How do you know if your investment portfolio is performing better (or worse) than the market?
The answer is your investment alpha.
Alpha is a measure of an investment’s performance compared to a benchmark, like a market index.
If your investments are not meeting or exceeding your benchmark(s) over a time period, then you may need to reevaluate your investments and strategy.
As referenced in my book Making Big Money Decisions, investing in underperforming assets generates considerable opportunity costs and suppresses wealth accumulation. Use the content in this post to ensure you’re getting the best return on your invested money.
By reading this post, you will learn why alpha is a key performance indicator for managing your investment portfolio, and how to calculate and use it to optimize your investment strategy.*
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