Grow Your Dough Throwdown: February Update
Howdy all! If you remember from a few months back, I shared that I was partaking in an investing “challenge” with a number of other personal finance bloggers. This challenge, called the “Grow Your Dough Throwdown” is being run by Jeff Rose as a way to encourage a little competitiveness between fellow bloggers, but also as a way to encourage others to see that it is possible to invest, even with a little bit of money.
Anyhoo…it’s a full two months in to the challenge so I thought it would be appropriate to give an update on how my portfolio is performing. Before I do that, let’s take a look at the particulars of the Grow Your Dough Throwdown:
- Open a brokerage account at the beginning of the year
- Fund that brokerage account with $1,000
- Funds may not be added to the account over the span of the year
- You made trade as often as you wish, though no margin trading is allowed –which you really need to have at least $2,000 in a brokerage account to abide by minimum margin requirements
- Track the progress over the year in order to see who the winner is
My Grow Your Dough Progress Thus Far
As I shared in my original post, I opened an account with my favorite brokerage Scottrade. We have numerous accounts with them so it was only natural for us to do so. Anyway, I invested in the always exciting Vanguard Total Stock Market ETF or VTI and have aptly named my portfolio “Dull Investing Wins the Game” since Boring Investment Portfolio was already taken. I could’ve done any number of things like actively trading the funds, which would eat up my money with commissions, or go with a company I use. There’s nothing necessarily “wrong” with either of those as I do them to certain levels in different parts of our portfolio.
That said, my purpose behind going the index fund route was largely because my investing view is a long one and not short. Also, right now I lack the time to adequately watch the portfolio the way I’d like to so this was easiest for me to do. Anyway, $1,000 didn’t go too far…allowing me to purchase 10 shares of VTI at a limit price of $95 bringing me to a total of $957 with commission included and thus leaving me with $43 in cash left.
As of end of trading on February 28th, VTI closed at $97.40 and thus bringing the value of my stock holding to $974. With my left over cash of $43 I have a total of $1,017 in my Scottrade Roth, bringing my return so far to a whopping 1.7%. But, as you know, I’m not too bothered with that as it’s the long term that matters. In light of the other participants, some are doing better, some are not but my “dull” portfolio is sitting pretty much where I thought it would be.
If you’ve kept track of the market this year it was down a bit in January and has come back some in February to the S&P currently sitting up 1.38% at the time I’m writing this. With that in mind, I’m currently just over what the market has been doing and it likely all shakes out to be even once the minimal expense ratio and commission are figured in.
The Rest of the Year
Seeing as we’re only just a little over two months in to the year, God only knows where the market is going to go. With that (and other reasons) in mind, I’m planning on sticking it out with the straightforward strategy of my index fund to see where it takes me. I’ve not decided if I’m going to do anything with the $43 cash sitting in my portfolio…not that I could do a whole lot with it anyway. I could do something like buy a share of a lower priced dividend payer or even try out a lower priced option, but I’ll likely just stick with what I have.
Please know that my investment choice is not a recommendation by any means, but what I chose to fit best with my investment philosophy as well as life situation. So, what’s right for me very likely isn’t going to be right for you and vice versa.
Also know that this should be used as an encouragement that you don’t need a lot of money to invest. Sure, it helps, but it is by no means a requirement. I get emails regularly from readers asking to know where they should start and how much they need to start investing and the key to remember is not to allow lack of funds to hold you back as numerous brokerages will allow you to start with as little as $500.
All that said, this’ll be an interesting investing year, especially if this past week is any indication.
Photo courtesy of: 401(k)2013