January Portfolio Performance

A quick follow up post to my original on My Experiences with the Concept of Dollar Cost Averaging and my current continual investment in the Vanguard Australian Shares Index Fund.

The start of 2016 was a rough ride for those playing in the stock market, much of January was spent reading articles hailing the next GFC and all sorts of negative news which drove the stock market down. Quite strangely this was on the back of the US raising interest rates in December, providing fuel to the fire that the recession in America is over. However, it seemed that the over inflated Chinese stock market and its subsequent fall from grace heavily impacted the Australia share market with limited gains for my Vanguard Share Index Fund.

This month in December the fund had improved performance compared to the month of November.

Look it's not surprising that this months performance for the month was poor given the insane amount of negative coverage of the stock market occurred during the month of January. One thing to note though is what saved me from producing a negative rate of return was that my reinvestment plan kicked in and added the equivalent of a months worth of investment into the fund, completely free of charge. I am well aware of the process of investing quality products, holding those products and letting the compound growth work wonders and this is a clear example of letting your money do the work for you - a "free" months worth of investment via the automated reinvestment plan I've set up through Vanguard. Even more exciting to note is that the more I invest, the more value the reinvestment plan adds to the fund. 

January also was the first month I bought a LIC ETF fund (ASX: AFI), I've documented my investment approach here. I will purchase my next ETF fund in 16 weeks, I am still unsure whether to keep going with the AFI fund or go with perhaps another fund to diversify my portfolio further. Ultimately, I'll be comparing the performance of these LIC ETF funds and my Vanguard Index Fund.

I'll continue to update this on a monthly period to see whether the whole concept of investing into an index fund long term at regular intervals works. Next month I'll compare the performance of the AFI LIC ETF to the Vanguard Index Fund.