Earlier this year, I added my investment portfolio to the group of reports I publish on Consumerism Commentary on a regular basis. Every three months, I share my investment balances and performances. I include Quicken’s calculation of the year-to-date average annual rate of return for an idea of how each investment is performing this year.
I add to my investments periodically, depending on the investment type.
I invest in my 401(k) every two weeks when I receive a paycheck. Out of the investments listed below, I only add to four investments, in equal amount: Large Cap Value, International Equity, Large Cap Growth, and Commercial Real Estate. My employer matches up to 4% of my salary. Half of the match is invested in company stock and half is invested to match my allocation rules.
At the beginning of each month, I invest $1,000 in the Vanguard Total Stock Market Index Fund (VTSMX) at Vanguard. This automatic investment usually receives the fund price on the last day of the month, but the funds are not deducted from my linked bank account until the first day of the following month.
Those are my only automatic investments. I also invest in an IRA once a year after completing my tax return.
Here are my investment account balances and performance numbers as of September 30.
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Hang on for a tough October!
The negative 34.6% return for your real estate fund does not appear to be correct as the ending number is the highest number on the chart.
David: The Real Estate Fund is one that I am investing in throughout the year. So the increase in the overall value is mainly due to my investments into the fund. In other words, I kept adding more as the investment value continued to fall. So even though the *total* value of the account has increased, the price of a share has decreased.
The average annual rate of return is an internal formula that takes the cash flow into account. On January the price of one share was around $10, on October 2, the price was about $7 per share. I kept buying throughout the year as the price decreased, so my shares from the beginning of the year have performed worse as of 3Q than the more recent purchases. The AARR formula takes that into account.
Flexo,
Thanks for taking the time to reply! in detail!
Like it me, it looks you continued to invest into the stock market crash. Sure paid off.
I have noticed some problems with Quicken’s calculation of return. For example, it considers new investments during the calculation period as gain. Did you notice the same thing or am I doing something wrong? I completely ignore the return calculations in Quicken because of this problem.
I don’t think I’ve come across major problems with the calculation but I’ll run a test with a simple IRR when I get a chance.