From the course: Developing Investment Acumen

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Track progress vs. indices and public data

Track progress vs. indices and public data

From the course: Developing Investment Acumen

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Track progress vs. indices and public data

- So, how are your investments doing? If they're growing, then you're doing a good job. But could you be doing even better? That's a good question to ask yourself. Gauging how well you're doing depends on two things. First, it depends on how much risk you've taken. Risk is what creates potential for significant gains. So you need to set your expectations based on the amount of risk you've taken on. If you take on little risk, you shouldn't expect to generate tremendous growth in your investments. At the same time, if you don't take on much risk, you shouldn't expect your portfolio to lose much value, either. By not taking on much risk, you lower your chances of getting hit by an economic downturn. Secondly, it depends on how well the overall market is doing. If you hold a lot of bonds, you shouldn't expect outsized gains when the economy is in good shape. But if things turn negative, you shouldn't expect to lose much either. Conversely, if you have a lot of stock in your portfolio…

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