“The market is no benchmark”: a comment

Used properly, benchmarks are essential in achieving long-term investment goals

Paul Kaplan 6 January, 2020 | 1:29AM

Lighthouse

Last month, Sarah Newcomb raised some points regarding the role that benchmarks, especially broad market indexes, should play in long-term investing. In this article, I’d like to comment on some of her points to bring more clarity to this important subject.

Why multi-asset portfolios need indexes
Portfolios designed to meet long-term investment goals, such as retirement, are almost always composed of multiple asset classes. In order to understand the long-term behaviour of each asset separately and together in a portfolio, we must use a set of asset class indexes, each index representing an asset class.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

About Author

Paul Kaplan

Paul Kaplan  Paul Kaplan is Director of Research for Morningstar Canada.

© Copyright 2020 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies