According to Carl Richards, financial planner and author of “The One-Page Financial Plan: A Simple Way to Be Smart About Your Money,” the average investor tends to be susceptible to comparing their portfolio, returns, and progress to their peers.
However, he says, measuring yourself against everyone else’s investments won’t make yours any more effective.
People forget something incredibly important when they invest: It doesn’t matter what everyone else is doing.
The only investing goal that matters is yours. But that doesn’t seem to stop us from comparison shopping. When in doubt, return to your one-page plan.
Do your investments still support your “why?” If the answer is “yes,” what everyone else is doing loses some of its urgency.
Even if the answer is “no” and you need to make changes, your neighbour’s portfolio still doesn’t matter. The best investment decisions are about your goals and not anyone else’s.