The Benchmark Game

Presented by the Hardee Investment Group and RBC Wealth Management –

I’ve heard it all too often: “The market is up, but I’m not up as much. Why?” Well, let’s think about it for just a moment. The market is 100 percent invested, all of the time. You most likely weren’t or aren’t. The market knows no risk. You probably do. There’s this little thing we navigate through called “life” and the market doesn’t care that you need a new roof. The market doesn’t have to worry about investment objectives and time horizon. There’s more than likely an end goal and a date you’d like to reach that goal, like retirement for example, and that means nothing to the market. It will continue into perpetuity far after your children have reached their retirement years. The market may have gone up because some big name companies were having great years, but you didn’t have them in your portfolio, which is why your portfolio may not have gone up as much as the overall market. By comparing your individual portfolio to the market, you’re setting yourself up for a losing “benchmark game.” So, how do you manage this?

You manage this by meeting your personal financial needs, whether it’s sending a child to college, funding your retirement or allowing for a kitchen or bathroom remodel. If we can grow the portfolio at a sustainable rate of return, send money each year for your living expenses and navigate the ever-changing market, we feel like we’ve done well. If we can help you maintain your standard of living during your retirement years, we feel like we’ve done well.

Rather than focusing on the market as a whole, focus on the investments in your portfolio. Everything operates in cycles: market cycles, economic cycles, life cycles, etc. You get the idea. Focus on where your investments are in their respective cycles. The market may be down, but some of your investments may be flat or even up from where you bought them. The flip side is possible too. Remember you invest in a market of stocks, not a stock market. The ultimate goal is to manage to your needs.

This article provided by H. H. “Will” Hardee, AWM of the Hardee Investment Group and a Financial Advisor and Managing Director at RBC Wealth Management in Houston, and was prepared by or in cooperation with RBC Wealth Management. The information included in this article is not intended to be used as the primary basis for making investment decisions nor should it be construed as a recommendation to buy or sell any specific security. RBC Wealth Management does not endorse this organization or publication. Consult your investment professional for additional information and guidance. RBC Wealth Management does not provide tax or legal advice. RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC.