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The following is a staff writer post from MikeS.  He is a married father of 2.  So, with the cat, he ranks number 5 in the house.  He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.

The stock market has always amused me.  One day the world is apparently caving in, the next day everything is rainbows and butterflies.  I keep track of my 401K balance relatively often, more so to keep an accurate net worth number, not to see my rate of return.  Market gyrations do not change my investment plan.  My asset allocation is based on my risk tolerance and daily or monthly fluctuations are not going to change it.  I thought I would give you a peak into how my 401K has done over a 12 month time frame at monthly intervals as well as how it did during the Brexit volatility.

Monthly Ups and Downs

I went back and looked at the last 12 monthly statements from my 401K.  I was only interested in the change in market value, not the ending balance.  The ending balance would have been impacted by my contributions, so I wanted to look at only what happened relative to the market.

To give context, my 401K balance at the beginning of the first month was $64,252.  The first month was September 2015 and it was not a good month for the market.  I had market returns of -$2,125.  My usual quip when I see numbers like this is “Guess I’m not retiring tomorrow”.  I guess the world was caving in that month.  Now, had I adjusted my investments or pulled completely out of the stock market, I would have missed out on the butterfly parade the following month.

October 2015 was a good month; I had market gains of $4,223.  November was basically unchanged at up $7.  That’s not a typo, my market gains were only $7.  The world was again falling apart in December and January with losses of -$1747 and -$3,931, respectively.

In February 2016, I guess everyone was shell-shocked from the previous 2 months as my return was down slightly at -$65.

The butterfly parade returned over the next 3 months as I had returns of $4,808, $1,063 and $926 for the March 2016 through May 2016 time frame.  June 2016 was uneventful with market losses of $59.

Happy days returned again for the last 2 months with gains of $3,084 and $336 for July and August.

My ending balance at the end of August was $88,859.  I kept steady in my investing and was able to enjoy the good months, while also purchasing more shares during the bad months.

That’s the beauty of dollar-cost-averaging.  Five of the twelve months had negative returns for a total loss of -$7,929.  The seven good months had returns totaling $14,449.

Brexit Volatility

I was quite curious to look back at the daily returns for my 401K during the market’s Brexit volatility.  The vote happened during the day on June 23rd and the general news coverage was that Britain would remain in the European Union.

As a result, my 401K was up for the day, $1,309.  Then after the results came in, the world was apparently ending.  The next two days saw market losses of -$3,739 and -$1,702.  The next four days all saw market gains $1502, $1,413, $1,078 and $262.  In told, from the day of the vote which was on Thursday to the end of the following week, my overall market gains were little changed at $124.

Had I panicked and pulled my money out of the stock funds during the two-day fall, I would have missed out on the rebound over the next four days.

Long-Term Thinking

Since I am investing for the long-term, I never react to isolated events.  Sometimes I wish I had a pile of money that I don’t know what to do with so I can buy on the large drops, but I’m not that financially stable yet.  I believe that in the long run, the market will produce positive returns.  If it doesn’t, I probably have bigger problems on my hands.