February 2008 Score Card — Part I: Net Worth

Posted by Sun on March 3, 2008

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The harsh reality that the Dow lost more than 430 points in the last two trading days of February didn’t help when it comes the time to count our nest eggs. In fact, the benchmark held a little gain when the market closed on February 27th. But all three major indices sold off on the extra day of this February, thanks to the once-every-four-years-leap-year, after government reports showed slowing economic activities (durable goods orders) and increasing employment pressure (weekly unemployment rate).

For the month, the Dow dropped 384 points, or 3.04%, to 12,266, the S&P lost 48 points, or 3.48%, to 1,330.63, and the DASDAQ declined 118 points, or 4.95%, to 2,271.48.

Despite another bloody month for the stock markets, I was pleasantly surprised when I found that we almost broke even in February. After three consecutive months of decline, our investment account actually bounced back a little bit, though overall we are still in red last month. On February 29th, our net worth was at $550,742. Comparing to a month early, it dropped a mere $779, or 0.14%.

February net worth

Here’s what it looks like in each category:

Credit card balance: The credit card balance at the end of February was almost identical to the previous month. At $19,293, the overall balance was $64, or 0.34%, less than what we had at the end of January. Last month, I paid off balance transfer from one card, but took another one for 12 months to pay our car loan.
Cash: Our cash reserve took a hit last month as we 1) made first quarter contributions to our IRA accounts; 2) paid our semi-annual auto and home insurance; 3) returned the remaining $15,000 from a Citi balance transfer that expired last month, though my wife also received her 2007 bonus. Also, I started to contribute to my 401(k) plan last month and that helped slow the growth of our cash. Overall, we had $58,667 in our bank accounts, down $7,292, or 11.06% from a month early.
Taxable accounts: As bad as February was for the stock markets, we managed to gain a little bit in our taxable investment accounts, though the gain was no where close to the massive losses we have suffered in the past four months. At the end of February, we had a total of $259,717 in a number of brokerage accounts. The increase of $3,616 in our investment accounts represents a 1.41% positive change in February. Despite the gain, I am not sure whether the freefall is over. Things can still go bad in the next several months as the uncertainty in the stocks market is expected to continue.
Retirement accounts: Our retirement savings also rose a bit last month, largely due to the $2,500 new contributions to our Roth IRAs. As of February 29th, we had $224,382 in our 401(k) and IRA accounts. Compared to what we had one month ago, our retirement accounts added $1,308 to a total of $224,382. Without the new money, we could be in red again Since most of investments in retirement accounts are index funds, the performance reflected the general market condition.
529 plans: Our daughters’ 529 plans have been the the lone bright spot in our investments for a while and February was no exception. The total market value of our college savings accounts grew 3.05% to $12,901. That’s a net increase of $381 which is equivalent to a 3.05% gain.
Bonds: Last month, the bond portion added $139, of which $100 came from new purchase of I-bonds. On February 29th, we have a total of $13,223 in I-bonds.