What are hedge funds?

If you are at all interested in finance, and especially if you are interested in working in finance or are currently in a finance role and looking at what else you can do then you would have heard of hedge funds.  They have been in the news a lot recently however they are not really a new concept.  We hear of billions of dollars being made for the owners of these funds and the spectacular returns they offer their clients.  Less often we hear about their spectacular falls from grace as well.

However when you really think about it - it is actually hard to nail down what a hedge fund is in a simple sentence.  This is because it is not a homogeneous beast.  They use many different strategies to invest money all with the intention of providing a return to their investors.

This post will cover the basics of what makes a fund a hedge fund.   I will do a post soon on the different strategies that hedge funds use to make money.

What is a hedge fund

Traditionally hedge funds referred to funds that attempted to generate returns that were uncorrelated with market returns - that is they were 'absolute return' funds.  However more recently the name has become associated more with the structure of the fund and the class of investors that it caters to rather than the investment strategy.

Hedge funds, like all other investment vehicles are regulated by the market in which they operate.  In the United States, and in most jurisdictions they cater almost exclusively to rich investors and so are less regulated than those funds which cater to retail investors and so have much more stringent prospectus and risk requirements.

How are hedge funds structured

This discussion will focus on the average hedge fund.  Because it is such a broad term it is possible to find exceptions to almost all the rules of thumb outlined below.  However when one uses the term hedge fund this is typically what they are talking about:

• Most often set up as private investment partnerships that are open to a limited number of investors and require a large initial investment
• This reduces the amount of disclosure that the fund is required to make, both to regulators and also reduces the limits on what they can do with their investment portfolio
• In the US, the majority of investors must be 'accredited', that is they must earn a certain minimum amount of money and have a net worth over $1 million.  Investopedia describes it as a 'mutual fund for the mega rich'
  
• Hedge funds are open ended however require a minimum investment period
• Open ended funds means that investors can add and withdraw capital however as hedge fund strategies often require time to play out they often require investors to keep their money within the fund for a certain period of time
  
• Have much higher fees than ordinary mutual funds
• This is a characteristic of

What are Self Managed Superannuation Funds and are they a good idea?

This is a sponsored post.  It was done in partnership with Clime, an Australian based fund manager.  All the content included in this article is my own and I have not had to have it 'approved' or vetted in any way.  I am happy to do sponsored posts where there is no interference in the content of my post.

This post is all about self managed superannuation funds.  It will cover the topics such as 'what is a self managed super fund (SMSF)?', 'why you would want to use them?' and 'when do they make sense and when do they not?'

What is a self managed super fund?

In essence a self managed super fund is a small superannuation trust which is set up for the benefit of an extremely limited group (1 - 4) of members.  It is a mini version of the large superannuation funds out there but instead of being pooled with thousands of other investors, this superannuation trust is only for the benefit of a select group.

Why would you set up a SMSF?

The primary reason people set up SMSFs is because they want more control over the investment process and assets within the SMSF.  This can be for a variety of reasons including:

• They are able to more closely tailor the investments in the portfolio to their personal circumstances
• For example by duration matching investments compared to when the individual investor will need the cash
• They believe that they are better able to make investment decisions than investment managers
• This is one of the primary reasons that people choose to set up a SMSF however it comes with it's downsides
• It is all well and good to believe that you can do better than the fund managers who are currently managing your superannuation money but have a go at doing it yourself (with a phantom portfolio) and see how you go before doing it
• The extra level of control over the investments also means that you can choose investments that you are confident with
• I argue that people should only invest in what they understand - it also often means that they can get better results than if they trust other people to do their investing
• For example if you want a property investment and are a particularly adept investor in property there is a possibility that you can get a better return from your own investment than a property fund that is part of a large superannuation fund

There are also some other reasons people set up SMSFs including:

• You can save money
• The amount of money you can save often has to do with scale
• There are quite significant fees associated with running an SMSF - see the section below on what you have to do when you have an SMSF - so in order for the fee savings to work you need to have a significant amount in your self managed super fund
• MoneySmart, the Australian government's financial advice website recommends having at least $200,000 in superannuation before setting up an SMSF

What are the downsides to setting up a SMSF?

The real downsides from SMSFs come from the time and effort you need to invest in it.  For many of us, superannuation is just a

Should I write sponsored posts?

On this lovely Friday I thought I would throw out a question for all the readers of my blog; Should I do sponsored posts?

