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1Fix the driver behind crashes, sound loss and screen glitches2Clear out junk files and repair common Windows errors3Scan for outdated or missing drivers - takes under a minuteA portfolio can lose value while a headline index rises because the two may hold different investments, carry different risks, or be measured over different periods. Before changing anything, check that you are comparing like with like, then review your portfolio’s allocation, holdings, fees, and fit with your current plan.
1. Make sure the comparison is fair
“The market” is not a single portfolio. An index is a basket designed to represent a particular market, sector, or part of an economy, and indexes differ in what they include and how they weight their holdings. A portfolio containing bonds, international shares, small-company stocks, or cash may not be expected to move in line with a U.S. large-company stock index. The SEC explains how index construction and index funds vary in its Investor Bulletin: Index Funds.
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Use a benchmark that reflects your portfolio’s stated strategy and the investments it actually holds. FINRA notes that funds are measured against an appropriate market index or benchmark based on their strategy and investments. A benchmark is useful when it represents the same kind of exposure—not simply because it is familiar or appearing in the headlines. See FINRA’s Mutual Funds guidance.
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Also align the measurement period. Compare the same start and end dates, and establish whether each return figure includes income, fees, and account cash flows. Your statement or account provider can clarify how it calculates performance; the figures cannot be meaningfully compared if their calculation bases differ.
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2. Compare your intended allocation with what you own now
Stocks, bonds, cash, and other asset categories can perform differently in the same market environment. A diversified portfolio is meant to spread exposure and reduce the risk of a large loss caused by overemphasis on a particular security or asset class; it is not designed to track every rising stock index. The SEC’s Beginners’ Guide to Asset Allocation, Diversification, and Rebalancing describes how allocation relates to goals, time horizon, and risk tolerance.
Write down the asset mix you chose for your goals, then compare it with your current holdings. Look for meaningful differences in exposure to:
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- Asset classes, such as stocks, bonds, and cash.
- Market segments, such as large- or small-company shares.
- Regions or sectors.
- A single company or other concentrated holding.
A portfolio heavily weighted toward one company, asset class, or segment can diverge sharply from a broad index. FINRA discusses diversification and concentration in its Asset Allocation and Diversification guidance and offers additional considerations for volatile markets in Investor Tips for Turbulent Markets.
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If your portfolio holds mutual funds or exchange-traded funds, check what each fund owns, what index or objective it follows, and what it charges. A fund that tracks an index will not necessarily deliver precisely the index’s return: the SEC’s Index Funds page notes that fees and expenses, trading costs, and tracking error can cause underperformance relative to its index.
Review advisory or service charges, fund expenses, and transaction costs as well. Fees reduce the amount that remains invested. The SEC’s July 23, 2025 Investor Bulletin on How Fees and Expenses Affect Your Investment Portfolio explains the effect of investment costs. If a charge is unclear, ask the financial professional or provider to identify it and explain how it is assessed.
For a fund, its prospectus and latest shareholder report can help you verify its objective, benchmark, risks, fees, and holdings. The SEC says these materials are typically available from the fund company or financial professional and may also be found through EDGAR.
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4. Decide whether anything actually needs to change
A short-term gap between your portfolio and a headline index is not, by itself, evidence that your plan is broken. First ask whether your goals, time horizon, financial circumstances, or comfort with risk have changed. The SEC says the most common reason for changing an asset allocation is a change in time horizon; recent relative performance alone is generally not a reason to switch allocations. See its guide to asset allocation and rebalancing.
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If your actual allocation has drifted from the plan you still want, rebalancing can bring it closer to its intended mix. Consider the costs and tax consequences of selling investments before acting. Depending on your circumstances, directing new contributions toward underweighted categories may also help adjust the mix without selling holdings. FINRA says there is no official rebalancing schedule, though investors may consider reviewing the need annually as part of an investment review; see Asset Allocation and Diversification.
Quick Recap
- Confirm the portfolio and benchmark cover identical dates and use comparable return calculations.
- Choose a benchmark suited to the portfolio’s investment strategy and holdings.
- Compare your current allocation and concentration with the mix you intended.
- Check fund objectives, holdings, benchmark, tracking, expenses, and other charges.
- Reassess your plan and weigh the costs and tax effects before making allocation changes.
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