Q. How do I know my investment's performance is good or not?
A. You can use the following two steps to evaluate your investment's performance:
Step 1. Determine the Right Benchmark Index
In order to evaluate your investment's performance, you have to use the right benchmark index.
For example, if you are a retiree and only invest in bonds, you shouldn't use stock market index as the benchmark. On the other hand, if you are an aggressive investor only invests in small cap growth stocks, you shouldn't use S&P 500 index as the benchmark.
Step 2. Find the Benchmark Index's Performance
Once you settled on the right benchmark index, you can look for that index's performance. MorningStar has a page that includes all the major indexes' historical as well as current performances, you can go there to find it out.
A. You can use the following two steps to evaluate your investment's performance:
Step 1. Determine the Right Benchmark Index
In order to evaluate your investment's performance, you have to use the right benchmark index.
For example, if you are a retiree and only invest in bonds, you shouldn't use stock market index as the benchmark. On the other hand, if you are an aggressive investor only invests in small cap growth stocks, you shouldn't use S&P 500 index as the benchmark.
Step 2. Find the Benchmark Index's Performance
Once you settled on the right benchmark index, you can look for that index's performance. MorningStar has a page that includes all the major indexes' historical as well as current performances, you can go there to find it out.
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