Day of Reckoning – ROTH Competition Update

Once per quarter Mrs. Wizard and I check in on our ROTH accounts and compare them on three metrics:

  1. Total Account Value
  2. Total Quarterly Return
  3. 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 here at the mother ship.

After four consecutive quarters of Mrs. Wizard totally kicking my ass, I have finally rallied back. While she continues to beat me soundly on total account value because of the $1,650 handicap I mentioned above, I really rallied this quarter, and have surpassed her in total returns as well.

Looks like Mr. SPYder continues to beat us both in terms of our total returns, but we are nipping at his heels. Comparing our total returns to SPY is stupid, but I keep doing it for some reason.

Since I’ve selected quadruple witching as our quarterly day of reckoning, there is some weirdness about SPY’s share price, since that’s the day it goes ex-dividend. In the past, I looked at two scenarios: either before or after ex-dividend and including (or not) a dividend payment as cash (not reinvested) accordingly. Eventually I decided to just pick one way to calculate it. That way the weirdness should come out in the wash.

So this is how I calculate the SPY quarterly return: take the closing price the day before ex-dividend as the starting and ending point, then add the dollar amount of the dividend paid that quarter as cash to the value.

“Index”

Starting Price

Ending Price (09/14/17)

Dividends Paid

Quarterly Return

SPY 06/15/17

$242.59

$250.09

$1.183

+3.58%

Mr. Wizard

$15,974.40

$22,704.92*

Included in ending price

+7.70%

Mrs. Wizard

$18,846.56

$24,047.54

Included in ending price

-1.59%

*Percentage returns are normalized to exclude the annual contribution of $5,500 that was made on 08/16/17

Mr. and Mrs Wizard vs the S&P 500 – Quarterly Return 06/15/17 – 09/14/17

In order to compare ourselves to the SPY for total return, I’ve decided to use a total “internal rate of return”. In other words I calculate how many shares of SPY we would hypothetically own if we had bought one share of SPY (closing price) on the “investment dates” (days we funded our accounts), and then dividends were reinvested.

So since we started tracking all this, we would have hypothetically ended up with 4.11510411 shares of SPY by buying one share on 2/28/15, another on 8/17/15 another on 8/16/16 and finally a fourth on 8/16/17 (all at those days’ closing prices which were $210.66, $210.59, $217.96, and 246.94 respectively, for a total “investment” of $886.15).

Meanwhile we would have accumulated the additional 0.11510411 shares by reinvesting dividends along the way (this assumes we buy shares at the opening market price the day of the dividend distribution).

Those 4.11510411 shares were worth $249.19/share at Friday’s close (a total of $1,025.44). That represents a total gain of $139.29 or 15.72%

Look over to the right of the competition tracker published back at the mother ship for more details. I can’t promise that it’s easy to figure out, but I can promise that the math’s all there.

“Index”

Total Invested

Ending Value (including dividends)

Total Return

SPY Total IRR

$886.15

$1,025.44

+15.72%

Mr. Wizard

$20,350

$22,704.92

+11.57%

Mrs. Wizard

$22,000

$24,047.54

+9.31%

Mr. and Mrs. Wizard vs the S&P500 – Total Return as of 09/15/17

So we are definitely not “beating the market”. But we’re getting closer.

Thou can’t time the market, so thou shalt not try to.

2 thoughts on “Day of Reckoning – ROTH Competition Update

    1. Hehe…that is a very important question.

      Currently we have a pretty low bioload with only a couple plecostomus, mosquito fish and a snail.

      The current aquarium was started ~6 years ago and has been through a move from California to Colorado as well as a number of life cycles; it has housed black mollies, albino cories, zebra loaches, tetras, ghost/cherry shrimp, and even the occasional african dwarf frog.

      Life’s tough in the water…

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