The Monthly vs. Annual lump-sum IRA contribution timing experiment September 2013 update.
Annual Contribution Roth IRA
| Fund | Shares | Price | Cost Basis | Market Value | Gain/Loss | Gain/Loss % |
|---|---|---|---|---|---|---|
| VTSMX | 203.61 | 42.62 | 6,960.79 | 8,677.86 | 1,717.07 | 24.67 |
| VGTSX | 188.71 | 16.12 | 2,707.67 | 3,042.00 | 334.33 | 12.35 |
| VBMFX | 104.14 | 10.66 | 1,147.78 | 1,110.13 | -37.65 | -3.28 |
| Totals: | 10,816.24 | 12,829.99 | 2,013.75 | 18.62 |
Account Summary :
- 09/20/2013 – Reinvested $39.73 dividend for Vanguard Total Stock Market Index Fund
- 09/20/2013 – Reinvested $13.15 dividend for Vanguard Total International Stock Market Index
- 09/30/2013 – Reinvested $2.25 dividend for Vanguard Total Bond Market Index Fund
Monthly Contribution Roth IRA
| Fund | Shares | Price | Cost Basis | Market Value | Gain/Loss | Gain/Loss % |
|---|---|---|---|---|---|---|
| VTSMX | 167.62 | 42.62 | 6,033.48 | 7,144.05 | 1,110.57 | 18.41 |
| VGTSX | 160.21 | 16.12 | 2,336.93 | 2,582.63 | 245.70 | 10.51 |
| VBMFX | 89.13 | 10.66 | 980.43 | 950.13 | -30.30 | -3.09 |
| Totals: | 9,350.84 | 10,676.81 | 1,325.97 | 14.18 |
Account Summary :
- 09/01/2013 – Contributed $458.33
- 09/02/2013 – Purchased mutual funds
- 09/20/2013 – Reinvested $32.71 dividend for Vanguard Total Stock Market Index Fund
- 09/20/2013 – Reinvested $11.17 dividend for Vanguard Total International Stock Market Index
- 09/30/2013 – Reinvested $1.93 dividend for Vanguard Total Bond Market Index Fund
Monthly vs. Annual IRA Account Comparison
| Account | Gain/Loss % | % Change From Prior Month |
|---|---|---|
| Annual | 18.62 | 4.24 |
| Monthly | 14.18 | 4.25 |
Analysis :
- The Annual IRA account is starting to reflect a fairly large advantage from the Monthly IRA account. I’m not sure if it’s because of a temporary deviation, or if the gap will widen as time increases. I’m sure that the recent market shifts could have something to do with the gain/loss change, and returns could possibly smooth out over a longer period of time.
- Vanguard issued quarterly dividends. One clear advantage of lump-sum purchasing is being able to reap a larger dividend amount, thus being able to reinvest more cash.
- The Federal Reserve decided to continue stimulus efforts through their bond-buying program. They are spending $85 billion each month until the economy progresses.
- Rising mortgage rates are putting some strain on the housing market. Home prices are still climbing, but sales seem to be slowing down.
Talk to me, Goose.