The Annual vs. Monthly IRA Contribution Timing Experiment December 2014 Update.
Annual Contribution Roth IRA
| Shares | Price | Total Cost | Market Value | $ Gain/Loss |
|---|---|---|---|---|
| 318.89 | 18.65 | 5,620.63 | 5,947.35 | 326.72 |
Account Summary:
- 12/29/2014 – Reinvested Dividend of $119.69
- 12/29/2014 – Reinvested Short Term Capital Gain Distribution of $0.94
Monthly Contribution Roth IRA
| Shares | Price | Total Cost | Market Value | $ Gain/Loss |
|---|---|---|---|---|
| 307.61 | 18.65 | 5,616.35 | 5,736.87 | 120.52 |
Account Summary:
- 12/01/2014 – Contributed $410.00
- 12/01/2014 – Purchased mutual fund (VTIVX)
- 12/29/2014 – Reinvested Dividend of $115.45
- 12/29/2014 – Reinvested Short Term Capital Gain Distribution of $0.90
Annual vs. Monthly IRA Account Comparison
| Account | % Monthly Return | Total % Gain/Loss |
|---|---|---|
| Annual | -0.98 | 5.81 |
| Monthly | -0.93 | 2.15 |
Analysis:
- Oil production, specifically the over-production of it in North America, is having a large impact on the economy right now. Prices are down to 2008-2009 levels, and the commodity is taking the stock market down along with it.
- Vanguard issued annual distributions for its Target Retirement Funds at the end of December. Because the Annual Contribution account owned a few more shares than the Monthly Contribution account, it received a slightly larger dividend and short-term capital gain distribution – garnering a greater number of shares at reinvestment.
- The downward market movement in December severely impacted returns for the year. Still, the current experiment has only been running for 12 months, so we are looking at very short-term returns/impact here. Results should have more meaning at the end of next year.
Talk to me, Goose.