Monthly Investment Schedule?

Financial Planning - Financial planning in general. (Moderated) 

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Subject Author Date Monthly Investment Schedule? D T W .../\... 09-25-2007  Re: Monthly Investment Schedule? joetaxpayer 09-25-2007  Re: Monthly Investment Schedule? Beliavsky 09-26-2007  Re: Monthly Investment Schedule? Bill Woessner 09-26-2007  Re: Monthly Investment Schedule? - ANALYSIS? D T W .../\..... 09-27-2007  Re: Monthly Investment Schedule? - ANALYSIS? Bill Woessner 09-27-2007
Posted by D T W .../\... on September 25, 2007, 7:18 pm I want to make $100 systematic monthly withdrawals from my bank checking account to a taxable mutual fund. I currently have a $5000 balance in the mutual fund. The investment firm's web site allows setting up the deduction on any day of the month. Other than my checking account balance, what should I take into account when deciding on which day to withdraw? -- DTW .../.../.../... Posted by joetaxpayer on September 25, 2007, 8:26 pm D T W .../... wrote: > I want to make $100 systematic monthly withdrawals from my bank > checking account to a taxable mutual fund. > > I currently have a $5000 balance in the mutual fund. > > The investment firm's web site allows setting up the deduction > on any day of the month. > > Other than my checking account balance, what should I take into > account when deciding on which day to withdraw? You can look up the days the fund distributes its dividends and cap gains, and buy in after that. While it's silly to buy a fund on Monday and get a dividend on Tuesday for a $5000 purchase, for the $100, it's really a non-issue. You do need to be aware that you will need to track the purchases, 12 per year plus any dividends and cap gains that are reinvested. A spreadsheet can easily do the trick. Whatever you are investing in, you would likely benefit by diversifying at some point, maybe when the account passes $10K. JOE Posted by Beliavsky on September 26, 2007, 8:50 am > I want to make $100 systematic monthly withdrawals from my bank > checking account to a taxable mutual fund. > > I currently have a $5000 balance in the mutual fund. > > The investment firm's web site allows setting up the deduction > on any day of the month. > > Other than my checking account balance, what should I take into > account when deciding on which day to withdraw? There is some evidence http://www.cxoadvisory.com/blog/internal/blog4-05-07/ that stock returns are higher around the turn of the month, so I'd suggest investing before that period, although it will not make a big difference. People making monthly withdrawals may want to take them afterwards. Posted by Bill Woessner on September 26, 2007, 5:29 pm > Other than my checking account balance, what should I take into > account when deciding on which day to withdraw? This post was just BEGGING for some analysis. And since I have a lot of time on my hands, I went ahead and did it. I used Yahoo's "adjusted" data for VFINX which goes back to 3-27-87. I discovered that the 25th is actually the best day of the month to buy and the 31st is the worst. The difference is slight, only a 0.0757% difference in annualized return. But, hey, if you can get it for free, why not? I won't even begin to speculate on why this is. To do so is to try to get in to the minds of day traders and the like. Plus there's whatever effect the mind-bogglging tax code has. I also can't really say this result is statistically significant. It's just what the data dictates over the past 20 years. --Bill Posted by D T W .../\... on September 27, 2007, 5:09 am Bill Woessner wrote: "the 25th is actually the best day of the month to buy" Now I guess that I have to check with my investment firm. I'm sure it's in the fine print somewhere! If I set up the auto withdrawal from my bank account on the 25th. Does it get invested in the mutual fund on that day? -- DTW .../.../.../... >> Other than my checking account balance, what should I take into >> account when deciding on which day to withdraw? > > This post was just BEGGING for some analysis. And since I have a lot > of time on my hands, I went ahead and did it. I used Yahoo's > "adjusted" data for VFINX which goes back to 3-27-87. I discovered > that the 25th is actually the best day of the month to buy and the > 31st is the worst. The difference is slight, only a 0.0757% > difference in annualized return. But, hey, if you can get it for > free, why not? > > I won't even begin to speculate on why this is. To do so is to try to > get in to the minds of day traders and the like. Plus there's > whatever effect the mind-bogglging tax code has. I also can't really > say this result is statistically significant. It's just what the data > dictates over the past 20 years. > > --Bill > Similar Threads Posted How do you think I could earn a 2% monthly ROI May 8, 2007, 5:07 am Do you want to know your monthly payment after ARM resets? August 15, 2007, 6:23 am Stashing cash monthly for 1 year February 21, 2008, 5:35 am Ratio of Monthly Rent to Purchase Price October 1, 2006, 2:24 pm What is max investment? September 22, 2006, 7:06 pm Serious investment May 15, 2007, 11:39 am Bond Investment December 8, 2006, 9:38 pm investment decision January 5, 2007, 4:58 am Mortgage for investment outside US January 8, 2007, 3:51 pm investment plan for 25K January 27, 2007, 4:58 am