InvestorQ : How do I compare and benchmark my investments? Should I do it against the Nifty returns or the Sensex returns?
shrinidhi Rajan made post

How do I compare and benchmark my investments? Should I do it against the Nifty returns or the Sensex returns?

Answer
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TSH answered.
1 year ago


At the end of the day, the long term is nothing but a compilation of a series of short term performances. Long term does not mean that you put money and forget about it. It is very critical that your portfolio is at least at par with the index and occasionally better than the benchmark indices. If you are at par with the indices for too long, there is something wrong with your portfolio. You are just doing as good as an index fund so there is no value addition from your side in terms of strategy. An index fund could have done this job as effectively, then why the risk of equities? If your portfolio is consistently underperforming the index do a rigorous review of the laggards and understand why the stock price is not reflecting your fundamental beliefs. Occasional underperformance is part of the game in a long term portfolio. But if your portfolio is lagging continuously, then alarm bells must start ringing. You must move in quickly to identify the core of the problem and try to look at measures to overcome the same.