Monthly vs. Yearly IRA Contribution Experiment - September 2012 Update

The Monthly vs. Yearly IRA contribution timing experiment September 2012 update.

Yearly Contribution Roth IRA

Fund	Shares	Price	Cost Basis	Market Value	Gain/Loss	Gain/Loss %
VTSMX	103.70	35.84	3,297.80	3,716.75	418.95	12.70
VGTSX	94.62	14.23	1,272.34	1,346.38	74.04	5.82
VBMFX	46.49	11.20	510.53	520.66	10.13	1.98
	Totals:		5,080.67	5,583.79	503.12	9.90

Account Summary :

09/21/2012 – Reinvested $17.24 dividend for Vanguard Total Stock Market Index Fund
09/21/2012 – Reinvested $22.34 dividend for Vanguard International Stock Index Fund
09/28/2012 – Reinvested $1.02 dividend for Vanguard Total Bond Market Index Fund

Fund	Shares	Price	Cost Basis	Market Value	Gain/Loss	Gain/Loss %
VTSMX	76.41	35.84	2,502.94	2,738.69	235.75	9.42
VGTSX	68.74	14.23	953.70	978.14	24.44	2.56
VBMFX	30.48	11.20	337.43	341.39	3.96	1.17
	Totals:		3,794.07	4,058.33	264.26	6.97

Account Summary :

09/01/2012 – Contributed $416.66
09/01/2012 – Purchased mutual funds
09/21/2012 – Reinvested $12.70 dividend for Vanguard Total Stock Market Index Fund
09/21/2012 – Reinvested $16.23 dividend for Vanguard International Stock Index Fund
09/28/2012 – Reinvested $0.67 dividend for Vanguard Total Bond Market Index Fund

Account	Gain/Loss %	% Change From Prior Month
Yearly	9.90	+2.59
Monthly	6.97	+4.98

Analysis :

Vanguard is changing the benchmark index for 22 of their funds. 2 of the funds used for the IRA experiment are affected.
- VTSMX changes from MSCI US Broad Market Index to CRSP US Total Market Index.
- VGTSX changes from MSCI ACWI ex USA IMI Index to FTSE Global All Cap ex US Index.
The Fed initiated a plan to buy mortgaged backed securities in order to boost the economy. Growth is slowing worldwide and job growth was not as strong as expected.
Both IRAs are in positive territory for the year. The Yearly IRA is nearly 3 percentage points ahead of the Monthly – a benefit of buying low at the beginning of the year.