the start, rather than buying the books. I tend to do better by reading the material myself and then writing my own notes, but for this test there is just way too much information to cover! I think if I had bought the notes to begin with, I would be feeling really confident right now.
Now I'm a little shaky. There are 18 sections of different weightings and I'm good with some of them. I'm spending this week reviewing the harder sections and making sure I know how to use the specific type of calculator (some of the keys are different).
The sections I need to work on: Ethics (just because this is probably worth the most), the second part of the math section (I still hate hypothesis tests!), and the financial accounting parts.
I want to read through the econ sections and make sure I know the equations. I think I'm ready in the corporate, equity, securities markets, and fixed income sections. It's definitely going to be a challenge, but I'm going to try my best. I figured if I don't pass it might be better in the long run because then I will put an extra 6 months of studying into these topics and form a strong foundation.
But I rather pass!
Wednesday, November 23, 2005
Happy Thanksgiving
I'll just make a quick comment first. So far, Quicken is a really cool piece of software. I'm still updating my info and getting things organized, but it is really easy to use. When you first set it up, it basically does everything for you. I think it took me literally five minutes and I was able to have my credit card info, bank info, ING, and brokerage transactions downloaded into the program.
I'll write more on it as I learn more, but so far it looks to be a good buy.
I just wanted to wish anyone reading this a happy thanksgiving. Use this time to forget about your stocks, savings, put your frugality aside, and spend some time with family (and in my case I plan on sleeping in).
I'll be back on Monday!
I'll write more on it as I learn more, but so far it looks to be a good buy.
I just wanted to wish anyone reading this a happy thanksgiving. Use this time to forget about your stocks, savings, put your frugality aside, and spend some time with family (and in my case I plan on sleeping in).
I'll be back on Monday!
Tuesday, November 22, 2005
End of Year Rally
The markets had another good day today and as you can see here the S&P has been fantastic recently. So can it continue? I don't think it will continue at this pace and based on a few technicals you could argue that it will settle down a bit (possibly over-bought). It has been a tough year and it does look like the indexes will end in the positive territory. It's always good to remember these types of years because then you realize that it's hard to end up positive. During the bubble people were taking these double digit returns for granted. It's definitely important to realize that we'll go through tough years. Sometime in the future the markets will end in negative territory, so be prepared.
ENR finally stabilized and then rose quite a bit. It has gained about 9% in the last five days.
I'm still looking at consumer stocks: Campbell's Soup (but then it went up), SLE (maybe stabilizing a bit), HNZ (but the trading is really choppy), and a few others that are at work and have slipped my mind.
One last note
I figured if I have to read/study this stuff, then I'm going to put it here too
CFA tidbit of the day: An impairment writedown decreases assets, deferred taxes, shareholders equity (retained earnings), current net income, ROA/ROE, and depreciation expense. Assets carried at more than their recoverable value are considered impairs.
Fun stuff right?....
ENR finally stabilized and then rose quite a bit. It has gained about 9% in the last five days.
I'm still looking at consumer stocks: Campbell's Soup (but then it went up), SLE (maybe stabilizing a bit), HNZ (but the trading is really choppy), and a few others that are at work and have slipped my mind.
One last note
I figured if I have to read/study this stuff, then I'm going to put it here too
CFA tidbit of the day: An impairment writedown decreases assets, deferred taxes, shareholders equity (retained earnings), current net income, ROA/ROE, and depreciation expense. Assets carried at more than their recoverable value are considered impairs.
Fun stuff right?....
Monday, November 21, 2005
An expensive weekend and a day of green
This weekend I went a little overboard in the spending category by buying a good amount of things (the biggest item was concert tickets, which set me back about $120). I ended up selling two other concert tickets, so that helped out a bit. I definitely like saving my money, but I also want to have fun. That's the balance I need to perform. My savings would definitely be a lot higher if I was incredibly frugal, but how much fun is that? Basically, I don't want to miss out on certain fun things just to save a few bucks.
Everything on my screen ended up in the green except for three stocks. It was a pretty wild day with a few of the tickers. I glance at a few of them throughout the day and today I noticed Google down all the way to $393 and then it finished the day up to almost $410.
Also Jones Soda was approved to be on the Nasdaq Small Cap, and hopefully this brings a little more liquidity. It ended the day up 2.45%
Everything on my screen ended up in the green except for three stocks. It was a pretty wild day with a few of the tickers. I glance at a few of them throughout the day and today I noticed Google down all the way to $393 and then it finished the day up to almost $410.
