Fiscal Update – May 2012

The latest employment numbers just came out for May and it’s very neutral. Our unemployment rate remains unchanged from last month at 7.3%.  Taking a closer look at the numbers however we see that unemployment in BC actually jumped up from 6.2% to 7.4%.  Unfortunately if you are looking for work in Vancouver, it is statistically harder for you to find a job now than the month before.  But don’t give up. The next big opportunity could be right around the corner. Just have to keep looking. Plus at least we’re nowhere close to what Europe is going through right now.
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*Side Income:
  • Part-Time Work = $1400
  • Dividends = $200

*Discretionary Spending:

  • Eating Out = $100
  • Others = $200

*Net Worth: (MoM)

  • Assets:
  • Cash = $2,000 (-$1000)
  • Stocks = $68,400 (-$1,300)
  • RRSP = $20,700 (-$1,000)
  • Home  = $248,000
  • Liabilities:
  • Mortgage = $206,800 (-$400)
  • Margin Loan = $17,400 (-$1,300)
  • Bank Loans = $0 (-$400)

*Total Net Worth = $114,900 (-1.03%) 

My net worth hasn’t really moved much in the last 3 months. But the stock market index has dropped more than 10% since March. I think this might be the buying opportunity of the year. I already invested almost $6,000 so far in June. If the market continues to slide down I will buy another $10,000 of stocks. If it goes down even further, I’ll invest another $15,000. At some point in the future the market has to recover so the lower it dives the more I’ll invest. It sounds like a risky strategy but doesn’t it make sense from a long term investment point of view? Maybe not, I don’t know. Let’s see if Greece and Spain can sort themselves out first. Time to print some Euros and make money out of thin air.

* Numbers are rounded to the nearest $100.
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Not Working
Not Working
06/10/2012 3:46 am

Was really a bad month for stocks, not bad if you only lost 1.3K on 70k$

Liquid
Admin
06/10/2012 12:47 pm
Reply to  Not Working

Sell in May and go away they say. I think June won’t be as bad.

Jason
Jason
06/10/2012 7:24 am

Tough couple months. I know my net worth took a hit from the stock market and I had property appraised lower then what I bought it for.

what do you use to track net worth and expenses? I have been using iBank for the last couple months and it handles expenses really well but doesnt do investments very well (or maybe I dont have it set up right).

Love the blog keep up the good work.

Liquid
Admin
06/10/2012 12:59 pm
Reply to  Jason

Looks like the Bank of Canada is going to keep interest rates low for awhile longer, plus lots of people from other parts of Canada are moving to Alberta so your property value should climb up again some day. I use Google spreadsheets, which is just an online equivalent of Excel, and track my net worth and expenses on one page. I like how it gives me real time stock quotes and incorporates it into my calculations0. I’m not very familiar with iBank yet but it looks pretty cool too :0) I like how easy it syncs up with your other Apple devices.

Jeremy @ Modest Money
06/10/2012 10:00 am

Well I’m ashamed to admit that I affected those BC unemployment rates by claiming employment insurance last month. I’m doing my part to help it rebound by getting a job this month though.

It does sound like you’re making the smart move with your investing. It’s got me tempted to dump any extra cash into stocks instead of into a bit of money I owe on a 0% balance transfer.

Liquid
Admin
06/10/2012 1:02 pm

Yay, good going on getting work. Bonus that you can work from home.

Corky Swanson
06/10/2012 8:23 pm

I sold a big chunk in May and still have it out of the market. Looking to get back in at some point. The p/e ratios seem high on stocks, bond rates are a joke and I’m scared of inflation, gold is overpriced — sitting on cash seems to keep me sane for now.

Liquid
Admin
06/10/2012 8:50 pm
Reply to  Corky Swanson

Cash is king they say. Wish I had done the same in May. There seems to be lack of confidence in the financial markets right now.

Phil
Phil
06/11/2012 5:25 pm
Reply to  Liquid

Fear… I smell a buying opportunity. I have been using the same concept as you are executing buy buying when you think it is low and if it goes lower buying even more… Better to have the money working for me, as opposed to trying to market time. If the herd is scared, we should be close to a bottom, but as i said in an earlier post, I think we are in for a little more volatility a sideways movement before a true bottom is reached.

Liquid
Admin
06/12/2012 7:02 am
Reply to  Phil

Cool, we have the same approach. I hope you’re right about not reaching a bottom yet. If the TSX Composite flirts with the 10K mark again I have a large sum of cash ready to deploy. Then one day when it rises up to 11K, which is even lower than now, I would still make a nice 10% paper profit. I don’t think it’s possible in my life time to see the index reach 0. So every 1000 points it drops just means a higher chance it will eventually go back up in the future.