While it may be natural to try to compare your investments' performance with the numbers we see in headlines, using a market index to measure the success of your portfolio is a mistake that could cause you to stray from your financial goals.
Especially after a strong year for the markets like we've just had, it can be tempting to compare your performance to the return of an index, like the S&P 500. But while market indexes can be helpful to give you some perspective – you shouldn't use them as the only "yardstick" to measure your portfolio's performance.
In the end, the most important benchmark for you is the return you need to reach your long-term goals, which is what your portfolio was designed to accomplish. Therefore, we recommend reviewing your performance compared to your long-term goals, and not the return of an index. If you have any questions about your annual performance or any other investment-related questions, be sure to contact your financial advisor.
Diversification does not guarantee a profit or protect against loss.
Indexes are unmanaged and not available for direct investment.
Past performance of the markets is not a guarantee of how they will perform in the future.
Investors should make investment decisions based on their unique investment objectives and financial situation.
The meteoric rise in the price of bitcoin has dominated headlines recently. But the price of bitcoin and other cryptocurrencies has been extremely volatile due to significant uncertainties for these reasons.