Opinion: How is your portfolio doing?

Myles Jackson

One of the most common questions we hear is, “How is my portfolio doing?” While it may seem like a straightforward question, evaluating a portfolio can be difficult. To truly understand how your investments are performing, you must consider the context of your overall strategy.

Many investors, even professionals, lack a well-defined and intentional strategy. Instead, they react to short-term market swings. Without a structured investment approach, investors tend to make emotional decisions about their portfolio. Sticking to a disciplined strategy, rather than chasing market trends, can lead to more consistent long-term results.

The composition of your portfolio dictates how it should be evaluated. Are you invested in index funds or actively managed funds? Do you hold a mix of individual stocks? Or have you opted for alternative assets, like gold or Bitcoin? Each asset class carries its own risk profile and behaves differently.

Performance is best assessed on a relative basis. In the investing world, this means comparing your portfolio to an appropriate benchmark. Without a relevant point of reference, it becomes difficult to determine whether your portfolio is underperforming or outperforming. Many investors benchmark their portfolio to the S&P 500, an index of the 500 largest companies in the United States.

The S&P 500 has been on a historic run for more than a decade. Throughout 2024, the index marched higher, frequently hitting new all-time marks. It was easy to be excited about how the market (and your portfolio) performed. Now, in the early part of 2025, the same 500 stocks are trying to find their footing.

Artificial intelligence continues to drive significant shifts across multiple industries. While some companies benefit from this technological revolution, others struggle to keep pace. Inflationary pressures remain a key concern, as rising costs impact both businesses and consumers. The Federal Reserve’s interest rate decisions further influence investor sentiment, with higher rates putting pressure on growth stocks while potentially benefiting fixed-income investments.

Meanwhile, proposed tariffs and trade policy shifts add another layer of uncertainty, particularly for multinational corporations and sectors reliant on global supply chains. As these themes unfold, market volatility has increased, making it even more important for investors to assess their portfolios within the appropriate context.

While it is useful to stay informed about market trends, the performance of the S&P 500 has little relevance to your personal investment strategy. If your portfolio includes bonds, international equities, or alternative investments, comparing it directly to a 100% stock index (like the S&P 500) could cause more harm than good.

To achieve the return of the S&P 500, you must be fully invested in it – and that means accepting the accompanying risks. A fundamental principle of investing is that higher expected returns come with higher risk and volatility. For many investors, this level of risk is overwhelming. One of the biggest mistakes individuals make is selling in a downturn, locking in losses due to short-term fears. A well-diversified portfolio is designed to manage risk more effectively, helping investors stay the course through market ups and downs.

Rather than comparing apples to oranges by measuring your portfolio against an inappropriate benchmark, focus on whether your investments align with your financial goals and risk tolerance. There is no such thing as perfect – the best portfolio is the one you can confidently stick with, no matter the market conditions.

A portfolio review can offer fresh insights and uncover opportunities you may have overlooked. A second opinion may be the key to maximizing your investment success. Advisers specializing in customized, client-focused strategies can help optimize your investments by reducing costs, improving tax efficiency and ensuring your portfolio remains aligned with your long-term financial objectives.

Myles Jackson is a wealth management adviser and vice president at SignalPoint Asset Management in Springfield. He can be reached at mjackson@signalpointinvest.com.