A little background

Many readers know that I started this blog originally just to track my net worth to my goal of 90 million.  Hence the name of my blog: Journey to 90 million.  However since then it has spawned into something I didn't quite expect and I have really become dedicated to updating this blog on daily basis.

It was never my intention to make money from this blog.  As at writing this post I have well over 300 posts and the advertisements I have on the sidebar and top of the bar barely generate any revenue.  Put it this way...Google sends you a check every time you reach A$150 of advertising revenue and I have yet to receive my first check in over 2 years of posting.  That's not a great income generator in anyone's book.

That being said, I am not averse to generating income from the blog as long as I get to maintain the reputation of the blog.  This is why when I do book reviews I'll generally put a link to different book sites you can buy them from and theoretically I get affiliate revenue any time someone clicks on the link and buys the book.  So far I have not really made money off this either.

I was quite content to go on posting on this blog because I genuinely enjoy doing it when an opportunity arose recently that I was reasonably tempted by.  I was offered a sponsored posts on a topic I was actually already drafting.  The way it works is this: I write a post I was going to write anyway and someone pays me sum to put a link to their business in the post along with a keyword.

My question to readers...

My question to my readers is this.  If all the material is still

Investment review: Did my exchange rate idea work out?

Approximately 18 months ago I did a post on the exchange rate opportunity that could be exploited using foreign index funds because the Australian currency was so strong coupled with extremely weak share markets overseas.   I also ran through a very specific example of an investment I had made in the FTSE100 which was to take advantage of the weak pound as well as the weak English share market.

This post will be a review of that idea 18 months down the track, along with an assessment of how I thought about the investment along the way.

So how did it turn out?

As it turns out, this was a rather good investment to make and I have been very pleased with the results.  The chart below shows the performance of the investment over time.

Performance of the index
The blue line is the performance of the index fund (ISF) in pounds.  In the circa 18 months that I owned it the index returned 16.3% plus another ~2% in dividends over that time so approximately 18.3% return over 18 months.  This is annualised return of ~11.8% which I am very happy with in itself.

Performance including the currency effect
However the kicker (and the original point of the investment) was the return benefit that the exchange rate would give when it returned to 'normal' levels.  It has not yet returned to normal levels but it is certainly going in the right direction.  The A$ depreciated by 9.7% against the GBP in the 18 months.  This resulted in a total A$ return on the ISF investment of 27.6% before dividends or ~29.6% after dividends over the 18 months.  This is an annualised return of ~18.8%.

I had no idea that the performance of the UK share market would be strong over that period, the real underlying reason was that the currency gave me protection on the downside and provided significant upside in the event that it returned to normal levels.

...however during the investment period it did not always look so happy!

The chart below shows the return on investment over time.  The red line represents the A$ performance of the investment and the blue line represents the GBP performance of the investment.

For the first few months of the investment, it did not seem to be a great investment.  Indeed the share price was not really going anywhere and the currency movements made me think I had missed the boat at times.  However I had in mind what I thought a fair price for the currency was so I continued to wait and of late, even though the share price has come off significantly in GBP, the fall in the A$ has been so sharp that this has not had a real impact on the A$ return.

So did I sell out of this investment?

Not yet.  I still do not think the Australian dollar is at fair value even though it has fallen significantly.  I think there is a little way to go.  Although I think the same trade is still available, the level of upside is not what it was 18 months ago so I probably will not be throwing more money into this investment strategy.

Was it just a fluke?

Did I just happen to pick the right currency and the right share market?  Was it just a fluke?  I don't think so.  I actually did the same trade with a much larger amount of money into the US market and the returns from that have been even more impressive than the returns I outlined above.  The reason I went through this example in the post is because it is the one I posted about 18 months ago.

Note that this is one of the investments I made that came off.  Next week I'll post about one that continues to cause me significant pain that I posted about several times in the past. I have no problem admitting my losses and it is worth all those who are new to investing to know that you can still get good portfolio returns even when you have a couple of dogs in your portfolio.

As always this is not investment advice.  Just a demonstration of what I have done and make sure you think through your own investments and use qualified advisers if you require it.

You May Also Be Interested In:
Investing in foreign index funds: an exchange rate opportunity
Foreign index funds: An example
Investment strategy: All Posts
Stocks: All Posts

Negative political advertisements about the economy have ALREADY started

I don't often watch television however happened to have very little to do a few days ago and so noticed something I wouldn't have ordinarily noticed.  The negative political advertisements about the economy have ALREADY started.  They have started before a general election has been called and, like most political advertising, is so biased an inaccurate as to be rather misleading.

