Monthly vs. Annual IRA Contribution Experiment – November 2013 Update

The Monthly vs. Annual lump-sum IRA contribution timing experiment November 2013 update.

Annual Contribution Roth IRA

Fund Shares Price Cost Basis Market Value Gain/Loss Gain/Loss %
VTSMX 203.61 45.70 6,960.79 9,304.98 2,344.19 33.68
VGTSX 188.71 16.69 2,707.67 3,149.57 441.90 16.32
VBMFX 104.58 10.66 1,152.51 1,114.84 -37.67 -3.27
Totals: 10,820.97 13,569.39 2,748.42 25.40

 

Account Summary :

  • 11/29/2013 – Reinvested $2.35 dividend for Vanguard Total Bond Market Index Fund

Monthly Contribution Roth IRA

Fund Shares Price Cost Basis Market Value Gain/Loss Gain/Loss %
VTSMX 181.24 45.70 6,629.32 8,282.68 1,653.36 24.94
VGTSX 174.19 16.69 2,566.09 2,907.20 341.11 13.29
VBMFX 98.13 10.66 1,076.43 1,046.04 -30.39 -2.82
Totals: 10,271.84 12,235.92 1,964.08 19.12

 

Account Summary :

  • 11/01/2013 – Contributed $458.33
  • 11/01/2013 – Purchased mutual funds
  • 11/29/2013 – Reinvested $2.21 dividend for Vanguard Total Bond Market Index Fund

Monthly vs. Annual IRA Account Comparison

Account Gain/Loss % % Change From Prior Month
Annual 25.40 1.96
Monthly 19.12 1.93

 

Analysis :

  • November continued to give a boost to stocks even though the outlook for retailers is on shaky ground. Analysts have predicted a weaker shopping season this year.
  • The experimental IRA accounts continue to do well. While the bull market rages, the Annual Contribution IRA rules over the Monthly with 6.28% lead.

Quicken Black Friday/Cyber Monday Sale

If you don’t already track your income and expenses, you need to get started now. I started using Quicken in 2003 and have been very happy with the way it has kept my finances organized throughout the years.

I use it to automatically keep track of paychecks (so I can project income), notify me of recurring bills and expenses, monitor investments and assets, and to stay accountable for what I spend. I know there are a lot of free financial tools online, but there really isn’t a better, more complete solution like Quicken. I can really attribute some of my financial success to Quicken because it helps me organize everything in one place – and organization is a huge part of financial planning.

If you have been following the Extreme Money Makeover Plan, I will be asking you to start tracking your finances manually at some point. Manually tracking your transactions will help ingrain a strong sense of responsibility for how much you’re bringing in as income and how much you’re spending on a day to day basis. It will also help you manage your debt (if you have any) and get you started on the road to retirement planning.

Quicken Black Friday/Cyber Monday 2013 Promo

There really isn’t a better time to buy Quicken than during the next four days as Intuit (the maker of Quicken and TurboTax) is offering 40% off Quicken Deluxe, or any higher version with free shipping. This offer is good starting Black Friday through the end of Cyber Monday (11/29/2013 12:00 am PST – 12/2/2013 11:59 pm PST). No coupon code needed!

I personally use Quicken, but I am also an affiliate. That means that if you click on the ad or the link and make a purchase, I receive a commission for referring you. It doesn’t add any extra cost to you and you’ll get the same Black Friday/Cyber Monday discount that everyone else gets. Thank you for your support.

Look forward to Quicken video tutorials that I’ll be debuting on YouTube in 2014.  My goal is to help you master the financial software a few minutes at a time.

Monthly vs. Annual IRA Contribution Experiment – October 2013 Update

The Monthly vs. Annual lump-sum IRA contribution timing experiment October 2013 update.

Annual Contribution Roth IRA

Fund Shares Price Cost Basis Market Value Gain/Loss Gain/Loss %
VTSMX 203.61 44.52 6,960.79 9,064.72 2,103.93 30.23
VGTSX 188.71 16.59 2,707.67 3,130.70 423.03 15.62
VBMFX 104.36 10.69 1,150.16 1,115.62 -34.54 -3.00
Totals: 10,818.62 13,311.04 2,492.42 23.04

 

Account Summary :

  • 10/31/2013 – Reinvested $2.38 dividend for Vanguard Total Bond Market Index Fund

Monthly Contribution Roth IRA

Fund Shares Price Cost Basis Market Value Gain/Loss Gain/Loss %
VTSMX 174.55 44.42 6,331.40 7,753.45 1,422.05 22.46
VGTSX 167.28 16.67 2,451.51 2,788.59 337.08 13.75
VBMFX 93.63 10.72 1,028.39 1,003.75 -24.64 -2.40
Totals: 9,811.30 11,545.79 1,734.49 17.68

 

Account Summary :

  • 10/01/2013 – Contributed $458.33
  • 10/01/2013 – Purchased mutual funds
  • 10/31/2013 – Reinvested $2.13 dividend for Vanguard Total Bond Market Index Fund

Monthly vs. Annual IRA Account Comparison

Account Gain/Loss % % Change From Prior Month
Annual 23.04 3.73
Monthly 17.68 3.69

 

Analysis :

  • The Federal Reserve is continuing with its bond purchasing program. That decision was rejoiced by investors.
  • Housing sales have weakened, and mortgage rates have fallen slightly with demand.
  • Corporate earnings have slowed, but stock earnings exploded in October. Indexes kept peaking at new highs, only to settle on the last trading day.
  • Tech IPO’s continue to rock the market. I can only say, don’t get involved in the hype. Let indexing work for you.
  • The Annual Contribution IRA has benefited from recent market performance, pushing its gain percentage ahead of the Monthly Contribution IRA. However, as evidenced by the Total Bond Market Index Fund, monthly purchases seem to help mitigate losses.
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