inMessment Game – First Quarter Results 2011

Comparison to Benchmark – The S&P 500 Index

The benchmark I have chosen to compare my results to is the S&P 500 Index. This is a broad index of 500 of the top US companies. Many investors and firms use this index as a general benchmark.

To make my comparison easier I have maintained my inMessment Game portfolio in a Google Finance portfolio as well. This is a little extra effort but I can get the chart shown below from Google and simply check a check box to compare it to the S&P 500 Index.

The blue line is my inMessment Game portfolio. The Red line is the S&P 500 Index. You can see that in January and February I was slightly trailing the index but in March I caught up. At this point I show to be slightly ahead, +6.12%. to +5.41%, so I guess I can claim success. (dancing around the room, beating the air with my fists, singing Eye of the Tiger!) In reality the long term will be the true measure of success.

The Good

My Core equity investments have done well. These are Large, Mid and Small cap US Index funds. It is interesting to see the performance difference between these three funds. Watching these Large, Mid and Small cap funds helps us to understand how different events affect these segments of the market.

My Sub-Core investments have done very well. These are Sector specific investments and I allocate less to these than Core investments. SLV is a precious metals ETF that tracks the price of Silver. PLD is a global REIT and gives me exposure to Real Estate.

Some of my Opportunity investments have done very well.

I bought Education Management on Jan 11 for a net of $1,011.51 and sold on Mar 1 for a net of $1,375.29, a nearly 36% return.

BlackRock, a financial firm, got a nice bounce when it was added to the S&P 500 Index.

Range Resources, a natural gas company and Medtronic, a medical equipment company have done nicely as well.

The Bad

From my Core investments, my bond fund has not done so well. From the headlines I have been seeing late last year and so far this year, it seems that bonds are not expected to do well now. I added bonds to my portfolio because all the asset allocation guides normally have bonds as a portion of the portfolio.

Since I am 39 right now and I plan to look at this long term I have been considering finding another place for this money. I may redistribute it in the other Core funds or, if I run low on cash and a good opportunity comes by, I may exit this bond fund for that.

From my Sub-Core investments, my International funds have under performed the S&P 500 Index. They are positive and I expect them to do better over the long term.

The Ugly

Two of my Opportunity investments have been down write ugly in Q1.

Nike I bought on December 27 when it was at $85.50. On March 18 the price dropped over 10% to the $77 range. Nike reported that material were becoming more expensive and cutting into their profit (read inflation!!!). Despite this drop, I feel this is a long-term, quality stock. On March 23 I doubled my position at a price of $76.96.

Bank of Ireland was the most “speculative” of all my trades. I had seen it bounce up and down and I was hoping to catch one of those bounces. I bought in on December 17 at a price of $2.58. It seemed to slowly continue down from there. In early March, and after talking with my dad about this game, I decided it was time to cut loses. I sold on March 21 at $1.97. A loss of -25.33%.

Major Market Events

There were two major world events that negatively affected the markets in the first quarter. The Libyan Revolution started February 17th. And the Japan earthquake and tsunami starting on March 11th.

You can easily see the impact of these two events in the benchmark graph. I have circled the timeframe for each event.

Full inMessment Game Portfolio

Here is the full portfolio as of March 31, 2011. I have categorized the investments in the following way:
Core: Long-term stable investments that will not change often.
Sub-Core: Still long-term but may trade more often.
Opportunity: Long or short-term trading opportunities.

inMessment Game Trade History

Below is the trade history for my inMessment Game. Since this is the first results post, I am including the history from the start of the game.

Join the inMessment Game

Now that you have read through my results why don’t you join the game yourself? It is completly free and the best way I have found to learn about investing.
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