‘The Market’ Isn’t Your Portfolio

Ever been to a family reunion and thought, “I can’t possibly be related to these people?”

You may look like them, but you know you’re different. Yet, if a stranger walked by, they’d assume you’re all cut from the same cloth.

That, in a nutshell, is how investors often relate to ‘the market’.

People see headlines about how ‘the market’ is soaring or slumping, then look at their own portfolios and think, “Why doesn’t mine move the same way?”

The answer: because your portfolio is not the market.

And that’s by design.

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The Market Is a Benchmark, Not a Blueprint

When people talk about ‘the market’, they’re usually referring to stock indexes like the S&P 500, collections of large U.S. companies designed to represent the overall stock market. But few investors, especially retirees, actually own just the market.

Your portfolio isn’t built for headlines; it’s built for your goals.

It’s designed to:

Provide dependable income.
Manage risk and volatility.
Preserve what you’ve already earned.
Last for the rest of your life.

That means your mix of investments: stocks, bonds, cash, maybe even annuities looks and behaves differently from an all-stock index. And that’s a good thing.

The 60/40 Example (and Why It Exists)

Imagine a couple entering retirement. Their goal isn’t to double their money, it’s to make their money last. To strike a balance between growth and safety, they might hold a portfolio of 60% stocks and 40% bonds.

That combination provides a ‘sweet spot’: enough exposure to growth to keep up with inflation, but enough stability to protect income during market downturns.

So, when ‘the market’, which is 100% stocks, goes up 20%, their portfolio might only go up 12%. But when ‘the market’ drops 20%, their portfolio might fall just 8%.

That’s not failure. That’s success. It means the plan is working exactly as intended.

Now, someone who’s 30 years old and investing for retirement 40 years from now might have a 100% stock portfolio. Their timeline allows them to weather the rollercoaster. But for retirees who rely on their portfolios for income today, that kind of volatility could be devastating.

Comparing your portfolio to ‘the market’ is like comparing your retirement plan to a teenager’s TikTok portfolio; they’re built for completely different timelines and tolerances.

Emotion Is the Enemy of Strategy

When markets rise, investors are tempted by greed: “I should be making more.”
When markets fall, they’re overtaken by fear: “I can’t afford to lose.”

We all feel these emotions because they’re wired into us. The key is recognizing them before they drive bad decisions.

That’s why having a well-constructed portfolio is so important. It allows you to navigate both greed and fear with a steady hand.

A few reminders can help:

Stay focused on your goals, not the headlines. The media thrives on excitement; your retirement plan thrives on calm.
Measure progress by purpose, not performance. If your portfolio is funding your lifestyle, protecting your assets, and keeping you on track, it’s doing its job.
Avoid “apples-to-oranges” comparisons. The market is infinite; your time horizon is not. Your money has a job to do, and that job is personal.

When You Look Like the Market (But Aren’t It)

Here’s the irony: your portfolio might resemble the market in some ways, just like you might resemble your family. But resemblance isn’t sameness.

A well-designed portfolio shares certain traits with the market (diversification, growth potential, exposure to different sectors), but it’s uniquely engineered for your goals, risk tolerance, and time horizon.

It’s built to help you sleep well at night, not to win bragging rights at the next family barbecue.

Resemblance Doesn’t Equal Identity

The next time you hear someone say, “The market was up 15% this year,” remember: that’s the market’s story, not yours.

Your portfolio’s purpose isn’t to mirror the market, it’s to fund your retirement dreams with as little drama as possible. In investing, as in family reunions, resemblance doesn’t equal identity. And in both cases, that’s probably a blessing.