As promised last year, here’s my 2005 Investment Performance update. My 403b account (VFINX, VWNDX, VEXPX and VTRIX) was up 6.7% and my individual stock investments were up 22.0% as compared to the stock market (VFINX) being up 4.7%. That makes 4 years in a row that my overall investments have beat the index and 2 years in a row that my stock picks have. It’s that second comparison that is most important to me - my individual stock picks versus the index. I have little control over our 403b accounts, being limited only to mutual funds, so I have much less confidence that I’ll be able to consistently outperform there.
| Date | Me | VFINX |
|---|---|---|
| 1996-2005 | 5.7% | 5.9% |
| 1996 | 22.7% | 35.7% |
| 1997 | 15.3% | 28.6% |
| 1998 | 15.1% | 24.9% |
| 1999 | 66.0% | 26.1% |
| 2000 | -25.8% | -7.4% |
| 2001 | -33.1% | -12.3% |
| 2002 | -21.1% | -22.1% |
| 2003 | 31.7% | 30.1% |
| 2004 | 13.5% | 11.7% |
| 2005 | 13.2% | 4.7% |
Notes: These are calculated using the XIRR function in OpenOffice. The XIRR function takes a series of cash flows in or out of an account and returns the internal rate of return for that account. It’s the best way to compare portfolio returns when investments or withdrawals are made on an irregular basis. The VFINX column shows how I would have done if I had simply invested all my money into VFINX, a low-cost mutual fund which tracks the S&P 500. This number will not match numbers you see posted for VFINX for a given year because it depends on the timing of my investments. Note that I include the cost of commissions in my performance, but not in VFINX’s.