S&P 500 Index Fund - May 2019 Report

S&P 500 Index Fund Challenge- May 2019

I have been doing the S&P 500 Challenge since February 12th, 2018. This is the FIRST FULL REPORT for the S&P 500 Index Fund Challenge. I have always reported the results of the challenge in a summary format on financialgrit.com, however, it just wasn’t ideal. Therefore this is my first “new” report of the results. But rest assured, the same investing profile was used since the beginning.

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.


As of 5/12/2019 investment date (all S&P 500 investments are made between the 10 - 15th of each month):

Investment Month Number: 16
Amount Invested Each Month: $65.00
Funds: S&P 500 Index Fund
Total Amount Invested: $1,040.00
Total Account Value: $1,073.86
Total Expected Value: $1,086.76 (See below for discussion)
Total Annualized Interest Rate Return: 5.11%

Basic Commentary

As this is the first report, I thought I would explain the numbers a little bit more than what happened that lead to these results. On 5/12/2019, I made my 16th investment of $65.00. That brought the total invested to $1,040 and the account balance (after growth in the investment and reinvestment of dividends) to $1,073.86. All dividends gets invested back into the fund, no money is ever taken out.

You will notice that in the above results there is an amount that is reported as Total Expected Value. The Total Expected Value is what I would have expected the fund to be worth if I was able to get a 7% return on my money. So after 16 months, with my $65 investment on 5/12, I should have had a balance of $1,086.76, but I don’t. I’m off by about $12.90. That’s okay though. I’m playing the long term game. Hopefully over 20 - 30 years I can achieve an average return of 7%.

Why 7%? If you read articles on the internet, people swear by a 9% return over the long haul of the S&P 500. The problem with using 9% is the the average investor doesn’t get 9% and because of fees associated with index funds, you probably won’t get 9%. Most conservatives will calculate returns at 7% knowing that you’d probably achieve somewhere between 7% - 9%. We use 7% because that is a good conservative number that doesn’t overstate possible returns.

The final statistics you will see is the annualized interest rate of return. This is a complex calculation if you haven’t taken a finance or accounting course. But basically I use a calculator that annualized the return. It takes into account time, investment per period, start balance, and end balance to come up with an interest rate that we can base everything to. A 5.11% return over 16 months is not that bad, but it isn’t the 7% we’re looking for. This is only a reference, we need the results to be consistent in the future to make it work. A one-time blip or some good luck in the short term doesn’t mean that is what we are getting on the long haul. Remember, investing for the long term is a marathon, not a sprint.

Some may wonder what fund am I using for investment. The answer is…I won’t say. This site is not a stock picking investing site. I also do not want to influence a particular person’s decision based on a website commentary. As a prudent investor, you need to make those choices for yourself because ultimately, the results of your own investments are going to hurt you and only you. I do not post which investments I use for my challenges, but I can assure you they are all reachable by everyday people. Instead of giving you the stock, I am giving you the investment category. In this case, it is the S&P 500 index.

The Results Commentary

Although this is the first report under a new platform, I can tell you that between last month and this month, we took a loss in position with our S&P 500. Last month, I had an investment balance of $1,041.72 and my target balance at a 7% return was $1,015.84. Which means, last month we were at our 7% target and this month we were below our 7% target. What made the change? There has been a lot of discussion about trade in the United States and the one thing you need to know about the investing markets, they love predictability. The investing markets DO NOT LIKE UNCERTAINTY. So when trade talks came up, it kind of spooked the market (and has been for the past 8 - 12 months). We’re seeing the market react to the uncertainty.

It is also important to reiterate that if you are investing for the long term, it is important to invest for the long term. This means that we don’t overreact when the market goes down. The market will go down, that’s a fact. The market will go up over a long period of time (or at least that is what we’ve been told and that is what has happened in history). It’s not time to sell low and buy high, we really need to ride it out. So instead of not investing when the market is down, you should continue investing because you are buying those securities on the cheap.


So May wasn’t a terribly great month overall. That’s okay. I am still at an annualized return of 5.11% and I would expect over the LONG-TERM the return should get near 9% (or at least that is the goal). The cool thing about these investing challenges is that you set them and you forget them. So every month I put in my trade and then I am done for the month (I can’t automatically set a purchase for the same day each month because I need to invest at least $100 a month to 1 index fund according to my broker, so I’ll keep on doing this manually.

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 June, see you later.