Not sure your investments are working out the way you hoped? Or, just want to know where you stand? Here are three ways to check your progress.
- Calculate how much you have made so far. Your account statement tells you what your investments are worth today. But, it may not tell you how fast your money is growing each year. That is your rate of return. If your statement does not show your rate of return, ask your adviser for help. Or, to get a quick estimate, use our Rate of Return Calculator. Tip: When you’re investing for goals like your retirement, it’s really important to keep a long-term view of things. If you have invested in stocks or mutual funds, don’t get too concerned about your return from month to month, or even every year. The stock market goes up and down all the time.
- Assess your progress toward your goals. When you bought your investments, you probably had some goal in mind about how much you would make. Our Getting Back on Track Calculator helps you assess how an investment, or your entire portfolio, is performing against your goals. It looks at: * The amount you first invested * The growth you wanted * What your investment is worth today. The calculator will tell you if you're on track or not. If you’re behind, it will tell you what return you need to make to catch up.
- Measure your results against other investments. You may hear or read about various indexes that track the performance of certain types of investments. Some indexes track a group of selected stocks that represent the market in some way. There are indexes for bond markets as well. Example: The S&P/TSX Composite Index tracks how the equity market in Canada is doing. You can compare your returns with those of similar investments in an index. Just be sure to use the right kind of index for the right time period. Talk to your adviser to find out what benchmarks you can use to see how investments like yours are performing.
Remember: Tracking your progress helps you reach your goals.
If you fall behind, you can change your investment approach to try to catch up. Or, you can rethink your plans and priorities based on the results you are seeing. Either way, it’s a great reality check.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.