Disclaimer: The information provided in this article is for educational and informational purposes only and should not be considered financial advice. The author is not a financial advisor and the content of this article is not intended to be a substitute for professional financial advice. Always seek the advice of a qualified financial professional before making any financial decisions.
If you are looking to measure the success of your investment portfolio, there is no better standard or benchmark than the S&P 500. This index, representing the 500 largest publicly traded companies in the U.S., has become the gold standard for investors looking to compare their portfolio’s performance against the broader market.
What is the S&P 500?
The S&P 500 is a broad-based index that covers a wide range of industries and sectors. It provides a comprehensive view of the performance of the U.S. stock market as a whole rather than just a tiny segment. This broad-range perspective is why investors so widely use it.
History
Furthermore, the S&P 500 has a long solid performance history, with average annual returns of around 10% since its inception in 1957. This consistent performance makes it a reliable benchmark against which to measure your portfolio’s performance and a useful tool for setting investment goals.
Compare Portfolio Performance
Using a tool like Savvy Trader can help you quickly compare your portfolio’s performance to the S&P 500 and other Indices like the NASDAQ, cryptocurrencies like Bitcoin, and even other Investor Portfolios. With this information, you can make more informed investment decisions and adjust your strategy accordingly.
The following image shows an example of Savvy Trader’s Portfolio Compare tool. As you can see, a portfolio called Tech Stocks & Crypto (green line) is compared to the S&P 500 (white line) over the past three months. In this timeframe, the green box on the far-right edge shows that the portfolio outperforms the S&P 500 by over 20%!
Savvy Trader
Savvy Trader is an online investment portfolio tool that allows you to easily track your portfolio’s performance against various benchmarks and indices. Its user-friendly interface and powerful analytics make it a must-have tool for any serious investor looking to stay ahead of the game.