Pure Benchmarks · Peer Benchmark
What Is a Good Return for My Portfolio?
Every answer you will find to this question is a single number, and every one of them is wrong for somebody. Ten percent a year is the long-run average of a fully invested stock portfolio, which is not what most people hold. Seven percent after inflation is the same figure with a haircut. Both describe a hypothetical investor who never sold, never held cash and never paid a fee. A return is good or bad only relative to the risk it was earned with and to what comparable investors got out of the same market in the same months.
The number depends on what you were holding
A portfolio that is ninety percent fixed income and one that is fully invested in equities are not competing in the same event. In a strong year the conservative portfolio will look poor against any headline figure and may have been managed perfectly. In a drawdown it will look brilliant for the same reason. Judging either against one universal number measures the allocation, which you already chose, rather than anything that happened afterwards.
The period matters more than people expect
The same portfolio can produce very different figures depending on where you start the clock, and calendar year returns are an accident of when the calendar happens to turn. A comparison is only informative when everyone in it faced the same days. That is why a peer comparison has to be run over identical windows rather than against a long-run average collected from a different era.
Contributions are not returns
The most common mistake is reading the balance. If you added money during the year the balance grew for two unrelated reasons, and the deposit is the larger one for most savers in their working years. Performance has to be measured on the money rather than on the total, which means weighting each dollar by how long it was actually invested.
What a comparable investor actually tells you
The useful question is not whether you hit a target. It is whether your result was ordinary, unusual or poor for someone holding roughly what you hold. Pure Benchmarks sorts every connected portfolio into one of nine standardized risk categories and ranks inside the category, so the comparison holds the allocation roughly constant and lets the remaining difference come from decisions, costs and timing.
When a good return is still the wrong question
A strong result in a rising market says less than it feels like it does, because almost everything rose. The informative moments are the flat and falling ones, where the spread between investors in the same risk category widens and the difference is mostly behaviour. If you only ever check in good years, you are sampling the period where the comparison carries the least information.
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See Your Free Benchmark ReportFrequently asked questions
What is a good annual return on a portfolio?
There is no single figure that applies to everyone. A fully invested equity portfolio and a conservative income portfolio should not be judged against the same number. The informative version of the question is whether your return was ordinary, unusual or poor for someone holding a similar risk mix over the same months.
Is 7 percent a year a good return?
It is a commonly quoted long-run average for a fully invested stock portfolio after inflation. As a target for a specific year it is close to meaningless, because a single year is dominated by what the market did and by how much risk you were taking, neither of which the average describes.
Should I compare my return to the S&P 500?
Only if you hold something close to the S&P 500. For a mixed portfolio the index comparison mostly measures how much of your money was not in equities, which is a decision you made deliberately. A risk-matched comparison answers the question the index cannot.
How do I calculate my actual portfolio return?
Measure the return on the money rather than the change in the balance, weighting each contribution and withdrawal by the time it was invested. Reading the balance alone credits your deposits to your investing skill, which flatters most people in their saving years and penalises retirees drawing down.
What counts as underperforming?
Sitting persistently below the middle of a group of real investors in the same risk category over the same period, rather than falling short of a round number. A single quarter is noise. A repeated pattern across market conditions is a signal worth acting on.
Keep exploring
- How Do You Know If Your Portfolio Is Doing Well?
- Is the S&P 500 the Right Benchmark for Your Portfolio?
- What Is a Peer Benchmark in Investing?
- Compare Your Portfolio to Real Investors, Not an Index
- Why Is My Portfolio Underperforming?
See how portfolios at a specific firm rank against real investors everywhere else:
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This page is an information baseline for comparison only. It is not investment advice and not a recommendation to buy, sell, replace, or transfer any specific asset, account, or firm. Past performance does not guarantee future results. All figures shown are illustrative.