Also Jones Soda was approved to be on the Nasdaq Small Cap, and hopefully this brings a little more liquidity. It ended the day up 2.45%
Wednesday, November 16, 2005
Inverted Yield Curves
I read an interesting article in today's journal about bonds.
The difference between the yield of the 2 year Treasury note and 10 year Treasury note is less than 0.09 percent. Historically the average is around 0.75 percentage points, but now we're closer to an inverted yield curve when the short term yields become higher than the long term rates.
Here's a quote from the article: "In the past three decades, the Fed has tightened eight times and inverted the curve five of those times. And of those five, all landed the economy in recession a year later." This, along with a possible peak in the housing market, Americans not saving, and rising costs (example: packaging costs are going up so Kraft will pass those higher prices to the consumer), may bring hard times according to some.
I think I'm going to subscribe to Barron's. I just got a note in the mail and I can get a 1 year subscription for only $72. I'm fairly sure this is the cheapest I've ever seen the subscription and it's a good newspaper. I figured I'll start it in this month since November expenses are actually really low so far.
The difference between the yield of the 2 year Treasury note and 10 year Treasury note is less than 0.09 percent. Historically the average is around 0.75 percentage points, but now we're closer to an inverted yield curve when the short term yields become higher than the long term rates.
Here's a quote from the article: "In the past three decades, the Fed has tightened eight times and inverted the curve five of those times. And of those five, all landed the economy in recession a year later." This, along with a possible peak in the housing market, Americans not saving, and rising costs (example: packaging costs are going up so Kraft will pass those higher prices to the consumer), may bring hard times according to some.
I think I'm going to subscribe to Barron's. I just got a note in the mail and I can get a 1 year subscription for only $72. I'm fairly sure this is the cheapest I've ever seen the subscription and it's a good newspaper. I figured I'll start it in this month since November expenses are actually really low so far.
Monday, November 14, 2005
Quicken Premier
One of my side goals for 2005 was to get myself a little more organized. I don't have a file system set up and my desktop is cluttered with icons. Normally when I start something I might try a few different ways before ending up with something I like. For instance, when I started calculating my net worth I made up three different spreadsheets: one was basic, the other two were more detailed. I ended up keeping all three, but I only update one monthly.
My brokerage statements? I used to download and save them, but I stopped doing that awhile back. So now I have various months on my laptop and everything else is online.
Well hopefully I'm taking a step in the right direction by my purchase of Quicken Premier. I chose premier over deluxe because this one has more investment features. I bought the software off eBay for around $25. I thought this was a great deal considering I saw it online for $40+
I figured that by actually spending a little money it will force me to actually use the program.
Once I get it and learn how to use it, I'll try to post a review.
TCHC is up about 10% for me and they came out with a pretty good report. They guided EPS of $4/share next year. That doesn't sound incredibly special until you notice that the stock price is $12. This basically translates into a forward p/e of 3 with a 2.6% dividend yield.
The catch? They based the $4 EPS on *zero* hurricanes next year (they are based in Florida).
They did note that for every hurricane EPS will drop by 36 cents or so. Some of the analysts seemed bullish and it seems people think this is a $20 stock. It is insurance, which I don't know too much about, so I might ask one of the analysts at work for some tips on how to evaluate an insurance company.
My brokerage statements? I used to download and save them, but I stopped doing that awhile back. So now I have various months on my laptop and everything else is online.
Well hopefully I'm taking a step in the right direction by my purchase of Quicken Premier. I chose premier over deluxe because this one has more investment features. I bought the software off eBay for around $25. I thought this was a great deal considering I saw it online for $40+
I figured that by actually spending a little money it will force me to actually use the program.
Once I get it and learn how to use it, I'll try to post a review.
TCHC is up about 10% for me and they came out with a pretty good report. They guided EPS of $4/share next year. That doesn't sound incredibly special until you notice that the stock price is $12. This basically translates into a forward p/e of 3 with a 2.6% dividend yield.
The catch? They based the $4 EPS on *zero* hurricanes next year (they are based in Florida).
They did note that for every hurricane EPS will drop by 36 cents or so. Some of the analysts seemed bullish and it seems people think this is a $20 stock. It is insurance, which I don't know too much about, so I might ask one of the analysts at work for some tips on how to evaluate an insurance company.
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