Quarter ends are typically joyous times in my household. My wife, with a look of disgust, shakes her head in disbelief as I take time and energy calculating out our net worth at the end of every quarter. As simple and thorough as can be, I find the total between our assets owned against debt outstanding. As of September 30th, 2011, our net worth stood at $223,509.49. Now if you would have told me, at the start of this 3rd quarter in 2011, that my net worth would have FELL in value at the end of the quarter by -$18,038.22, and that I would be as happy as a clam, I would have had serious doubts. But it’s so weird, even over the last few months I have just been in a completely different headspace when looking at my personal finances.
I feel like during this bear market, what I consider my “financial rock” has shifted away from the $60K plus in investments, and towards my six month emergency fund. As we take this ride down the bear market of 2011, my liquid emergency fund is a huge piece of what I take solace and security from (in a financial sense). Should I have a true emergency: medical, a family member passing away, etc. I can ride out the market cycle as long as I have my six month emergency fund intact.
Overall though I do feel like I’m in an amazing headspace. The books I have read (and reviewed) this quarter have really given me nuggets of information that I have been able to put into practice, and a lot of my personal relationships have improved, and I’m happy to note especially my marriage. Though not perfect and we are still working on understanding one another, I feel like we can talk to each other and understand one another a lot more efficiently than at any other time in our relationship. In the past few weeks I have spent a lot of time with some of my extended family and in-laws, and I’ve been reminded time and time again about what is most important to me: interpersonal relationships. I loved going to my dad’s 65th birthday and loved being able to share it with my in-laws. So with my emergency fund intact I can focus on the more important things in life, like family and letting my long term investments work through market cycles:
3rd Quarter 2011 Recap
The herd is moving in the direction echoed in my August 9th column “As the Market Turns,” (I hate being right J) and that is towards a very steep bear market. Equities are down. Housing is down. And unemployment numbers (though intrinsically flawed in calculation) are floating above 9%. Essentially a big chunk of the problem is that trading overall is reacting to news from government entities rather than the private industry. News of QEII and Operation Twist churned the market up, while fears from the EU and American debt ceilings lead to massive runs on equities. Announcements of mergers & acquisitions, earnings expectations and the like stayed away from our front pages (if it bleeds it leads right?? God I hate Comm. Majors). Until we reach a true bottom in housing and theLooking forward I am expecting good growth during the 4th quarter of this year. INCONCEIVABLE you may say?! How can I be so sure? You mean, besides the 80+ year track history of our stock market which has shown, since 1929, that October, November and December, that the DOW has historically returned average annualized returns of 2.31%? Hmmm, call it a hunch! I expect 3rd quarter earnings reports will be better than expected, thanks to lowered expectations. I also continue to believe in Black Friday, which follows Thanksgiving, as well as the Santa Claus rally to provide some positive padding to help end the year. The
KGB US Government can get a handle on letting us know how they are going to behave in the next year, our best and brightest companies are going to hold off on completing long term forecasting projections and are going to wait on hiring until the moochers in DC provide solid information for ongoing policy.