2012 Investment Performance Review

I have found in recent years that I always think my investing prowess is improving but then discover while looking at my annual performance it is only mediocre. This year again appears to be average. On the surface we had a great year; no complaints as we earned a 15.86% annual return on our tracked investments and a reported 16.4%** return in my 401(k) .

Here is a summary of our recent portfolio performance:


*Average return is calculated via geometric mean. Annual returns were calculated via Modified Dietz Method.
**I don't know how this 401k rate of return was calculated, but indicates its a time weighted formula so likely more accurate than my own calculations.

This continues to reinforce my previous portfolio analysis that I should be concentrating our investments in passive index funds as I am not yet demonstrating that my actively managed investments can beat our passive index benchmark.

On the positive side we are competitive. I take comfort in knowing that we aren't performing terribly compared to our benchmark and as long as our actively managed portfolio can keep pace with our index benchmark then we get the benefit of investing experience without costing us our financial freedom goals. As I've stated before I see improving my ability to invest at above average rates of return an important part of our reaching and maintaining our financial freedom goal.


Related in Stocks:

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Investment Performance January 2014 (-2.94%) (Feb 23, 2014) January 2014 Investment Report: January Highlights: January was a bad way to start out the year, but our portfolio performed slightly better thank our benchmark (-2.94% vs -3.17%). We made our regular monthly investments in our Roth IRAs, and some...

Investment Performance December 2013 (+2.20%) (Jan 10, 2014) December 2013 Investment Report: December Highlights: December was another subpar for us as our portfolio performed poorly compared to our benchmark (+2.20% vs +2.58%). We made our regular monthly investments in our Roth IRAs, and some dividends & dividend reinvestments....

Comments (2)


how does your calculation differ from vanguards?

http://performance.morningstar.com/funds/etf/total-returns.action?t=VTI

Tom, Good question - I don't know the computational differences, but I got my return calculations on VTI from the Vanguard website.

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A personal finance weblog of my journey to reach my goal of $2 million + the value of my primary residence.
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