S&P 500 Index Fund - August 2019 Report

S&P 500 Index Fund Challenge - August 2019

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 S&P 500 Challenge, I commit $65 per month to an S&P 500 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 8/12/2019 investment date (all S&P 500 investments are made between the 10 - 15th of each month):

Investment Month Number: 19
Amount Invested Each Month: $65.00
Funds: S&P 500 Index Fund
Total Amount Invested: $1,235.00
Total Account Value: $1,299.13
Total Expected Value: $1,302.03*
Total Annualized Interest Rate Return: 6.71%

Commentary

During the past month, the market (S&P 500) decreased by 4.02%. This was a weird month because if you remember from my comments in the July report, there was a 4% or so increase in the S&P 500 due to the federal reserve signaling a rate decrease at the end of July. Well, it happened and we saw the market drop nearly 5.6% over the next few days since the rate cut. The interesting thing is that the “market” priced in a rate cut within the market price, however whether the market liked it or whether the market expected a 0.5% reduction in fed rate (instead they got a .25% rate cut) the market didn’t like that. So our annualized took a hit because of the rate cut the federal reserve made towards the end of July.

At the end of the month, we achieved an annualized return of 6.71% which is about .29% below our target of 7%. As I am writing this, it won’t get better in the next month as we’ve seen a few down days since the purchasing of this set of shares and the posting of this report. Stay tuned to September 2019’s report and I’ll explain what has gone on.

If you want to read more about this challenge, make sure you check out the S&P 500 Index Fund Challenge page here.

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

Until September, see you later.

*Total Expected Value Calculation (Using a TVM Calculator)
Annuity Due Calculation - BEG on BA-II PLUS
N = 18
P/Y = 12
I/Y = 7%
PV = $0
PMT = -$65
FV = ? (Calculated to $1,237.03 + $65.00 = $1,302.03)