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Today I want to highlight why I think it’s so important to change your perspective about tracking the success of your portfolio against a benchmark like the S&P 500.


A lot of funds are holding the same stocks (Visa, Salesforce, etc.), but in large amounts, in an effort to outperform the S&P 500. Well we’re in earnings season right now–what happens if those companies report bad earnings? That will result in big losses.

This is not an actionable warning, but instead a warning that everyone is “drinking from the same punchbowl” of ~50 stocks.

What you really should do is benchmark your returns against the rate of return YOU need to achieve YOUR life goals. (Work with a CFP(R) to calculate this percentage.) That’s the speed in which YOU should be driving down the highway. If people are flying by you, let ‘um go. By going 90 mph, they’ll increase the likelihood of getting a ticket, or worse, a crash. Focus on where you need to go, at the speed that works for you.

AS REFERENCED: Wall Street Journal article “With Stocks at Fresh Highs, Investors’ Portfolios Look Alike”

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