One year ago we bought Timberland (TBL) and the results were unfortunate. If we measure from that day, we achieved 5.27% increase in our total portfolio. Not stellar, but not terrible for our "shakedown cruise". I believe most people of at least average intelligence can do better with stocks than mutual funds. As we progress, I expect we will do that.
The one year mark is not necessarily a true measure for a couple reasons.
1) We deposited only 9.32% of the total funds we would deposit on April 6,2006.
2) We didn't deposit the other 90.68% of our funds until August 22, 2006.
How would we account for this lack of opportunity to invest funds? We could have possibly included the interest earned by the other funds from April 6 to August 22. I prefer to multiply each percentage by the amount of time the funds were available. I don't know if this is the way "they" do it. I am learning and looking for a reasonable method of calculation.
9.32% x 365 days = 34.02 days
90.68% x (7 months & 15 days or 31 days + 30 + 31 +30 + 31 +31 +28 + 15 =) 227 days = 205.84 days
34.02 + 205.84 = 239.86 which rounds up to 240 (days with the ability to invest)
365 days divided by 240 days equals 1.52
1.52 x 5.27 = 8.01
8.01% is closer to the respectable increase for which we are hoping.
Without Timberland we could have been in double digits, just by investing in a stock that broke even. The Google Finance page on TBL is below. In our back office at Scottrade, when I search TBL, they have its S&P ranking listed as 1 star (strong sell). I'm not exactly sure of all the ins and outs, but my guess is that that is not a good sign.
http://finance.google.com/finance?q=tbl
After the remainder of the money was deposited here are the first two posts. The very first post on this blog is quickly available by clicking on the title of today's post.
http://businessownerinvestment.blogspot.com/2006/09/up-day-did-you-think-i-forgot.html
http://businessownerinvestment.blogspot.com/2006/09/we-beat-them-again.html
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Business Owner Investment
Showing posts with label mutual funds. Show all posts
Showing posts with label mutual funds. Show all posts
Friday, April 06, 2007
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