Magic Formula Investing

Using the Magic Formula for investing; based on "The Little Book that Beats the Market" I started a real life test with $50,000 of my own money. The blog described the process, thoughts, pain and ongoing updates on this adventure.

Saturday, February 24, 2007

Magic Formula Investing Anniversary - Overall Return

I know - I am celebrating too often for my 1 year anniversary - but yesterday was the actual date - and I got lots of numbers to throw around:

Return of the original 20 purchases = 31.2%
Index comparison are at about 15%
Mutual Fund comparison would be Small Blend -- Category 1 year return is 12.8%

I bought more stocks as the year went so my current actual overall portfolio is at 29.1%. If I would have bought with equal $ amounts throughout the year, I would be at 25.4% ( you can see that I got a little lucky with the Feb purchases) - that is a number many mutual funds use when they do their returns.

The overall return numbers are VERY good -- there are only 2 mutual funds in the Small Cap category that have done better than 30%. And even the 25% number would still be in the top1% for mutual funds in that category - with expenses at.25%

No need to say that I am moving ahead with my Magic Formula investments - although I am not expecting (of course one can always hope) to duplicate this success.

2 Comments:

Blogger Marsh_Gerda said...

Great 1st Year Erik. As I said as well, it works! I didn't comment on your return by sector. I don't think you have enough data to draw conclusions.

MG

6:40 PM  
Anonymous Anonymous said...

Nice, I have found you through magic-fomula-investing.blogspot.com
I'm doing the same thing but then on the European market.
A bit of a different approach but still test data of the MF. But I only started in oktober 2006 so no full year yet.
Blog is : InvestingEuro.com

11:23 AM  

Post a Comment

<< Home