For all my international readers, this post will be a complaint about the Australian electoral cycle however you may get some benefit when thinking about advertising in your home districts when you go through election cycles.

What sort of advertisements am I talking about?

I tried to find videos on YouTube which illustrated my point but appears that Australians do not bother enough to put their political advertising on YouTube and thankfully our politicians are not yet internet savvy enough to deploy the full gambit of internet advertising.  Alas, that means that I will need to describe for you the type of advertising I am talking about.

The particular advertisement that got to me was one in which the Liberal party pointed out that the Australian government was running up a deficit of $100m a day in 2009/2010 when Kevin Rudd was last leader of the Australian Labor party.   The implication of course being that with him now back in control, if you vote for him he is going to destroy the economy and pile on the national debt again.

It reminded me of an advertisement a few election cycles ago where the basic argument was that you could not trust the opposition party because every time they were in power interest rates rose, thus if you put them in power again, the interest rate that you pay on your home loan will go up again.

This happens at EVERY election cycle.  And both sides of politics play this game with different issues.  I am particularly concerned about economic policy and the Liberal party is typically the one that runs the advertisements about how the Labor party is going to ruin the economy and look at their past record.  The Labor party does it about other issues such as how the Liberal party cronies up the businesses and sticks it to the ordinary Australian worker.

Why do I hate these sort of advertisements?

I am passionately against any sort of advertising that relies on the fact that your electorate is uninformed and which feeds them a simplistic

Why are sector funds so much more expensive than broad based funds?

If you invest in exchange traded index funds (ETFs) at all, you will have noticed that broad based index ETFs (which cover whole markets such as the Australian sharemarket or the US sharemarket) tend to have much lower expense ratios than those exchange traded index funds which cover specific sectors such as utilities, resources or financials.

I only recently started investing in sector ETFs after I saw an opportunity present itself in the resources sector a few months ago.  As I researched the possibilities though, the cost of the sector ETFs, especially in the Australian market really struck me.  Management expense ratio's are incredibly important when it comes to weighting up whether to invest in a particular managed fund (whether exchange traded or not).  In fact, over the long run it has a huge impact on your performance relative to the benchmark you are trying to beat.  The question therefore becomes:

Why do sector specific ETFs cost so much more than index ETFs?

I believe there are several factors which influence the MER for sector funds versus broad based index funds

Can I say upfront, that although I tried to research this I was not able to find any particularly good sources of information out there about why this is the case.  These conclusions are therefore my own. I am happy to be corrected on any of them or for additional reasons to be added.  If you have any suggestions please add them to the comments bar or send me an email and I'll be happy to include them.

I don't think there is any one defining factor which causes the costs for sector index funds to be higher than broad based index funds.  I think it is due to several factors which include:

1. Sector ETFs are typically smaller and so transaction costs are higher as a proportion of funds under management
• There is a significant difference between the

Saving Tip: Out of sight - Out of Mind

As we all know, budgeting and saving are inherently linked.  But as anyone who has tried to stick to a budget knows...things always come out of the blue and although you promised yourself that you should save a certain amount this month it is always less than you imagined.

I have one major tip which should help you improve your savings pattern.  It is a variation on the 'Pay Yourself First' idea that so many self help financial books seem to promote but which I never really got my head around so here it is:

Pay your bills first, put a set amount aside for your monthly spend and the REST gets transferred, ON PAY DAY to a savings account which you don't have easy access to

The key to this is making sure that the cash you are saving is OUT OF SIGHT because if it is, the chances are you wont think about it when you are thinking of spending money.

So...How does it work?

It's quite simple.  You do this

The free market is NOT perfect: Property rights improve efficiencies

As outlined in my last post on this topic - 'The free market is NOT perfect: Knowing Economics 101 is not enough' - I will be doing a series of posts rebutting the claims of free market advocates masquerading as 'libertarians' that we would all be better off if the government was not involved in the free market.  Indeed the only way to create a more efficient society where everyone is better off is if the government stopped getting involved.

These points of view have been gaining momentum in recent times, especially in the United States, although I have noticed more and more people starting to join libertarian type organisations here in Australia as well.  Indeed, in the lead up to an election, these voices tend to get significantly louder.  I will be rebutting many of their claims in the coming weeks - however I am by no means left-leaning in my preferred economic outlook.  I believe that market mechanisms are broadly the most efficient because they most closely play to the human condition.  However I believe that the market is NOT perfect and that regulation and intervention is needed to maximise efficiencies.

