Don’t Compare Your Investment Portfolio Against the Stock Market | Investing Sense



Are you using the right benchmarks to get to your retirement income goals? http://goo.gl/kZtE9d Many investors get caught up with comparing their portfolio’s returns to just one benchmark and index, for example, the S&P 500 or the Dow Jones Industrial Average. If you’re thinking “the S&P 500 did great last year, so I’m going to put 100% of my money into an S&P 500 fund and call it a day,” well, we have news for you. Your portfolio needs to be made up of more than just the S&P 500. That’s because different asset classes and investments do different things every year. This rationale would not have worked in a year like 2008, and it does not work for a person’s retirement when you need to rely on a regular and recurring income stream. The best accounts out there have lots of different types of investments in them: stocks and bonds, domestic and international issues, maybe even some cash or CDs. When you take these different investments and try to compare them to just one index, it’s like comparing an entire fruit basket to just one apple. It’s not an equal comparison. Instead, focus on how your accounts are moving you toward your goal. Goals are things like college savings. A vacation home. Retirement income. Goals are not “beating the Dow or beating the S&P 500.” Ultimately, it’s your goal that will help you determine if you’re successful or not. At The Mutual Fund Store®, everything we do revolves around you and your GOALS. In fact, those goals are the first things we look at when we meet with people, and we do that so we can start to figure out your chances of achieving them. Working with a registered investment adviser can help you figure out what things you change now that can help you increase the probability of meeting your retirement goals. We like to refer to this with our clients as “probability of success.” Whether you’re 40, 50, 60, or 70, your advisor should have a retirement plan for you that focuses on just that.

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  1. Great video


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