My wife’s company moved their 401(k) to Fidelity in January 2001. For the most part, it was a good move. One feature that Fidelity has that I really like is the Year-to-Date Change screen that looks like this:
(If this were an anonymous blog, I would have no problem giving more details.)
Anyway, Fidelity started offering this information a couple of years ago. I really like the fact that it gives us our year-to-date personal rate of return, which happens to be 8% so far this year. On the last day of each year I like to print out this page along with the transaction history for the entire year because it gives a great summary of what went on with our account. Then I file this information in our 401(k) folder for future reference. I also have a massive Excel file that I have used to track every transaction in the 401(k) but I haven’t updated it since December, 2004.
How much attention do you pay to your 401(k) or retirement account? Do you check the balance daily, weekly, or monthly? I’m a daily guy (unless the market was really down). They say the more frequently you check your balance, the more likely you are to make changes. So far, I have never let the short-term market swings cause me to make changes. Instead, when the market is down I just think about all those extra shares we are going to pick up because of the lower prices!
UPDATE: In response to CK’s comment below, here’s what Fidelity has to say about the way personal rate of return is calculated:
Your Personal Rate of Return is calculated with a time-weighted formula, widely used by financial analysts to calculate investment earnings. It reflects the result of your investment selections as well as any activity in the plan account(s) shown. There are other Personal Rate of Return formulas used that may yield different results. Remember that past performance is no guarantee of future results.
I have written about personal rate of return in the past: