Comparing my performance against S&P 500

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BobaTeaGood
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Joined: Wed Oct 10, 2018 1:07 pm

Comparing my performance against S&P 500

Post by BobaTeaGood » Wed Oct 10, 2018 5:13 pm

I am a software entrepreneur with a considerable amount of my assets in the stock market. I am wondering if you may know of any good websites where I can track how my individual stock purchase decisions are performing against a benchmark (say S&P 500).

As individual investors, we know that each and every buy/sell decision is an individual decision. So my goal is to easily understand how my decision to buy (for example) TSLA on 3/14/2018 fared, compared if I had just put the money straight into S&P 500 on 3/14/2018.

livesoft
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Joined: Thu Mar 01, 2007 8:00 pm

Re: Comparing my performance against S&P 500

Post by livesoft » Wed Oct 10, 2018 5:22 pm

No web site will do this because your performance will depend on your transactions. You have to track your performance in something like MS Money (free download) by entering all your transactions and keeping them updated along with all the dividends that create transactions, too.

You can put in benchmark funds such as an S&P500 fund, but you probably have cash, bonds, other things that you want included in your performance, so your benchmark might be a LifeStrategy or balanced fund. That is, I would not compare to the S&P500 nor would I only track equities. I think you got to do the whole thing or you might fool yourself. For instance, if you are 90% cash and 10% equities, but only only compare your equities to the S&P500 that is not helpful.
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Freefallin
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Joined: Thu Oct 04, 2018 1:12 pm

Re: Comparing my performance against S&P 500

Post by Freefallin » Wed Oct 10, 2018 5:38 pm

I wouldn't waste my time buying and selling individual stocks.

TSLA
1 year return of -27.75
3 year return of 5.19
5 year return of 8.24

Compared to VFIAX Vanguard S&P 500 index
1 year return of 15.34
3 year return of 14.95
5 year return of 13.98

Don't look for the needle in the haystack, just buy the whole haystack.
"Pain is the touchstone of all growth." - Bill W.

Freefallin
Posts: 27
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Re: Comparing my performance against S&P 500

Post by Freefallin » Wed Oct 10, 2018 5:45 pm

With that said, Morningstar is always fun to play around with...
https://www.morningstar.com/stocks/xnas/morn/quote.html
"Pain is the touchstone of all growth." - Bill W.

pkcrafter
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Re: Comparing my performance against S&P 500

Post by pkcrafter » Wed Oct 10, 2018 5:48 pm

Boba, I'm not sure the S&P 500 is the appropriate index. Maybe you are holding lots of tech stocks or mid and small cap, so you have to find a benchmark that is similar to your holdings, and you also need to know the amount of risk you are taking. You also have to track trading costs and taxes if in a taxable account.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

michaeljc70
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Re: Comparing my performance against S&P 500

Post by michaeljc70 » Wed Oct 10, 2018 5:50 pm

I don't know of a site that would take into account all the purchase and sales over time. You can easily do this in Quicken or Excel. I'm not sure how useful comparing to a benchmark is if the benchmark has a lot of different key characteristics (diversification, risk, asset class, etc.).

delamer
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Re: Comparing my performance against S&P 500

Post by delamer » Wed Oct 10, 2018 5:54 pm

You need to decide if you want to compare just the change in the stock price to the change in the S&P500 price, or compare the total returns (which also includes reinvested dividends).

You can find the S&P500 index, either just the price or total return, easily with an internet search.

BobaTeaGood
Posts: 21
Joined: Wed Oct 10, 2018 1:07 pm

Re: Comparing my performance against S&P 500

Post by BobaTeaGood » Wed Oct 10, 2018 5:59 pm

livesoft wrote:
Wed Oct 10, 2018 5:22 pm
No web site will do this because your performance will depend on your transactions. You have to track your performance in something like MS Money (free download) by entering all your transactions and keeping them updated along with all the dividends that create transactions, too.

