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Paulin Discusses How to Better Evaluate Mutual Fund Performance With U.S. News

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Account statements, once a simple accounting of investments and their worth, have become a misleading tool of performance evaluation, Tim Paulin, senior vice president of investment research and product management, recently explained to U.S. News & World Report.

It doesn't matter what the S&P 500 did today, or even what an individual portfolio did today, he observed. What ultimately matters to most investors is if they’ll achieve their goals.

The most important benchmark for any investor is the rate of return needed – given their savings rate, time horizon and goals – that gives them the highest probability of achieving those goals.

“Instead of looking at if your portfolio’s performance puts you above or below some broad-based index's return, examine if it puts you above or below the return you need to reach your goals, then ask yourself what you're going to do about the answer.”

Financial statements are great at highlighting the fees you're paying, he asserted. “It's fair to ask: ‘What am I paying for this?’ and ‘What is the value of the advice I'm getting for the fees I'm being charged?’”

Download "How to Better Evaluate Your ETF or Mutual Fund Portfolio's Performance" (PDF)


This article is for informational purposes only and should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation to buy, sell or hold any security. There is no guarantee that the information is complete or timely. Past performance is no guarantee of future results. Investing in an index is not possible. Investing involves risk, including the possible loss of principal and fluctuation of value. Please visit touchstoneinvestments.com for performance information current to the most recent month-end.

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