Friday, August 24, 2007

My Funds and the Current Turmoil

When I started buying mutual funds, I really didn't know much about stock market. But from the very beginning I decided that I wanted to invest for a long time, so I naturally chose "buy and hold" strategy. I promised myself that I would not sell my funds in the near future, even if there was a big correction.

During these months I saw that Russian stock market mostly reacted to local news. It also correlated with the price of oil a little, and, to a lesser extent, it was sensitive to the other emerging markets' performance. There were ups and downs, but the whole financial outlook was rather positive. This August our market suddenly became aware of other countries' markets. It tumbled down because European indices took a dip, then it closely followed the DJIA performance, after that Asian indices plummeted, so our market took a huge dip, too, and then turned back to the US. It doesn't care at all about the local data. Our market and my funds are just following the rest of the world.

Of course, I don't know what will happen next. I can't predict the consequences of the mortgage crisis, and I also can't say how it will influence the economy of my country. I still stick to my funds. When Russian indices were 10% lower than their recent historic high, I bought some more. We'll see how it will turn out.

Saturday, August 18, 2007

Identity Issues, part 1: Passport

In Russia, there is no analogue for the US Social Security Number. We do have Individual Taxpayer Identification Number, which is given when a person pays taxes for the first time. Many people, however, don't know their ITIN, because most often they don't need to. Driver licenses can be used as ID only in limited cases. So, the most important document here is a passport. I use mine in every formal procedure – when I buy mutual funds in my bank, buy train or plain tickets or get a package in a post office. I'm used to carry it around, because even when I pay with a card in a store, I'm sometimes asked to show my passport for verification.

What drives me mad is the necessity to get a new passport at some stage of life. It seems that the only reason for this is updating the picture, but a new passport also gets a new number. A person must get a new document when he or she turns 20 (my case) or 45, within a month after the birth date, at his or her permanent address (Hometown for me). Luckily, my birthday is in the middle of summer, and I could easily spend several weeks in Hometown while my new passport was being issued. So, after a couple of weeks of waiting, I got my second ever passport, with a new picture and a new number.

A month ago I bought a plane ticket to Moscow. It was rather cheap because of the special offer at the time. The problem was I bought it before my 20th birthday, using the old passport data. An airlines representative claimed the ticket invalid and suggested I should sell the ticket back (getting only 30% of its price) and buy another using the new passport data (the special offer expired). Isn't that ridiculous? After a bit of fighting they eventually agreed just to change the data in the ticket. When I'm in Moscow, I'll probably have to go to my bank and ask them to change my info in their database. And then there is my asset management company, which also uses passport number and such for identification.

Honestly, I would rather just glue a new picture over the old one. I'm so glad that my birth certificate and ITIN need not be changed. It feels so odd, being the same unique person, but having to prove who I am just because some number in some document has changed.

Saturday, August 4, 2007

A Birthday Present

In my life I've gotten a wide range of birthday presents. Sometimes it was a book, sometimes clothes, sometimes just cash. What all these presents have in common is although they are very nice, they are depreciating. I've read some stories on pf blogs, in which someone's children were given bonds or other assets. Such stories amused me, because I never knew anyone who gave their children appreciating presents.

This time my parents surprised me. They gave me €1,500 (about $2,000) put in a savings account. I think Russian high-yield savings accounts are somewhat similar to US certificates of deposit, because one can't take the money before a certain day. If one cashes it out early, he or she gets no interest. On the other hand, some accounts (like mine) allow depositing extra money. The terms are great, mine is a 2-year account with 7% non-taxed APY. As it was opened half a year ago, it matures in a year and a half, when I'll be graduating.

I would gladly add this money to my accounts, and then my net worth would boost to an amazing amount of $5,000! But the account is in my mother's name, because it was supposed to be a secret, so technically it isn't mine. I can't even check the account balance. So I probably wait a year and a half when this money will be legally mine. It will be a great graduation gift.

Thursday, August 2, 2007

Jule Net Worth

This Jule I have nothing to brag about. My net worth almost didn't change. It's not surprising, as I didn't contribute anything to my savings, and my stocks, after a period of high volatility, have reached the level of the end of June. This is my first flat month since I've started investing and tracking my net worth, but I'm not upset very much. I knew my summer's finances would be boring.

Also this month I was very much absorbed by my offline life, but now I'm going to drag myself back to the blogging world.