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My investment portfolio is made up of several stocks, mutual funds, and bonds I've put money into over the years.

My question is: If I had put all of my investments over the years into a S&P 500 index fund instead, how would it have performed compared to my current portfolio? How would I figure this out? This would includes all reinvested dividends and any fees paid.

EDIT: To put my question another way, "[If] instead of doing whatever I did, I invested in an S&P index fund, how would I have performed?"

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It's easy for me to look at an IRA, no deposits or withdrawal in a year, and compare the return to some index. Once you start adding transactions, not so easy. Here's a method that answers your goal as closely as I can offer:

SPY goes back to 1993. It's the most quoted EFT that replicates the S&P 500, and you specifically asked to compare how the investment would have gone if you were in such a fund. This is an important distinction, as I don't have to adjust for its .09% expense, as you would have been subject to it in this fund.

Simply go to Yahoo, and start with the historical prices. Easy to do this on a spreadsheet. I'll assume you can find all your purchases inc dates & dollars invested. Look these up and treat those dollars as purchases of SPY. Once the list is done, go back and look up the dividends, issues quarterly, and on the dividend date, add the shares it would purchase based on that day's price. Of course, any withdrawals get accounted for the same way, take out the number of SPY shares it would have bought. Remember to include the commission on SPY, whatever your broker charges.

If I've missed something, I'm sure we'll see someone point that out, I'd be happy to edit that in, to make this wiki-worthy.

Edit - due to the nature of comments and the inability to edit, I'm adding this here. Perhaps I'm reading the question too pedantically, perhaps not. I'm reading it as "if instead of doing whatever I did, I invested in an S&P index fund, how would I have performed?" To measure one's return against a benchmark, the mechanics of the benchmarks calculation are not needed. In a comment I offer an example - if there were an ETF based on some type of black-box investing for which the investments were not disclosed at all, only day's end pricing, my answer above still applies exactly. The validity of such comparisons is a different question, but the fact that the formulation of the EFT doesn't come into play remains. In my comment below which I removed I hypothesized an ETF name, not intending it to come off as sarcastic. For the record, if one wishes to start JoesETF, I'm ok with it.

  • "if instead of doing whatever I did, I invested in an S&P index fund, how would I have performed?" this is what I was asking. The argument for passively managed funds over active funds is that in the long term beating the market is difficult, if not impossible. I wanted to see if I was beating the market as an exercise. – zippy May 23 '11 at 21:28
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I have asked myself this exact same question many times. The analysis would be simple if you invested all your money in a single day, but I did not and therefore I would need to convert your cash transactions into Index fund buys/sells. I got tired of trying to do this using Yahoo's data and excel so I built a website in my spare time. I humbly suggest you try my website out in the hopes that it helps you perform this computation: http://www.amibeatingthemarket.com/

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How S&P 500 returns are calculated is jotted down here. You should follow the same methodology i.e. base-weighted aggregate methodology to calculate your own returns. Anything different and it would be an incorrect comparison.

  • This is a great answer to "How is the S&P index calculated?" The question here was different. How to compare one's own return to an S&P index fund. – JTP - Apologise to Monica May 21 '11 at 14:41
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    @JoeTaxpayer: But isn't DumbCoder answering the question? He's saying you need to use the same methodology as S&P, otherwise it's a bogus comparison (you're comparing apples and grapefruit). – Peter K. May 21 '11 at 16:17
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    @JoeTaxpayer - Are you being sarcastic about the Dumb in my name, which is surely uncalled for ? You can disagree with my answer or my viewpoint, but no need to start a personal diatribe. – DumbCoder May 21 '11 at 19:44
  • @Peter K - No. The composition and calculation of the S&P is actually immaterial to the OP's question. In fact, if there were a JoesETF which had as its underlying assets nothing but a random number generator, my answer would still apply to the question comparing one's portfolio to one invested in the JoesETF, so long as there's daily pricing and dividend (if any) available to perform the calculations. I'm not sure one can take this answer and go to a spreadsheet to reach a conclusion, which was the intent of my step by step instructions. – JTP - Apologise to Monica May 21 '11 at 22:02
  • lord, no. I just re-entered the comment to fix my stupidity. I was trying to make a point, which of course translated to text poorly. – JTP - Apologise to Monica May 21 '11 at 22:04

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