I have written numerous times about VTSAX, Vanguard’s Total US Stock Market fund. It plays a significant part of my portfolio. I first found myself interested in tracking my purchases of it in early 2020, when it dipped precipitously (along with everything else) and I bought as much of it as I could.
To be fair, VTSAX has so far been an easy fund to love. The U.S. stock market–especially the “large cap” sector, which includes big tech companies we hear about constantly in the media–has been the leading asset class for over a decade.* Back when I started investing in April 2015, the price of VTSAX was about $52. Today it is at $115. That means, in 8.75 years, it has more than doubled (to be exact, it has grown by 221%).
During the bear market of 2022, as the price of stocks and bonds fell, I switched my focus from our portfolio balances (which had fallen along with everyone else’s) to buying more share ownership. In other words, instead of focusing on the overall balance at the moment, I focused on how much we could buy… on discount! Most of my focus ended up being on my VTSAX purchases. That’s where I noticed something interesting: my VTSAX purchases in 2022 were nearly the same average price as they were in 2021! It turned out this was also true in 2023. Observe:
| YEAR | AVERAGE PRICE OF MY VTSAX PURCHASES |
| 2023 | $103.05 |
| 2022 | $102.15** |
| 2021 | $100.94 |
In other words, the average price in 2021 was $101. In 2022, it was $102. And in 2023, it was $103. This works out to slightly less than 1% increase each year. It means that despite all the storm und drang over the past three years, the average price at which I bought stayed stable. Given the volatility of the stock market, I’m gonna call three years of steady share prices a win š
Of course, VTSAX is currently well above this average, at $115. If the market continues in the upward direction it has for the past few months, this year’s purchases are likely to average much higher than the last three years.
That’s okay! In fact, it’s to be expected. Over time, new price “norms” will be established. As was true in my December 2022 post, VTSAX’s average buying range of $101-103 for the last few years–while lower than the last high of $118 in January 2022–is still much higher than it was just a few years ago.
For comparison, in early 2020 it reached $80… for the first time ever!
*As I noted in yesterday’s post about Larry Swede’s recent Morningstar article, this kind of thing can and does reverse: there have been decade-plus lengths of time where the U.S. stock market SERIOUSLY underperformed.
**This is a different figure than the $101.52 average price listed on my December 2022 post. I have no idea where the mistake occurred. Good thing I’m just a blogger-personal-finance-enthusiast, ie don’t have to be perfect with all my numbers!