If you want a truly free market...give up property rights

Free market advocates and the libertarian strain of these in particular rail against rules, regulations and government intervention in the operations of the markets claiming that all this does is create inefficiencies.

Fine libertarians...if you don't like rules and regulations then the first thing I want you to give up is property rights and see what that does to market efficiency.

Property rights form no part of a true free market economy.  By property rights I mean the right to

• Intellectual property rights including
• Patents
• Trademarks
• Physical property rights

If you truly want a free market

Positive Dilemma: Is it an issue if your property becomes positively geared?

In Australia, one of the biggest benefits of investing in property, or borrowing significantly to invest in any investment class (including shares) is the presence of negative gearing.  That is, you can claim a portion of your losses (your effective tax rate) back against your other earned income.

Although a loss is always a loss negative gearing allows you to

• Supercharge your investment returns by investing less cash and using leverage to maximise the growth in your invested capital
• Have lower holding costs while you wait for capital growth to give you the returns mentioned above

How to investment properties become positively geared?

There are several ways that this can happen without you even noticing it:

1. You have been paying down a little bit of principal every month or have been contributing to an offset account and your interest bill becomes lower than the rent
• This is a really common way for investment properties to become positively geared
• You have managed to save so well and pay down your debt so aggressively that your investment property is now throwing off cash to you each month
2. Interest rates have fallen
• Typically we pay more attention when interest rates are rising because we know that we probably need to contribute a little bit more each month
• However when interest rates are falling most people do not tend to take as much notice
• It is entirely possible for interest rates to fall so much that your property goes from negatively geared to positively geared very quickly
3. The rent you charge goes up
• It is perfectly normal to increase the rent you charge ever year
• Because the incremental amount is so small (i.e. typically $5 - $10 a week) we tend not to notice it on a month to month basis 
• However over a few years it definitely narrows the gap between what you are paying in interest and what you receive from your tenants

Why does this cause a dilemma?

There are several investment books (which I don't like) which bemoan the fact that people are so focused on negative gearing and promote the idea that positively geared properties are ideal because 'they put money in your pocket each month instead of taking it out.  This is only right at a very simplistic level.

However it is not so simple if you think about your whole portfolio, instead if this investment in isolation.  What you should actually think about is: 

What the opportunity cost of having your funds invested in this property versus in another product?  

As I mentioned earlier what negative gearing allows

Emissions Trading Schemes...why would a conservative party oppose it?

If you live in Australia you will know that the Prime Minister, Kevin Rudd, announced that he wanted to move from a carbon tax to an emissions trading scheme (ETS) next year.  What was baffling to me, was the response of the opposition leader, Tony Abbott who is looking (according to the polls) like almost certainly being Australia's next Prime Minister.

I suggest reading this article for a brief overview on the comments made by both parties and I will do a brief overview of why I think Mr Abbott is just playing politics and assuming the Australian voter is exceedingly dumb.

Emissions Trading Schemes internalise negative externalities

Negative externalities are those outcomes of the 'free market' which are bad, however which are generally not taken into account in the price of the good or service being produced.  In the case of energy for example, coal is the cheapest form of fuel in a private sense (i.e. to dig out of the ground and to burn) however there is a social and environmental cost to this which does not get included in the price of coal.  However there is a very real cost to this which is borne by society in terms of environmental effects which need to be fixed / cleaned up by future governments and taxpayers.  This is what is known as an externality.

Note that externalities can be both positive and negative however they both face the same problem in a market economy - the benefits of positive externalities and the costs of negative ones are not included in the price of that product.

The solution to externalities is to try and internalise the cost or benefit in order to reflect the true cost of the product.  This often has to be done via regulation (especially in the case of negative externalities) as profit seeking enterprises are never going to voluntarily give up the lower private cost / higher social cost item.

An emissions trading scheme is a market mechanism to internalise the cost of carbon for those who pollute and it also offers 'credits' for those who do not pollute (e.g. for those who use or create renewable energy).  It is the right-wing, market method of accounting for a cost where the market fails.  A left wing measure would have been to put a tax on the product which

Shopping 101: Buying in bulk is not necessarily the best thing to do

I have posted before about how I moved out of home earlier in the year and doing all those things I had been avoiding doing for years like shopping and my own laundry.  Before you tell me that you moved out when you were 18 and have been doing it for years...that's the exact reason I didn't move out sooner (and I also enjoyed the limited rent I paid my parents compared to what I pay now).

