Monthly vs. Yearly IRA Contribution Experiment - June 2012 Update

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

Yearly Contribution Roth IRA

Fund	Shares	Price	Cost Basis	Market Value	Gain/Loss	Gain/Loss %
VTSMX	103.23	33.90	3,280.56	3,499.48	218.92	6.67
VGTSX	93.07	13.53	1,250.00	1,259.31	9.31	0.74
VBMFX	46.20	11.10	507.33	512.83	5.49	1.08
	Totals:		5,037.89	5,271.62	233.72	4.64

Account Summary :

06/22/2012 – Reinvested $16.23 dividend for Vanguard Total Stock Market Index Fund
06/29/2012 – Reinvested $1.11 dividend for Vanguard Total Bond Market Index Fund

Fund	Shares	Price	Cost Basis	Market Value	Gain/Loss	Gain/Loss %
VTSMX	48.73	33.90	1,636.08	1652.08	16.00	0.98
VGTSX	44.78	13.53	624.98	605.86	-19.12	-3.06
VBMFX	22.84	11.10	252.09	253.53	1.44	0.57
	Totals:		2,513.15	2,511.47	-1.68	-0.07

Account Summary :

06/01/2012 – Contributed $416.66
06/01/2012 – Purchased mutual funds
06/22/2012 – Reinvested $7.66 dividend for Vanguard Total Stock Market Index Fund
06/29/2012 – Reinvested $0.55 dividend for Vanguard Total Bond Market Index Fund

Account	Gain/Loss %	% Change From Prior Month
Yearly	4.64	+4.00
Monthly	-0.07	+4.39

Analysis :

The market gave up the year’s gains at the beginning of the month, only to rebound by the end of the month.
News broke that banks in Spain will be bailed out. They are set to receive up to 100 billion euros over the course of the next 18 months.
Manufacturing reports revealed that domestic production slowed, translating to fears that demand is decreasing. Combined with another disappointing jobs report, investors feared the economy was on the decline again.
Market lows at the beginning of June helped the Monthly IRA acquire shares at a lower price. This boosted performance to bring the account back to cost basis.