My results from the third month of my Passive Versus Active Portfolio Experiment have been in for a while, but I’m just now getting around to publishing them. They are as follows:
Month 3 Results
Passive: I had one transactions this month; a dividend reinvestment. My passive portfolio increased by a total of 6.20%. This gain includes the commission that would have been charged had I liquidated my position at the end of the month. My dividend reinvestment is not subject to a commission.
Active: I had three transactions this month; 1 purchase, 1 dividend, and 1 sale. My active portfolio increased by a total of 0.88%. This gain includes commissions.
Benchmark: During the same time period, the S&P 500 increased by 3.62%. For the second time, one of my investment portfolios (active) failed to beat the benchmark for the month. My passive portfolio significantly outperformed the benchmark this past month.
Overall Results to Date
After three months, my passive investments have grown their lead in profitability. Both my passive and active investments have beaten the benchmark return of the S&P 500.
Passive Return to Date: 29.10%
Active Return to Date: 16.45%
Benchmark Return to Date: 14.68%
After three full months of putting real money on the line, I’m ready to end my experiment. I realize that over time, my trades could become more profitable, but the likelihood of such an occurrence doesn’t seem very promising. Plus, passive investing is so much easier. Since that’s the method that brought me the best actual returns with the least effort, I intend to move my entire portfolio into passive investments.
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August 7th, 2009 at 7:11 am
If you check my blog, you will see a data table of portfolio performance, some which go back into the 1990s. I use a spreadsheet, as well as Captool, so I am able to track cash flowing in and out of the portfolios as well as the benchmarks. In addition, this spreadsheet permits one to set up a benchmark that is appropriate for the Strategic Asset Allocation plan for each portfolio. Take a look as you might find this interesting.
Lowell Herr
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