Even if your portfolio is way down in this bear market, it still may be doing okay. The true test of your portfolio is not how much it has gone down or up, but how it has done relative to comparable benchmarks. This article describes how you can compare your mutual fund holdings with customized benchmarks.

 

Submitted: Jul 10, 2008    Views: 126    Comments: 4    Likes: 1   


View Article: http://news.morningstar.com/articlenet/article.aspx?id=243814&pgid=rss


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Comments Received:

soczie
soczie

Beating benchmarks is a bear market like this provides very little consolation.

Posted: Jul 10, 2008

ktexas
ktexas

Yes, a portfolio that's doing a few points better than the S&P index is still depressing when the S&P is down over 20%. It still takes some faith that the index will be way up a couple of decades from now.

Posted: Jul 10, 2008

Sam Cass
Sam_Cass

Benchmarks are tough to swallow. From an investor standpoint they work when markets are up but don't when they are down. Do I care that I lost less than the guy next to me? In down markets the benchmark becomes the inflation rate. As long as I am doing better than the rate of inflation in a down market I'm happy. Anything else is a loss.

Posted: Jul 10, 2008

ktexas
ktexas

From a mutual fund investor point of view, you want to at least make sure your actively managed funds are doing as well as the corresponding benchmarks.

If you're happy with your asset allocation and you're beating the corresponding benchmark indices, you should consider yourself okay for the long term. I guess there will always be the question of having the right allocation and the question of the long term future of the markets.

Posted: Jul 11, 2008



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