January 2008 Net Worth Update: -3.7%
Our portfolio declined by 3.7% for the month of January. The total percent increase since the beginning of our dollar plan is 1010.9%.
Factors
Since the total market was down in January, so is our portfolio as we use a total market approach to investing. As always, 2 plans in our portfolio have not reported results yet. I have updated those accounts for December 2007, which dropped the year end results for 2007 to 18.8%.
I received a match in my 401k plan in January, although it was very small due to poor 2007 performance at my company and a lower amount to match on because I have been on leave since last fall.
Finally, we have made very few contributions to our accounts in January. Those should pick up in February once I return to work and we begin some of our investment snowflaking.
January Performance Highlights
Stocks
- Best: Home Depot 10.28%
- Worst: Harley Davidson -15.05%
Mutual Funds
- Best: Vanguard Reit Index 0.64%
- Worst: Vanguard Emerging Markets Index -10.72%
Action Plan
It’s still very early in the year to worry about any declines in our portfolio. However, I’m working on our 2008 financial goals (which you’ll see later this week) and I will be including at least one initiative to contribute some additional funds to our investments.
Previous Net Worth Updates:
Check out how others did in January:
- Single Guy Money
- Blogging Away Debt
- The Simple Dollar
- Million Dollar Journey
- Moolanomy
- The Honest Dollar
Thanks for the mention. My retirement portfolios were also hit hard but the only thing that kept me ahead was my savings and that a large portion of my non-retirement portfolio is cash.
-3.7% is not bad. I took a bigger hit than that. But then again, there are so many factors involved we are not comparing apple to apple.
This is great stuff, Madison.
A 1000% over 5 years is out of this world performance by any standards.
I think a bow is in order.
Well done and all the best for the rest of 2008 and your Dollar Plan time frame.
I’m curious – how are you calculating total return? It shouldn’t include your contributions to the portfolio, or it overstates positive returns and understates losses. If you do adjust for contributions and use a time-weighted return, then 1000%+ is indeed impressive. Even if you don’t and the number you’re showing includes your contributions, good job on building your wealth!
@Pinyo: Yeah, the whole net worth dilemma. I do not include any assets like our house, cars, etc. Not because I don’t believe they are part of net worth, but because my goals involve money that I can spend without selling my house and cars. Essentially what I track is our portfolio of money earmarked for retirement and to support financial independence.
@Lily: Good catch! Yes, it is really just total percent increase and not total return. I would love to show the actual numbers, because it makes more sense, but based on my readership of family and friends I converted it all to percentages. The total percentage increase is the easiest way to illustrate what I’m trying to show, and that is our path to our goal of a certain dollar amount.
You are correct that for total return I would need to exclude the contributions. I give a little better explanation in the first update (October 2007) of why I did it that way. I will tell you that in the beginning contributions were significant. Now, we don’t contribute as much and the monthly returns are very close to the actual returns of the portfolio.
I’m usually pretty careful not to call it total return, but I see I slipped… I’ll get that fixed!
If you have any ideas for a better way to illustrate the change, I’m all ears!
Yeah, that is pretty impressive, but you are not a stockbroker anyway. I get it — that you have 10x more than you started with. But this month, I will double my money with my second contribution. I am trying for 10%, so my money only has to earn about $5k this year. Lazy money!
Madison, I totally get what you were trying to show. I was just curious for my own purposes because I want to drink your Kool-Aid if you really had 1000% annual returns! 🙂 I think your illustration is fine – I was just a little thrown when you mentioned “total return.” The only alternative I can really think of is if you put everything into dollars, starting with a hypothetical $10,000 (or whatever value) portfolio.
I just started showing my net worth progress this month. I plan to keep using the bar graph. I don’t have problems with people knowing the actual dollar value of my net worth, but I can understand if you don’t want to put a number on your portfolio – there are many reasons why it’s a bad idea (especially if you have friends and family viewing the site and this might make things uncomfortable).
Anyway, thanks for the clarification. You’re still doing great. Keep it up!
Amazing growth. You really follow the “invest in what you know” motto!
3.7% down compared to others is pretty good, although I assume it doesn’t feel that way. All the best!
OK, maybe it is time for that hedging stratagy talk that we were avoiding.