Investors look to broad indexes as benchmarks to help them gauge not only how well the markets are performing, but also how well they, as investors, are performing. For those who own stocks, they look to indexes like the S&P 500, the Dow Jones Industrial Average (DJIA) and the Nasdaq 100 to tell them "where the market is". The values of these indexes are displayed every day by financial media outlets all over the world.
Most investors hope to meet or exceed the returns of these indexes over time. The problem with this expectation is that they immediately put themselves at a disadvantage because they are not comparing apples to apples. Read on to find out how you can use indexes to give your expectations and results a proper framework as you strive to achieve your investing goals.
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