How Should You Measure Your Portfolio's Performance?

October 26, 2020
Almost everyone wants high returns from their portfolio, but how do you know if you are using the right benchmarks to measure those returns?

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After you listen

Given the strong market rebound this year, many investors might wonder whether their performance is, in fact, good enough. And that makes sense—we all want high returns. But is shooting for the highest return really the best approach? If a portfolio lags the market indexes we see on the news, our inclination is to feel that something is wrong. However, few diversified portfolios can track a single index, so how should you measure your portfolio's performance?

In this episode, Mark Riepe interviews David Koenig, vice president and chief investment strategist for Schwab Intelligent Portfolios. Mark and David discuss which indexes can be used as benchmarks for certain asset classes, staying on track with your goals, risk tolerance, market volatility, and other issues.

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Investors should consider carefully information contained in the prospectus or, if available, the summary prospectus, including investment objectives, risks, charges, and expenses. Please read it carefully before investing.

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

Investing involves risk including loss of principal.

Diversification and asset allocation strategies do not ensure a profit and do not protect against losses in declining markets.

Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly. For more information on indexes please see www.schwab.com/indexdefinitions.

Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.

Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed income investments are subject to various other risks including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications and other factors. Lower rated securities are subject to greater credit risk, default risk, and liquidity risk.

International investments involve additional risks, which include differences in financial accounting standards, currency fluctuations, geopolitical risk, foreign taxes and regulations, and the potential for illiquid markets. Investing in emerging markets may accentuate these risks.

Small cap investments are subject to greater volatility than those in other asset categories.

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