But I stress the need for DIY investors to understand performance and to compare against a benchmark. Well, Schwab has put it all together, including benchmark comparisons. Your broker may have a similar freebie online. It is why I urge people to check out all the tools at their broker's site and putter around a bit.
Let's see how easy it is with Schwab to get performance info.
In previous posts, I showed how to check out Schwab's models. Getting a model, i.e. deciding on an asset allocation, is where investors should put their effort. They should select a model that fits their risk profile, i.e. one they can pretty much stick with through thick and thin. Many would agree that the biggest mistake many investors made over the past few years was bailing out in the downturn and not participating in the recovery.
The model you pick is important for another reason - it will be your benchmark. It will be the ruler you measure performance against to ensure you are staying in line with the market (or "beating the market" if that's your goal).
|Source: Schwab CLICK TO ENLARGE|
|Source:Schwab CLICK TO ENLARGE|
Notice performance for the portfolio is over various periods. You can set the periods however you want. At the bottom is the return on the benchmark. In this case, the benchmark was Schwab's "moderately conservative" model.
A footnote immediately below the table specifies the benchmark as "Moderately Conservative was composed of 50% Barclays Capital Aggregate Bond (Fixed Income), 5% Russell 2000 (Small Cap Equity), 25% S&P 500 (Large Cap Equity), 10% MSCI EAFE (International Equity), 10% Citigroup 3 month US T Bill (Cash Investments)."
This, again, is one of those situations where it takes considerably longer to explain than to do. At the end of the quarter, when you are reading financial news and it talks about the markets, you can, in a few minutes, go online and see your performance.
It goes without saying that this only touches on what the investor can do with this app. For example, there is a nice graph below the table after you have run the report that shows the progress of the account.
It is my understanding that this may not have been made available to all Schwab clients and it may be in the latter stages of testing. If you have it, again, play around with it. It may be exactly what you are looking for. If you don't have it, make a phone call and request it.
Finally, the DIY investor is getting to the point where he or she has necessary tools to manage investments without it costing an arm and a leg.
I am not affiliated with Schwab and present this for informational purposes only.
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