Investment Report Tutorial
What if I told you that just 4% can make the difference between retiring with $2,808,792* or $915,612*? Would that get your attention? It blows my mind that such a small number can make such huge difference. So choosing your investments wisely is critical. Do you want a resource that can help you make better investment decisions and potentially increase your returns? If so, keep reading. My Investment Report will help you.
Your investment selections today impact your future. The right information allows you to be more confident in your investment choices. The Investment Report will arm you with the information you need to select your investments.
This article explains each section of the Investment Report, so you may determine if this resource is right for you.
Investment Report (Sorted by Annual Return)
The report sorts investments by annual return. The first fund has the highest annual return and the last fund has the lowest annual return. The report also has another page that lists the funds in alphabetical order by ticker symbol. This makes it easier for you to look up the funds.
This report gets released monthly. The July 2017 Investment Report includes data through July 1, 2017.
“Fund Name” shows the names of the investment funds. This column also includes the type of share class. In the above picture, Goldman Sachs International Small Cap Insights Fund is the fund name. Institutional Shares is the class of shares.
“Category” gives you the type of fund. So the Goldman Sachs International Small Cap Insights Fund is a Foreign Small/Mid Value fund. Foreign Small/Mid Value means this fund invests in small to mid-sized foreign companies. The fund uses value as a criteria to select companies to buy.
“Symbol” lists the ticker symbol for the fund. The ticker symbol is unique to each fund. Use this to make sure you look up the right fund and share class. Googling the fund name can lead you to the wrong fund. You can plug this symbol into any finance site to find information on it. The symbol for the Goldman Sachs International Small Cap Insights Fund is GICIX.
“Annual Return” shows you the yearly growth rate of the fund since it started. I calculated the annual return by investing each month and reinvesting dividends. This is a historical return so the future return may be different. The Goldman Sachs International Small Cap Insights Fund annual return has been 10.91% since the fund started trading.
This annual return is different than annual returns you see on other financial sites. I calculated this return by purchasing shares of Goldman Sachs International Small Cap Insights Fund each month. Most financial sites calculate annual return by purchasing all shares up front.
There’s a problem with the way most financial sites calculate annual return. Most people don’t have the money to buy all their shares up front. You buy a few shares each month as you get paid. This will make a huge difference in your return. For example, the Goldman Sachs International Small Cap Insights Fund 5-year average return is 14.36% as of July 31, 2017. I pulled this number from Morningstar. If you invested monthly for 5 years, your actual return is 11.16%. If you built your retirement around the 5-year average return of 14.36%, you would come up $9,660,698** short of your retirement goal.
Now to get into the nuts and bolts of my math for a minute. I calculated this return by investing 10% of the United States’ median household income. On the 1st day of each month, I purchased shares of a given fund and I re-invested any dividends. This gives you a more accurate return you can use to calculate how much money you accumulate.
“Biggest Decline” shows you the largest amount of money you lost if you invested in this fund since it started trading. This is a historical decline so future declines could be more or less. The Goldman Sachs International Small Cap Insights Fund had a biggest decline of 17.5%. This means if your portfolio was $100, it would have been $82.50 at it’s lowest point.
I used the same assumptions and methods to calculate the biggest decline. I invested 10% of the United States’ median household income. On the 1st day of each month, I purchased shares of a given fund and I re-invested any dividends.
The purpose of the biggest decline is to give you an idea of how much money you could lose when you buy this fund. If you are okay with that, this fund may be right for you. If you aren’t okay losing that much money, this fund isn’t for you.
Longest Recovery (Months)
“Longest Recovery” gives you the longest length of time it took for the fund to recover its full value. I measured the recovery in months. This is a historical recovery so future recoveries could take more time or less time. The Goldman Sachs International Small Cap Insights Fund had a longest recovery of 7 months.
I used the same assumptions and methods to calculate the longest recovery. I invested 10% of the United States’ median household income. On the 1st day of each month, I purchased shares of a given fund and I re-invested any dividends.
The longest recovery gives you an idea of how long it could take to gain back your money. This information is useful when you are getting close to a time when you will need to withdraw your money. If you only have 3 months until you need your money, the Goldman Sachs International Small Cap Insights Fund may not be right for you.
The Investment Report started tracking the fund on the date in the “Date Started” column. Usually, I started tracking the first full month the fund started trading. Investment Report started tracking the Goldman Sachs International Small Cap Insights Fund on 11/1/2007.
Funds put your money in investments such as cash, stocks and bonds. How they divide up your money into investments is their “Investment Allocation.” The Goldman Sachs International Small Cap Insights Fund used 98.6% of your money to buy “Stock” and 1.4% to buy “Other.” Now let’s dig into the investment options underneath Investment Allocation.
Funds sock your money away in a bank account or money market fund when they put your money in “Cash.” Cash earns very little interest so don’t expect a good annual return but you won’t lose any money either.
When funds buy “Stock,” they buy ownership in companies that fit their Category (see Category above). The Goldman Sachs International Small Cap Insights Fund buys small to mid-sized foreign companies. Stocks give you the potential to earn a higher return. Stocks also give you the potential to lose more of your money too.
When funds buy “Bond,” they loan money to companies that fit their Category (see Category above). The Goldman Sachs International Small Cap Insights Fund does not buy bonds. Bonds give you a lower ceiling on returns than stocks. But bonds give you a lower potential to lose your money as well.
“Other” catches holdings that do not fit in neatly categorized investment options like stocks and bonds. Options, futures and swaps fall in Other. The Goldman Sachs International Small Cap Insights Fund holds 1.4% of its total portfolio value in Other.
Preferred stock fits into “Preferred.” Preferred stock is like common stock but preferred stock gets a fixed dividend. When a company pays dividends, preferred stock gets priority over common stock for those dividends. The Goldman Sachs International Small Cap Insights Fund does not hold preferred stock.
When a fund buys convertible bonds and convertible preferred stock, those assets go into “Convertible.” Convertible bonds and convertible preferred stock can get converted into common stock. The Goldman Sachs International Small Cap Insights Fund does not hold convertibles.
Funds on the List
At this point, you probably want to know what funds the Investment Report includes. If you click the link below that says “Free – List of Investments”, you can get a list of investments on the latest Investment Report for free. I would list them in this article but it’s easier to send you a list. I add more funds every month and I do take requests. So if you have a fund you want me to add, send me an email with the fund ticker symbol at joshua (at) financefooting.com.
Why do you release the Investment Report monthly?
Returns change monthly so you need to make sure your investments continue to meet your retirement goals. In addition to returns changing, I add new funds each month.
I charge $17.94 for the Investment Report. Why the odd price? If you bought the Investment Report every month for 40 years, $17.94 would be 0.01% of your return. So if this report helps make your return 0.02% higher, you double your money. 0.02% is a low bar to hit. I think you can do even better than that.
There are no obligations to buy future monthly reports. I know this hurts my bottom line but I don’t want you to feel like you’re making a huge commitment. I want to earn your business every month.
If you click the link below that says “$17.94 – Investment Report,” you can buy the September 2017 report using PayPal.
I want you to be happy. I want you to feel like $17.94 was money well spent. That’s why I went into this much detail explaining the report.
But when I send you the report, I can’t get it back. You have the information. For this reason, I don’t issue refunds.
I know this report helps you as much as it helps me. I use it to feel confident in my investment selections, mentally prepare for the bad economic times and make better investment decisions.
*That’s investing $600 per month for 40 years at a 9% return and a 5% return.
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