I did an interesting project the other day-- I went back through my E*Trade investment transactions to trace all the cash I put in and took out. This goes back to sometime in 2001 or even a bit earlier, I think, when I first deposited about $1,000 in order to start doing some investing outside of my 401k. Other than that, all my money had been in savings accounts and CDs up to that point.
When I totaled everything up, my net contributions to my E*Trade account were about $33,875. This was never done on a regular basis-- I'd sometimes put in a couple thousand dollars at a time, sometimes more. And there was a period in 2005 and 2006 where I cashed in some funds and took out money in order to pay the down-payment and closing costs on my condo.
As of the day I did this, the current value of my E*Trade account was $49,779. So my net investment gains were $15,904, or a total return of about 47%. It's interesting to compare this to how E*Trade shows my current portfolio gains as an increase of about $2,960 or 6.3%.
Obviously, two very different calculations are being done here. E*Trade considers every reinvested dividend as part of the cost basis the gain is calculated against, so as shares go up in price, those incremental purchases have gained less in relation to the current price. By either method, it's hard to really say how much my annual rate of return has been overall because I've bought and sold various funds at various times, and it's all a bit complicated, at least for someone like me whose math expertise hits a brick wall at a certain point!
Since I put money in and took it out over 10 years, I can't really compare my performance to an initial investment of $10,000 that was just put into a fund and left sitting there with all gains reinvested, which is the standard way funds are compared on E*Trade. But just to look at a few examples, the first of which seems to have the highest average annual return over the 10-year period of any mutual fund offered on E*Trade:
|Symbol||$10k invested 10 years ago now worth||Avg. Annual 10 Year Return|
INIVX and BGEIX are gold/precious metals funds (that I really wish I'd invested in!), EITEX is an emerging markets fund, DPCAX is a China fund, and AAFPX is an S&P 500 index fund.
Anyway, to me, the bottom line is that I have $15,904 that I didn't have before, and that's quite a lot better than just looking at my current E*Trade balance. I've invested in a variety of stocks and mutual funds without any cohesive strategy other than to have a blend of aggressive and conservative investments and not put all my eggs in one basket. Given that we've been going through an extraordinary economic crisis, with the S&P 500 about 20% below where it was 10 years ago, and the Dow about flat over that period, I think I've done ok.