You can put in benchmark funds such as an S&P500 fund, but you probably have cash, bonds, other things that you want included in your performance, so your benchmark might be a LifeStrategy or balanced fund. That is, I would not compare to the S&P500 nor would I only track equities. I think you got to do the whole thing or you might fool yourself. For instance, if you are 90% cash and 10% equities, but only only compare your equities to the S&P500 that is not helpful.
Thanks for your reply. My goal is to compare a specific transaction vs some index. Comparing the performance of the overall fund (which includes cash, bonds, etc) is important too. I'm looking to create a website that can do this. Any interest in checking it out when it goes live?

BobaTeaGood
Posts: 21
Joined: Wed Oct 10, 2018 1:07 pm

Re: Comparing my performance against S&P 500

Post by BobaTeaGood » Wed Oct 10, 2018 6:01 pm

pkcrafter wrote:
Wed Oct 10, 2018 5:48 pm
Boba, I'm not sure the S&P 500 is the appropriate index. Maybe you are holding lots of tech stocks or mid and small cap, so you have to find a benchmark that is similar to your holdings, and you also need to know the amount of risk you are taking. You also have to track trading costs and taxes if in a taxable account.

Paul
S&P 500 was used just as an example. It could be another, more appropriate, index. Trading costs are fairly minimal. As for taxes, you'll have to pay taxes if you invest in an index or in an individual stock. So I think we can exclude taxes for now.

FactualFran
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Re: Comparing my performance against S&P 500

Post by FactualFran » Wed Oct 10, 2018 6:13 pm

BobaTeaGood wrote:
Wed Oct 10, 2018 5:59 pm
Thanks for your reply. My goal is to compare a specific transaction vs some index. Comparing the performance of the overall fund (which includes cash, bonds, etc) is important too. I'm looking to create a website that can do this. Any interest in checking it out when it goes live?
I certainly would not be interested in providing that level of detail about my investment transactions to a website. The web site could potentially do anything with the data. Of course, the brokerage that I use has the information, because they handle the transactions.

Elysium
Posts: 1414
Joined: Mon Apr 02, 2007 6:22 pm

Re: Comparing my performance against S&P 500

Post by Elysium » Wed Oct 10, 2018 6:16 pm

BobaTeaGood wrote:
Wed Oct 10, 2018 5:13 pm
I am a software entrepreneur with a considerable amount of my assets in the stock market. I am wondering if you may know of any good websites where I can track how my individual stock purchase decisions are performing against a benchmark (say S&P 500).

As individual investors, we know that each and every buy/sell decision is an individual decision. So my goal is to easily understand how my decision to buy (for example) TSLA on 3/14/2018 fared, compared if I had just put the money straight into S&P 500 on 3/14/2018.
You shouldn't bother very much with benchmarking, because you are going to underperform anyhow. It's like playing in the casino, any money you make will eventually be taken back unless you stop playing.

staythecourse
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Re: Comparing my performance against S&P 500

Post by staythecourse » Wed Oct 10, 2018 6:18 pm

Seems you are quite the evidence based investor so why reinvent the wheel. Read the seminal articles (and the real last nail in the coffin) of active management. Beebower, Hood, and Brinson (BHB) wrote "Portfolio Determinants" or something like that. Then wrote a 10 year follow up article seemingly kicking Hood out and putting a guy named Singer in (BSB). The studies were based on looking at the LARGEST pension funds in the country (thinking they should/ do have access to the top money managers on the planet) and seeing how the previous 10 years of their returns were and what determined them. The found as a whole active management (alpha) via security selection (what you are asking) and market timing (likely based on some valuation metrics) gave a NEGATIVE return. 90%+ of the variability of returns were determined solely by asset allocation. Their follow up study showed the same thing.

SO...

IF you accept the studies were done correct. No real arguments of that exist as they were published in peer review journal ?JFA. Then if you STILL want to pursue active management you either think you are smarter then the Wall Street guys who are in charge of 100+ million dollar clients OR you are not evidence based and are overconfident in your ability (either are dangerous) and will result in a losers game.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

HEDGEFUNDIE
Posts: 1257
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Re: Comparing my performance against S&P 500

