[BeetleB]

I've found that extremely few folks benchmark their active investments with alternatives (e.g. S&P 500). Not only that, they don't even analyze their own investment performance. Most people I know who've bought stock in a particular company have no idea in the long run how well that investment has done, beyond simple things like "Very well" or "decent".

I work in a tech company. And almost everyone I know who works there is continually surprised at the stock price. They're surprised when it goes up when there's no seemingly good reason for it to do so, and they're equally surprised when it goes down.

While some may have the skill to analyze and predict, it's safe to say that most people - tech folks included - do not.

[autokad]

I have done it as a sanity check and so far have beat SPY. Its kinda hard to calculate though. In TD Ameritrade, it doesn't give you that metric for you (that I know if, if you know how please let us know!). I have to look at the day I bought each stock and compare it against the price of SPY the same day.

It's not 100% because I don't compare against SPY the same exact time I bought the stock (too much work) and I don't bother calculating dividends. I just assume I am doing better there since I have a higher yield than SPY.

I do better than the market, but I don't recommend people trying to do so for money. I do it as a hobby, its fun for me. Otherwise a person's time is worth putting elsewhere, except in one area. While a person might not be able to beat the market, by being engaged they are more likely to invest more and avoid fruitless spending.

When someone spends 1000$+ on a handbag, I think gee, I'd rather have a share of google instead

[sgerenser]

The worst part is, even the ones that DO benchmark against the S&P500 or similar are almost always doing it wrong. I have a friend who owns TSLA stock. Of course it has done much better than the S&P over the past several years, so he thinks "it's easy to beat the market, especially if you know a lot about tech." But he's comparing just that ONE investment, not his entire portfolio of other (many failed) investments, weighted by dollars. I know he put a bunch of money on a couple of altcoins and probably several other losing stock picks, but he never talks about any of those other investments.

[arbitrary_name]

More importantly (and what you're kind of alluding to) is the RISK - sure, Tesla is beating the SP500 - but how about a week from now, or a year? He is taking on significantly more risk compared to someone who just holds the SP500 - that's fine if it matches your risk appetite, but most people fail to consider the other side of the risk/return coin.

Likewise, a good understanding of the overall portfolio is key - and not just investments. For example, if you work at Tesla and hold mostly Tesla shares you are running an even higher risk than the average Tesla investor - the risk of you getting laid off is closely tied to Tesla shares tanking - and failing to diversify away that risk can hit many of us very, very hard.