$150 Investing Challenge - July 2019 Report

$150 Investing Challenge - July Report

I have been doing the $150 Investing Challenge since January 29th, 2018. This is the results of investing $150 each month for over a year.

A little background if you stumbled upon this Challenge Report. I started these challenges in 2018 as a way to show everyday people how investing and saving for your future is as easy as putting a little money aside and growing it using investment securities. As I developed these challenges, I wanted the amount that was saved to be affordable to anybody who was reading these reports. In the $150 Investing Challenge, I commit $150 per month to four index funds. The $150 would be split evenly in a Large Cap, Medium Cap, Small Cap, and International Index Fund. The goal is to keep it there for as long as it takes (30 + years long). This isn’t my retirement plan, but in order for readers to actually see it work, I have to make this longer than just 5 or 6 years. So as long as blogs and websites are still a thing 30 years from now, I’ll keep reporting on it month by month.

Results

As of 7/30/2019 investment date (all $150 Investing Challenge investments are made between the 26 - 30th of each month):

Investment Month Number: 19
Amount Invested Each Month: $150.00
Funds: Large Cap Index Fund, Medium Cap Index Fund, Small Cap Index Fund, and International Index Fund
Total Amount Invested: $2,850.00
Total Account Value: $3,009.14
Total Expected Value: $3,004.69 (See below for discussion)
Total Annualized Rate Return: 7.19%

Commentary

Prior to doing the analysis, I thought July was a great month, but we did see some decline primarily due earnings season. The S&P 500 index increased 1.4% over the month, but when you look at our results, it doesn’t reflect an increase of 1.4%. There were some significantly down days in July and that does drag investments as we have to make up our losses from the prior day(s) down to get to even before we are in positive territory.

Our expected return is 7% annually and we are still beating that (by a narrow margin). At a 7% annualized return we would be expecting a portfolio value of $3,004.69, but instead we are at $3,009.14. For some, a 7% return seems very conservative and it is, but after fund fees and the investment environment we are in today, a 7% return is a conservative reasonable rate of return for the market (especially with the pending decrease in the federal interest rate).

In just 19 months, we have grown our fund from $0 to $3,000, $150 at a time. As you know, this challenge is not based on a stock picking mentality. It literally is picking 4 index funds and riding them. They key is the consistent investment(s) we make in our index funds. It might not be 10% like the riskier options out there, but it is doing what we expect it to do which is to grow.

Summary

I am sort of disappointed by the results, but then again we didn’t necessarily lose money from the last report, so at least we are net positive for the period.

If you want to read more about this challenge, make sure you check out the $150 Investing Challenge page here.

To see more of our challenges, click on the challenge name below:

Until August, see you later.