Comments on: Investment Club Portfolio and Returns

By: Peter

Peter — Sun, 22 Jan 2012 19:28:35 +0000

Thanks for the info.

The reporting of gains or losses on the individuals’ tax returns is still unclear to me.

Since the primary business activity is investment, is it reported as earned income? Or, is it simply reported as capital gains, dividends, etc.?

By: Listed in Carnival of Money Stories #53

Listed in Carnival of Money Stories #53 — Wed, 02 Apr 2008 20:17:58 +0000

[...] is an interesting post in the Carnival by Madison from My Dollar Plan on Investment Club Portfolio and Returns. The interesting thing is that they lagged the Vanguard total market index for 4 years prior to [...]

By: Madison

Madison — Tue, 01 Apr 2008 01:53:01 +0000

@MITBeta and DGI: I'm actually a huge fan of of the total market approach. Here's what the rest of our portfolio looks like: My Asset Allocation: Total Market Approach. I think you'll both feel better when you see it.

By: Flavors of the Week - Final Four Edition

Flavors of the Week - Final Four Edition — Mon, 31 Mar 2008 20:02:16 +0000

[...] Investment Club Portfolio and Returns – The performance of this investment club reinforces the fact that the average person should buy low cost ETF’s and make passive investments. Madison does it for fun and educational purposes, as it only makes up 2% of her investable assets, that makes sense too. [...]

By: Dividend growth investor

Dividend growth investor — Mon, 31 Mar 2008 14:55:22 +0000

A long time ago several friends of mine and I decided to start an investment club. We never implemented our project though, because everyone of us had a different strategy and noone was willing to submit to a different strategy. Thus I admire the accomplishment of getting different individuals to have a similar goal.
On the other hand though I don’t think that an investment club is a rational way to invest. If you ever check statistics for investor performance you will find out that it actually pays to go against the majority as opposed to go with the majority. Unfortunately your results so far confirm this statement.
On the other hand though I think that educating people on financial matters is truly priceless, so as long as you don’t invest more than 1-2 % of your net worth in this club, you should be ok.

By: Opportunity Costs of High Fuel Prices - Personal Finance Review » Money Smart Life

Mon, 31 Mar 2008 12:44:06 +0000

[...] Dollar Plan offers some insight into her investing club and Five Cent Nickel has some coverage of Middle Class [...]

By: Don't Feed the Alligators

Don't Feed the Alligators — Sat, 29 Mar 2008 11:49:22 +0000

Roundup 3-38-2008…

I’ve done a lot of blog reading this week and I’d like to point out some of the other articles that have caught my attention:

Madison at My Dollar Plan is giving away a $50 Smarty Pig card. I always enjoy a chance at free money.
Nickel at…

By: MITBeta @ Don't Feed The Alligators

MITBeta @ Don't Feed The Alligators — Fri, 28 Mar 2008 23:50:57 +0000

The best and most reliable investment a low-ball investor can make is in a total stock market index fund. T. Rowe Price will let you buy into one for as little as $50 if you commit to continuing to put $50 in a month. It will take many people A LONG time to save enough to buy even one share of BRK. B.

With that said, I’m saving to buy one share.

I’m so glad to hear that this investment is a very small part of your portfolio. I recently started a personal finance discussion group and have thoughts of someday turning it into an investment group to invest some money AFTER retirement savings, etc. are properly funded and allocated. Good luck!

By: GL

GL — Thu, 27 Mar 2008 12:51:04 +0000

Oh, OK – I was worried that it was your main investment.

And great minds think alike – in my opinion, BRK.B is the best and most reliable investment a low-ball investor can make. It’s at a relatively low price right now (~$4,200 – down from $4,900) and might go even lower, since quite a few of Berkshire’s assets lie with insurance companies. In other words, now is the perfect time to buy.

By: Madison

Madison — Thu, 27 Mar 2008 11:09:09 +0000

@ Four Pillars and GL: You hit the nail on the head! This is a perfect example why trying to beat index funds doesn’t happen.

We have spent many hours on the club, however, there are some benefits that you don’t see. One is the large portion of our meeting that is devoted to eduction. We spend a lot of time learning about saving, investing and personal finance in general that can be applied to our other investments.

For very good reason, the investment club is less than 2% of our entire portfolio. I consider it somewhat of my “fun money”.

I completely agree that passive investing is the way to go. I’ll look up the exact percentages since you can’t really tell from the graph and post them. I’ll also look at VTI.

GL, funny you should mention the BRK.B shares. I’ve had that on my list to evaluate forever!

I’m thinking maybe another article to follow this up with some of these points would be in order. Thanks for holding me accountable!

By: GL

GL — Thu, 27 Mar 2008 08:15:07 +0000

As much as I hate to say this, I agree with the first poster. You didn’t post the exact percentage per year, so I had to guesstimate it based on the chart, and it appears as if your club brought you a 35% return on the initial investment over the course of 5 years, or an average of 7% per year, which is pretty much the same you’d get if you kept reinvesting with 4-week T-bonds at the current interest rate…

While I truly admire your initiative, I cannot begin to imagine how much time and resources you and your fellow investors spent on your enterprise. Why not entrust your money to somebody who has been investing for decades – somebody with a history of success? I’ll have to admit that I’m trying to shamelessly advocate Warren Buffett and his Berkshire Hathaway, but his record is perfect, and the BRK.B more than doubled in value over the past 5 years… All one needs to do is buy a share or two, sit back and relax.

By: Ron@TheWisdomJournal

Ron@TheWisdomJournal — Wed, 26 Mar 2008 14:27:33 +0000

I’m going to have to look into starting one of these clubs. Thanks for sharing the information.

By: Four Pillars

Four Pillars — Wed, 26 Mar 2008 13:24:45 +0000

Thanks for answering the comment!!

I hate to say it but your chart is a really good argument for passive investment. Hopefully 2007 is the start of a good run for you guys.

Do have the average annual performance numbers compared to VTI?