Once per quarter Mrs. Wizard and I check in on our ROTH accounts and compare them on three metrics:
- Total Account Value
- Total Quarterly Return
- Total Return
Whoever wins two out of three metrics wins the quarter. The loser has to clean the fish tank for the next three months. I started out $1,650 behind in total account value because I put that much in a traditional IRA in 2014, so I couldn’t fund the ROTH with the full $5,500 that year.
The scoresheet is published back at the mother ship.
Well Mrs. Wizard had quite an amazing quarter. I would attribute a lot of that to the rally in AAPL shares this last week. The share price has definitely benefited from the Samsung Galaxy 7 recall scandal. Still though, AAPL may be up 10% in the last week or whatever, but it’s just one holding. Her whole portfolio has done really well this quarter.
I take a little solace in the fact that I have (barely) edged her out in total return, but she pretty decidedly won the quarter in terms of taking 2 out of the 3 categories.
On a quarterly basis, Mrs. Wizard crushed the S&P500 too. I lagged by about 1.5%. Note that we funded the accounts with the 2016 contribution on 08/16/16, so it looks like the account values are up by A LOT, which they are, but the percentage return excludes contributions of $5,500 each.
Mr. and Mrs Wizard vs the S&P 500 – Quarterly Return 06/16/16 – 09/16/16
In terms of total return, there are now three different hypothetical index investments we can compare ourselves to. We funded the accounts on 2/28/15, 8/17/15, and 8/16/16. Our total return beats the most recent contribution date, but I’d say Mr. Market is beating us pretty handily in the longer term.
Mr. and Mrs. Wizard vs the S&P500 – Total Return as of 6/17/16
I think I’m going to start looking at total returns differently going forward. Comparing our single total return value to three different start dates is kind of silly.
I’ll change it next time, but I don’t feel like doing it at this point.
So there you go. We’re not really beating the S&P500 in our Roth IRAs, but then we are depending on how you look at it.
Benchmarking is stupid.