Annual vs. Monthly IRA Contribution Experiment – August 2014 Update

The Annual vs. Monthly IRA Contribution Timing Experiment August 2014 Update.

Annual Contribution Roth IRA

Shares Price Total Cost Market Value $ Gain/Loss
312.50 19.14 5,500.00 5,981.25 481.25

Account Summary:

  • No account transactions to report.

Monthly Contribution Roth IRA

Shares Price Total Cost Market Value $ Gain/Loss
214.72 19.14 3,863.00 4,109.65 246.65

Account Summary:

  • 08/01/2014 – Contributed $409.00
  • 08/01/2014 – Purchased mutual fund (VTIVX)

Annual vs. Monthly IRA Account Comparison

Account % Monthly Return Total % Gain/Loss
Annual 3.07 8.75
Monthly 3.10 6.38

Analysis:

  • The S&P 500 rose to, and surpassed, the record 2000 mark. What does that mean to an index investor? Not much. If you’re getting the “feeling” that the market is going to take a tumble any time soon because it’s at a record high, it’s just the temptation to time the market. Stay calm, hold steady, and keep investing. As they say, stay true to the course.
  • The market rally in August pushed gains back up for both experimental accounts. The returns aren’t looking too shabby for only eight months of investing.

IRA Contribution Timing Experiment

Annual vs. Monthly IRA Contribution Experiment – July 2014 Update

The Annual vs. Monthly IRA Contribution Timing Experiment July 2014 Update.

Annual Contribution Roth IRA

Shares Price Total Cost Market Value $ Gain/Loss
312.50 18.57 5,500.00 5,803.13 303.13

Account Summary:

  • No account transactions to report.

Monthly Contribution Roth IRA

Shares Price Total Cost Market Value $ Gain/Loss
192.63 18.57 3,454.00 3,577.16 123.16

Account Summary:

  • 07/01/2014 – Contributed $409.00
  • 07/01/2014 – Purchased mutual fund (VTIVX)

Annual vs. Monthly IRA Account Comparison

Account % Monthly Return Total % Gain/Loss
Annual -1.69 5.51
Monthly -1.76 3.57

Analysis:

  • World events, announcements about ending stimulus efforts, and news of rising prices made it a choppy month for investors.
  • Both simulated accounts gave back gains from last month, but are still recording an overall gain for the year so far.
  • A falling stock market could signal that it might be better to employ dollar cost averaging.

IRA Contribution Timing Experiment

Annual vs. Monthly IRA Contribution Experiment – June 2014 Update

The Annual vs. Monthly IRA Contribution Timing Experiment June 2014 Update.

Annual Contribution Roth IRA

Shares Price Total Cost Market Value $ Gain/Loss
312.50 18.89 5,500.00 5,903.13 403.13

Account Summary:

  • No account transactions to report.

Monthly Contribution Roth IRA

Shares Price Total Cost Market Value $ Gain/Loss
171.12 18.89 3,045.00 3,232.39 187.39

Account Summary:

  • 06/01/2014 – Contributed $409.00
  • 06/02/2014 – Purchased mutual fund (VTIVX)

Annual vs. Monthly IRA Account Comparison

Account % Monthly Return Total % Gain/Loss
Annual 2.11 7.33
Monthly 2.09 6.15

Analysis:

  • The economy has been showing improvement since the winter season. Employment, housing, and other key economic figures were all up.
  • Interest rates for Treasuries have begun to creep upwards, while bonds have rallied – wiping away most losses from earlier in the year.
  • The bull market is still raging. The S&P and Dow indices seem to be ignoring any bad news, and continue to climb.
  • The Annual Contribution account is well over a percent higher than the Monthly account for the month of June.

IRA Contribution Timing Experiment

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