I have been slowly learning the tricks of saving money while shopping.  There are certain days of the week that supermarkets are cheaper than others.  Hint: Monday nights for some reason are terrible for sales and discounts while Wednesdays always seem to have good bargains.  I also recently learned to avoid express convenience stores like the plague.

One thing I learned early on was the benefit of unit pricing.  In Australia shopping centres need to put unit pricing on the price labels so that you as a customer can easily compare which products are cheaper and which are more expensive.  Prior to this law being introduced companies would intentionally make their products odd weights, sizes and shapes so that customers could not compare prices as easily.

However there is a trap with unit pricing

If you are part of a large household that consumes food and other items like there is no tomorrow then you are unlikely to come up against this problem.  As a person living on their own or in a very small family unit:

Unit pricing may encourage you to buy larger quantities than you actually need which can actually COST you money

If you are sensible about your shopping and know what you want to buy and you are reasonably frugal so don't want to spend more than you have to...you will automatically we drawn to bulk type items which sell for significant discounts compared to their handy smaller counterparts.

There is nothing wrong with this approach and with stocking up if the product you are buying is not perishable.  However when it comes to food you may save 20% on the unit price if you buy in bulk...but if you only end up using half the product (which has

The free market is NOT perfect: "Knowing" Economics 101 is not enough

I have been thinking about this topic for a while actually and have spent the last week writing down my thoughts on it on various scraps of paper because I thought that I could make it into a series of posts which outline why I am not, nor have I ever been, a believer in the free market.

This may seem strange coming from an ex-investment banker, turned investment professional and also as a person who writes a blog tracking their wealth journey and sharing what my goals and aspirations are.  However I should state up front that government control is a sliding scale - an economy is NOT either free market capitalist or planned socialist.  There is no pure free market capitalist economy in the world just as there are very very few remaining planned socialist countries in the world.

Why did I start thinking about this?

I was motivated to think about this issue when I was watching some clips about the Tea Party movement in the US.  The whole movement struck me as fundamentally odd...the people protesting and joining these movements looked like those who most benefited from government programmes and assistance.  I also wondered about the economic policies and catch phrases that right wing politicians and free market advocates often throw out there which are so simplistic that they are effectively wrong.

And then it struck me...most of the general public has some appreciate of basic economics - they can see, think about and visualise simple economic concepts in a very real way around them.  However I do not believe that most of this same public has an innate understanding of the assumptions that underlie these 'simple' principals nor the consequences of what they are asking for when they demand a free market economy.

As I was thinking about how I would approach this series of posts though, one of my economist friends sent me a link to this article which explains how and why Econ 101 is killing America.  It is one of the best and most succinct articles I have ever seen.  It busts many of the myths that the general public has in their mind.  I highly recommend reading it.

Why does it matter?

It matters because as these movements start to gain steam and momentum, politicians and policy makers start to take notice.  There are some who would

90Million Blog's 2 year anniversary!

Earlier in the week I realised that this blog has been up and running for 2 years now which has amazed and surprised me.  This blog has morphed from one which I posted in occasionally and was really a way of holding myself to account for my financial performance to one where I try and comment on those things which I am constantly learning on my wealth journey.

I wanted to say a big thank you to all the readers, commentors and those who send me emails with suggestions, ideas and questions.  It has been great to communicate with others on their wealth journey!  The number of people visiting the site has grown exponentially and I hope that I am providing some value and perhaps a little bit of light entertainment and procrastination for my readers.

In the coming year I am hoping to:

• Get guest posters on this blog:  There are some topics which I am genuinely interested in but know very little about and I would love to get some guest posters who have much more experience than me in the financial world to share some of their advice
  
• Re-design the blog:  I honestly did not think about the

The share market has gone mad...when bad news is good news

The financial markets and the investment world generally has gone mad.   When bad news is good news in the stock market and I see headlines in the financial news saying that the stock market rallied on weaker than expected financial news or that it was weaker on better than expected news you know that the markets are not working in their proper way and that something out of the ordinary is happening.

Even if you do not follow the financial markets closely you cannot have failed to notice the stock market tanking over the last month.  Indeed most major stock markets have lost the strong gains they have made since the start of the year.  One of the major causes of this was an announcement by Ben Bernanke of the US Federal Reserve that the economy was recovering to such an extent that they would consider starting to roll back QE3.

