Investing and comparing portfolio performance to benchmarks like the S&P 500 has become crucial. A recent case highlighted a couple whose portfolio returns had notably lagged behind the performance of such indices, showing a 3-year annualized return of 4.25% and a 5-year return of 8.42%. Suggestions from the community included reassessing their risk tolerance and exploring index funds that have consistently outperformed traditional portfolios. The importance of opportunity costs and potential gains from higher-performance benchmarks were emphasized in the discourse.
"It’s no longer just about generating a positive return. You also have to beat the market to justify investing on your own instead of buying index funds."
"The couple should assess their returns and fees, but it’s also important to keep their risk tolerance in mind."
"Framing the conversation around opportunity cost and what their portfolio would have looked like with those funds can lead to the parents making changes."
"These indices have delivered annualized 10%+ returns for several years, especially in recent times."
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