Return Comparisons

In my previous, I posted my annual returns since the start of 2007, but I didn't post how it compared to the markets in general. I use two S&P indexes as benchmarks for myself. They are the S&P 500 and the S&P Global 1200. I picked these because the S&P 500 is a fairly good indicator of the U.S. markets in general. I picked the Global 1200 because, well, it's really a global context working in and I felt it makes sense to compare myself to the world in general. Note: I compare to both indexes TR or Total Return, which includes dividends.

Here's how I've stacked up against those markets:

Year Ben S&P 500 S&P Global 1200

2007 +15.34% +5.49% +10.23%

2008 -45.55% -37.88% -40.68%

2009(as of 11/6/09) +27.45% +20.85% +26.98%

Cumulative Return -16.14% -20.71% -20.52%

The Good News, I'm beating the markets!

The Bad News, I've still lost money!

Background and Current State

In late 2006, my wife and I decided to fire our financial planner and start to keep track of our own retirement funds. This included old 401k accounts that we rolled into IRAs and our current companies 401ks. Currently, we have no investments outside of though 2 IRAs and 2 401ks.

Taking 01/01/2007 as a starting point, here are the annual return of all 4 combined accounts

-2007 : +15.34%

-2008 : -45.55%

-2009(as of 11/6/9) : +27.45%

Note: I currently am using Google docs to keep track of things. I use the XIRR function to account for monthly inflow to the 401k accounts.

Currently, I've been lagging the markets for the last few months, as I've taken a more conservative bent on the markets. I'm under the impression that markets have run too far, too fast given underlying fundamentals. However the market seems to be providing us with evidence to the contrary.

In my next post I'll talk more about the make up and current status of the 4 accounts, as well as provide more about my thoughts and strategy.

Meanwhile here is a link to an interesting article I read on one of my favorite financial sites on the web, Minyanville. In it writer John Maudlin discusses the possible approaches to getting out of this financial mess, or ways we could make it worse, All America's Possible Futures.