If you manage your own assets, knowing how well you did -- or didn't do -- is crucial to your success. To do this, you need a reliable method to measure yourself. Some of you may discover that it's cheaper, more tax-efficient, to simply index; you may ultimately generate better returns by avoiding stock selection and market-timing altogether.
But before you can make that decision, you need to know, in the immortal words of former NYC mayor Ed Koch, "How'm I doing?"
Last week we reviewed the importance of
Like most people, you think you know what your performance is. But I'll bet you cannot tell me what your returns were for the past one-, five- and 10-year periods. How did you do last month and last quarter? How have you fared relative to the S&P 500, the Russell 2000 or the Dow?If you cannot answer these questions, you know far less about your own performance than you thought you did.