October 2007 Score Card — Part I: Net Worth

The Federal Reserve gave investors a Halloween treat yesterday by cutting the key lending rate a quarter-percentage point. The second rate cut in two months gave the stock markets a boost, pushing major indices up more than 1% Wednesday to finish the month on a strong note. For the month, the Dow gained 0.3% to 13,930.01, the S&P 500 rose 1.5% to 1,549.38, and the NASDAQ surged 5.8% to 2,859.12.

Our net worth also saw a robust growth last month, though the gain was smaller than last month. Comparing to the end of September, our net worth added $43,944, (7.14%) to a total of $659,403.

The details of our investable assets at the end of October are as follows:

• Credit card balance: The credit card balance was reduced by $2,356, or 2.45%, last month to a total of $94,004. This month, about $77,000 will be returned to two credit cards from which I borrowed money for free early this year. Once that part is gone, the total credit card balance will be much smaller, but so will be the cash savings. Currently I still have about $17,000 from Citi at 0% APR, which will expire next February.
• Cash: As of October 31, we have a total of $137,129 in a number of bank accounts. The cash amount actually decreased by $5,114, or 3.60%, last month as I moved $7,000 to my E-Trade Global Trading account for the upcoming Alibaba.com IPO. After the latest rate cut, the interest rates for online banks will soon be lowered again (ING already dropped its rate from 4.30% to 4.20%).
• Taxable accounts: Our stock investments again performed very well last month, thanks to the strong gains from Chinese stocks in our holdings. For the month, our taxable investment accounts increased by $36,824 (including $7,000 uninvested money in E-Trade), or 11.82%, to reach a total of $348,506. Particularly, China Life Insurance (LFC) and E-House Holdings (EJ) both gained more than $10 in October. The PowerShares China ETF (PGJ) also had a very good month, adding more than $5. Losers in October include NJ, BX, and XFML.
• Retirement accounts: The net increase in our retirement accounts last month was a moderate $8,968, or 3.83%. On October 31, the market value of our retirement accounts is $243,136.
• 529 plans: Our daughters’ 529 plans’ market value increased by $759.11, or 6.75% last month, including $600 monthly contributions. At the end of last month, we have a total of $11,247 in 529 plan accounts.
• Bonds: For the month our bond investments gained $140, or 1.12%, to a $12,628. Most of the increase came from our monthly purchase of $100 I-bond. After dropping to 3.333% APR one month ago, rates of 4-week T-bill rebounded last month. The latest rate is at 4.049% APR. Still not a good option for short term investments.

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