Saturday, November 13, 2010

Index Back to February 2006

I started investing in MFI in February 2006 and that was when I started my tracking portfolios. So I have created an index showing how MFI has done versus other major domestic indexes. The simplistic approach I took was that each year the index is comprised of a basket of 50 stocks over 100m from the screen at the outset of the year. These are held for a year and then replaced by a new basket on January 1st the next year. I have created (to the best of my ability) the day-by-day movements of the baskets. I think it should be pretty accurate and does include dividends insofar as Yahoo includes dividends.

I have to say, that the chart really surprised me. The movements of the index are extremely highly correlated with the broader index (in this case the Russell 3000). I guess based upon my experience and my opinion of "streakiness" that it would deviate more. Check it out!

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