Post by HEDGEFUNDIE » Wed Oct 10, 2018 6:40 pm

portfoliovisualizer.com/backtest-portfolio

livesoft
Posts: 63077
Joined: Thu Mar 01, 2007 8:00 pm

Re: Comparing my performance against S&P 500

Post by livesoft » Wed Oct 10, 2018 7:01 pm

HEDGEFUNDIE wrote:
Wed Oct 10, 2018 6:40 pm
portfoliovisualizer.com/backtest-portfolio
Portfolio visualizer cannot do what the OP wants to do. At least right now it cannot. The backtesting only uses month-end prices.
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HEDGEFUNDIE
Posts: 1257
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Re: Comparing my performance against S&P 500

Post by HEDGEFUNDIE » Wed Oct 10, 2018 7:07 pm

livesoft wrote:
Wed Oct 10, 2018 7:01 pm
HEDGEFUNDIE wrote:
Wed Oct 10, 2018 6:40 pm
portfoliovisualizer.com/backtest-portfolio
Portfolio visualizer cannot do what the OP wants to do. At least right now it cannot. The backtesting only uses month-end prices.
OP can let us know if month-end prices is not good enough.

BobaTeaGood
Posts: 21
Joined: Wed Oct 10, 2018 1:07 pm

Re: Comparing my performance against S&P 500

Post by BobaTeaGood » Wed Oct 10, 2018 7:15 pm

HEDGEFUNDIE wrote:
Wed Oct 10, 2018 7:07 pm
livesoft wrote:
Wed Oct 10, 2018 7:01 pm
HEDGEFUNDIE wrote:
Wed Oct 10, 2018 6:40 pm
portfoliovisualizer.com/backtest-portfolio
Portfolio visualizer cannot do what the OP wants to do. At least right now it cannot. The backtesting only uses month-end prices.
OP can let us know if month-end prices is not good enough.
Month end prices are definitely not good enough. A lot can happen in one month. Ideally, I'm looking at near-real time (based on when TSLA was purchased). Worst case would be price of index at market close.

BobaTeaGood
Posts: 21
Joined: Wed Oct 10, 2018 1:07 pm

Re: Comparing my performance against S&P 500

Post by BobaTeaGood » Wed Oct 10, 2018 7:17 pm

staythecourse wrote:
Wed Oct 10, 2018 6:18 pm
Seems you are quite the evidence based investor so why reinvent the wheel. Read the seminal articles (and the real last nail in the coffin) of active management. Beebower, Hood, and Brinson (BHB) wrote "Portfolio Determinants" or something like that. Then wrote a 10 year follow up article seemingly kicking Hood out and putting a guy named Singer in (BSB). The studies were based on looking at the LARGEST pension funds in the country (thinking they should/ do have access to the top money managers on the planet) and seeing how the previous 10 years of their returns were and what determined them. The found as a whole active management (alpha) via security selection (what you are asking) and market timing (likely based on some valuation metrics) gave a NEGATIVE return. 90%+ of the variability of returns were determined solely by asset allocation. Their follow up study showed the same thing.

SO...

IF you accept the studies were done correct. No real arguments of that exist as they were published in peer review journal ?JFA. Then if you STILL want to pursue active management you either think you are smarter then the Wall Street guys who are in charge of 100+ million dollar clients OR you are not evidence based and are overconfident in your ability (either are dangerous) and will result in a losers game.

Good luck.
I hear you on the "buy the index" vs "buy individual stocks" comment. Overall, I subscribe to buying the index. However, I do (and perhaps others here as well) buy and sell individual stocks. Just once, were you ever tempted? :)

So that's really the end goal of this question -- to see if that one "slip" of buying an individual stock was worth it.

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happyisland
Posts: 421
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Re: Comparing my performance against S&P 500

Post by happyisland » Wed Oct 10, 2018 7:45 pm

Thing is, even if it works out this time, it won't mean that it was a good idea. Don't confuse outcome with strategy.

MichCPA
Posts: 310
Joined: Fri Jul 06, 2018 9:06 pm

Re: Comparing my performance against S&P 500

Post by MichCPA » Wed Oct 10, 2018 8:12 pm

BobaTeaGood wrote:
Wed Oct 10, 2018 5:59 pm

Thanks for your reply. My goal is to compare a specific transaction vs some index. Comparing the performance of the overall fund (which includes cash, bonds, etc) is important too. I'm looking to create a website that can do this. Any interest in checking it out when it goes live?
You could plug in a fake purchase of VFIAX (Vanguard S&P500) in the same dollar amount as your actual purchase and compare the two in a free M* account. You will have to update the fake amount for dividends each quarter.

staythecourse
Posts: 6227
Joined: Mon Jan 03, 2011 9:40 am

Re: Comparing my performance against S&P 500

Post by staythecourse » Thu Oct 11, 2018 8:05 am

BobaTeaGood wrote:
Wed Oct 10, 2018 7:17 pm
staythecourse wrote:
Wed Oct 10, 2018 6:18 pm
Seems you are quite the evidence based investor so why reinvent the wheel. Read the seminal articles (and the real last nail in the coffin) of active management. Beebower, Hood, and Brinson (BHB) wrote "Portfolio Determinants" or something like that. Then wrote a 10 year follow up article seemingly kicking Hood out and putting a guy named Singer in (BSB). The studies were based on looking at the LARGEST pension funds in the country (thinking they should/ do have access to the top money managers on the planet) and seeing how the previous 10 years of their returns were and what determined them. The found as a whole active management (alpha) via security selection (what you are asking) and market timing (likely based on some valuation metrics) gave a NEGATIVE return. 90%+ of the variability of returns were determined solely by asset allocation. Their follow up study showed the same thing.

SO...

IF you accept the studies were done correct. No real arguments of that exist as they were published in peer review journal ?JFA. Then if you STILL want to pursue active management you either think you are smarter then the Wall Street guys who are in charge of 100+ million dollar clients OR you are not evidence based and are overconfident in your ability (either are dangerous) and will result in a losers game.

Good luck.
I hear you on the "buy the index" vs "buy individual stocks" comment. Overall, I subscribe to buying the index. However, I do (and perhaps others here as well) buy and sell individual stocks. Just once, were you ever tempted? :)

So that's really the end goal of this question -- to see if that one "slip" of buying an individual stock was worth it.
Great question. I have thought about it 3-4 times. Looking back EACH of those times the decision I would have made would have given me at least a 300% gain.

The reason I never and will never do it is simply I just won't place a large enough bet from my portfolio to move the needle. At this point, to make a noticeable difference in my life I would have to make at least 100k+ bet on a single stock to really make a difference. For me, it wouldn't make much a difference. I will end up getting to where I want without taking unsystematic risks.

Now if I wasn't getting to where I needed to be financially that is a different story. Unlikely I would take lottery attempts like individual stock buying. I would probably make a larger attempt to either make MORE money in my current job, get a second job, start learning and buy rental real estate (same as getting a second job), etc...

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

libralibra
Posts: 262
Joined: Sat Jul 30, 2011 2:01 pm

Re: Comparing my performance against S&P 500

Post by libralibra » Thu Oct 11, 2018 3:01 pm

BobaTeaGood wrote:
Wed Oct 10, 2018 5:13 pm
I am a software entrepreneur with a considerable amount of my assets in the stock market. I am wondering if you may know of any good websites where I can track how my individual stock purchase decisions are performing against a benchmark (say S&P 500).

As individual investors, we know that each and every buy/sell decision is an individual decision. So my goal is to easily understand how my decision to buy (for example) TSLA on 3/14/2018 fared, compared if I had just put the money straight into S&P 500 on 3/14/2018.
You could create a google spreadsheet and use =googlefinance() to track your lots. e.g.

Code: Select all

Date        Ticker   Index   Gain %    Benchmark %
3/14/2018   TSLA     SPY     -22.60%   -0.31%
You enter your info in columns A, B, C
Column D: =GOOGLEFINANCE(B2)/INDEX(GOOGLEFINANCE(B2,"price",$A2),2,2)-1
Column E: =GOOGLEFINANCE(C2)/INDEX(GOOGLEFINANCE(C2,"price",$A2),2,2)-1

If you want to be more exact, you could add a column for your own buy price instead of using the historical closing price (for the denominator in Col D).

(Note: Google data may not account for divs, whereas yahoo historical data has a column called "Adj Close" which does and a json API for it).

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