My Quarter End: Q4 2012

Now that was a fun quarter! Greetings everyone and Happy New Year!  I have been happily looking forward to 2013 and finally it is here. For those on the edge of your seats, at the end of Q4 2012 my total net worth stood at $288,124.84.  Now you might be asking yourself, why in the world is he so stoked about a 2000 loss in net worth from Q3? The answer of course lies in the details. The bulk of the quarter over quarter loss came from a 9% decrease in appraised value of a property I jointly own in California. But when it came to my all star team of mutual funds spread across our brokerage and retirement accounts, we had growth of 10% over the past quarter.

Even with the overall economy sliding back into recession and down market week to close 2012, our mutual funds, as a group, earned 10% over the last 3 months.  I feel like a proud papa watching his kid dominate on the sports field.

But of course the ebb to that flow was my gross miscalculation of how the market would react to the fiscal cliff. Technically our government went over the cliff and entered 2012 with automatic cuts and tax increases.  In pure reaction, the idiots in the Senate passed a 170 some odd page fiscal cliff deal at 2 am EST.  Now, you tell me if you can do anything with efficiency at 2 am, especially if you are an elected official drunk on spending. The deal raises taxes on those earning over 400K annually, raises taxes on EVERYONE by allowing the social security tax break to expire and did nothing to curb the impending debt ceiling.

So in preparation of our government’s unique ability to negotiate like 5- year olds, we set aside about $5,000 in cash to buy more shares of our favorite mutual funds after year-end when the market sank further.  As the market began to dip at year end we did buy $500 worth of one of our mutual funds, leaving me with $4500 ready to buy at great prices.  The cliff came and went, an awful deal was passed, and with it came the only thing the market asks for: certainty.  And these first few trading days of the new year have been phenomenal and making me wish I bought more in the last week of 2012.

I am hopeful that upcoming earnings reports will be lackluster from a modest Christmas season and that the unresolved debt ceiling will contribute to a significant market drop later this month.  But if a drop doesn’t come to fruition we will carry on our merry way and use our built up cash to make mutual fund purchases over a series of months.  And our principles remain the same: buy a diverse group of historically proven mutual funds and hold for at least five years.

On the personal side I feel 2012 was a great one for us and 2013 amazingly is looking just the same, if not more promising.  We are planning to do more of what Dave Ramsey says are the 3 things you do with money: invest, give and have fun. We are continuing to save and invest.  We will be getting back to giving away to charitable organizations a tithe of our net income. And we plan to have fun by traveling to Charleston- South Carolina, Nashville- Tennessee, take a big trip to Europe and make several trips to California to visit my family.  

Yes 2013 is finally here and I for one am waiting in excited anticipation to embrace and really enjoy this New Year.