2018 Year End Index Investing Results
Sorry it’s been a while since my last post. Busy end of year. Like pretty much everyone else my retirement accounts got KILLED during the end of 2018 market correction. The S&P 500 dropped from a high of 2930 September 20, 2018 to a low of 2351 December 24, 2018 or 20%. Today the S&P 500 is sitting at 2700-so it’s still in recovery.
As a long term, passive investor, I remained invested and continued my usual 401k contributions and squeezed my eyes tight during the volatility. My balance had climbed to $289k in September only to plunge to $241k by Christmas Eve. Today I’m only at $284k-still not quite at my account’s high. On a bright note-all of my year end dividends, around $6k, were reinvested at market lows-so I was able to buy when the market was essentially on sale.
Starting Balance: $229, 553.52
Final Balance: $255,875.42
Loss: -$18,528.13 or -6.7%
Actually it’s not that bad given the total market dropped 20%. That’s the power of dollar cost averaging through regular investments. Because I invest at regular intervals throughout the year (first and middle of the month) and last year’s market was so volatile, sometimes I’m bought when the market was down and sometimes I bought when the market was up. This led to buying at prices on average below last year’s highs so my account didn’t fall a full 20% for the year. I also received dividends from my index funds and a handful of individual stocks (I know sometimes I just can’t resist a bit of gambling). CEO’s and company management teams typically do everything in their power not to cut dividends-that’s a surefire way to drop their company’s stock price-so I got some amount of return even during the market correction. And of course I reinvested when shares were cheap.
All in all, I’m still feeling good and sticking to my plan. Here’s to decent returns in 2019 and me finally cracking $300k! Cheers!