A recap on QE3

When QE3 was first announced I posted about it, what it was and why the share market reacted so strongly to it.

In brief QE3 was the US Federal Reserve printing money and buying back US Treasuries and mortgage backed securities to provide liquidity in the market

This was to force down interest rates and force lending to start as the yields on these products were depressed to levels so that people would have to invest elsewhere.

QE3 was only ever going to be a short term measure! 

You cannot continue printing money into infinity in order to provide liquidity in the market.  It was only going to be a short term measure to get the economy kick started again and guess what?  It worked.  The US economy started to recover strongly with economic growth rebounding and the share market reflecting this

So why did the market react so negatively towards the announcement that it would be scaled back?

I personally think that much of it has to do with how short term investment managers and profit makers are these days.  In the short term you would expect the share market to pull back as yields recover

June 2013 Expenditure Tracker

As I mentioned in my June 2013 net worth post my personal expenditure was off the charts this month due to having to repay very high credit card bill and this impacted my ability to save and invest this month.  I am really struggling to keep my personal expenditure under control which I have discussed further below.

Item	June 2013	Target	Over/(Under)
Share Investments	+$6,094	+$2,000	+$4,904
Offset Acct.	-$3,926	+$3,500	-$7,426
Personal expenditure	+$5,815	+$2,200	+$3,615

The major movements in my 3 accounts are discussed below:

• Share investments
• This month I both bought some shares on market and transferred funds into my share trading account
• Unfortunately I moved far too early and the market continued to be weak right through the month
• The poor sharemarket performance, while creating opportunities to buy which have not been available of late caused me to have my first negative net worth performance since I started tracking in June 2011
• I also continued to contribute to my employee share plan
  
• Home Loan offset account
• As I will discuss in my personal expenditure section, I actually did not contribute as much as I would have liked to to this account because I did not have the cash to

Net Worth: 2013 Financial Performance Summary

Yesterday marked 2 years of me writing this blog and of tracking my net worth to my target of $90 million.  It has been an up and down year for me both in terms of my career, my personal life and the focus of this blog, my wealth journey.

When I wrote this same post last year to mark the one year anniversary of my blog I set my target for the 2013 financial year of $500,000 which was very ambitious at the time and I needed to start generating some new sources of income to get to this level.  I started thinking up business ideas and actually got fairly advanced in some however this never get off the ground for various reasons (including personal ones).  My performance for the last 12 months can be seen below:

Some of the changes that have occurred over the last 12 months include

• An increase in assets from $599,000 to $724,000 (+21.0%)
• An increase in liabilities from $355,000 to $356,000 (+0.4%)
• An increase in net worth from $244,000 to $368,000 (+51.1%)

In absolute terms this was actually a very similar performance to the 2012 financial year.  In that year my net worth increased $120,000 whilst this year it increased $124,000.  Compounding would normally have more of an effect however in the 2012 financial year I was still getting paid an investment banking salary and bonus which I did not get in the last year.

I have also included below a chart which shows my performance from when I started tracking my performance in June 2011.  In this time I have seen

June 2013 Net Worth: $368,000 (-0.8%)

	Value	% Change
Assets	$724,000	-0.6%
Liabilities	$356,000	-0.5%
Net worth	$368,000	-0.8%

This completes the second year of my net worth tracking series and I will post a year on year analysis as a summary of how I have been going since I started tracking my net worth shortly.  However as per usual this post will focus on how I performed for the month.

I am disappointed to say that, as you can see above, this is the first month in which I have recorded a negative net worth performance since I started tracking my performance 24 months ago.  This was primarily driven by an abysmal month on the share market combined with an inability to save a great deal as I had a rather big credit card bill to pay.

I have had bad months before on the share market and these have not caused me to have a negative overall performance for one major reason - previously my share portfolio was of a size that even if there was a terrible month, regular savings from my wage could outweigh this.  Unsurprisingly as my wealth has grown, the movements in the share market can outweigh any amounts that I can actually save from my monthly wage.  I knew this was going to happen at some point, so am not overly disappointed to see it.

This month was a confluence of negative factors affecting my net worth including

• A very bad month on the share market
• At one point close to the end of the month my portfolio was down 10%.  Luckily the performance picked up in the last few days and I ended the month with my portfolio down ~7% for the month
• This drove my entire result and outweighed my