Tracking Tool For Our Investment Performance
Ok I have finally put together what I think is a pretty decent snapshot of our investments. Still some work to be done, but it’s a vast improvement in transparency over anything I have published before.
I have been tracking it for a little over a month and its working pretty good so I am going to start publishing monthly along with our net worth and tweak it along the way.
MS Money sucks at tracking investment performance (IMO). Yes it can tell you your starting value and ending value and a whole bunch of stuff in between that is worthless. However especially with dividend reinvestments in the mix I wasn't able to get the picture I want to see.
What Do I Want To See?
1) I need a simple way to benchmark my performance against market indexes. Yes my investments sometimes perform well, sometimes poorly, but I need to start establishing a track record. If I am not consistently beating the market indexes then I need to think about concentrating more assets into market index investments.
2) I want to see the monthly return on each investment and in aggregate in a consistent manner.
3) I want to be able to compare my original cost basis (not including the cost basis via reinvested dividends) to the current value to see my overall gains or loss for the investment.
4) I would like to know in dollars how much I have gained or lost at the end of the month after you factor in dividends, new investments, etc.
Creating and Maintaining My Investment Snapshot Report
I created an Excel spreadsheet and used a web query to pull stock prices off web pages.
1)With one click I can update stock prices on the report.
2)I need to track dividends and dividend reinvestments and update them on the spreadsheet
3)I need to track additional investments and sales and update them on the spreadsheet
Still time consuming, but it gives me what I want. I think when time is tight I won't be able to keep up with all the transactions and will just have to roll them over to whatever month I have time to plug them in. My goal to make this manageable for me is to consolidate my investment accounts as much as possible. We have 15+ accounts at Vanguard, T Rowe Price, Sharebuilder, ESPP, and a number of individual DRIP accounts. I would like to get this number to less than 10 accounts by the end of the year.
The Downside to This Investment Snapshot Report
It’s so easy to open in the morning, click to update the stock prices and see to the penny how much we gained or lost over the past day. It is almost addictive and why I have resisted doing this in the past.
However, at this point I think the pros out weigh the negatives at least in the short term. I need to start measuring our performance and compare it to the market. I suspect our investments have trailed the market overall, but haven't found a consistent way to measure our progress especially with all the transactions that occur each month.
Benchmarking Against the Market Indexes
Right now I only have the Vanguard Total Stock Market Index on the report as a benchmark. I know this isn't consistent with my asset allocation -- this is something I will try to address over time.
Here is a preview of the investment snapshot. Ill give the breakdown of our monthly investments in a later update:
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