In my business we use measures of performance standards called benchmarks. Although there are so many, one of the common benchmarks is the S&P 500 index. It is a leading indicator of large-cap U.S equities. There are a bunch of specifics which make it so popular and it just happens to be the one we most often use for our reporting.
Quarterly we run the performance of client accounts. It’s easy to just look at overall growth, noting that an account may have grown by a certain dollar amount or percentage. However, the use of a benchmark shows the increase relative to that of the underlying index. Someone may be thrilled that an account grew 8 to 10% until they realize that the S&P returned 15%. Suddenly that increase may not look so hot. Since this isn’t a lesson in investing, and there is much more that goes into determining a clients asset allocation, the fact remains that standards of comparison impact satisfaction, even when they shouldn’t.
Tonight I thought about the concept of benchmarks, and how someone who did pretty well could come away wishing he or she just did better. I acknowledged my personal benchmarks that I compare my own performance to. Although I know its never a healthy thing to do, sometimes the irresistible pull of comparison overtakes me. There are even times when data just streams in via a conversation where someone offers up information about someone else that I simply don’t need or want to know, ultimately leading to the comparison trap yet again.
There will always be someone doing, looking, acting, earning, performing, and living what we perceive to be “better” than we do. Similarly, there is always someone doing things worse than we are. In either case the effects are draining and erroneous leaving us to feel either inadequate or superior to another human being. Neither of which do anything to assist us in evolving into our most authentic, uniquely beautiful selves.
Like the portfolios we manage, nuances matter. Someone can’t expect to return 15% without assuming more risk, being exposed to mostly equities and having little downside protection to hedge against market pullbacks. Looking strictly at the benchmark for earnings is no better than glancing at the cover of Vogue right before you leave the house. All at once you long for an airbrush machine and an extreme makeover. Let’s face it, we live in a comparative, analytical world. What we compare ourselves to is often skewed creating disillusionment.
What we need is a better benchmark.
For me personally, staying grounded in my faith helps me to anchor myself when the turbulence around me becomes too much. Knowing that I have a wonderful God who loves me, imperfections and all, helps to bring me back to Center. It enables me to re focus on running my own race when I start looking around at everyone else and judging myself in relation to them. A pastor I listen to poses the question “What if I miss God?” “He will find you.” she quips. I find humor and relief in that phrase, and it’s something I choose to believe in. I understand that not everyone feels the same way.
We could choose to tether our well being and performance to our roles as parents, children, spouses, workers or friends, but these are evolving scenarios. As the years go by and purpose or significance changes, we may feel let down, unfulfilled or unsuccessful. Using a moving target as your benchmark may lead to the emotional ups and downs we all try so hard to avoid.
Perhaps the better benchmark is staring at you in the mirror. What if you were simply to compare yourself to the most customized point of reference you could possibly use? Yourself. Are you doing your best each day to do the next right thing? If not, you can try again. You may not think so, but everyday you are evolving and growing. Some quarters may not return the results you hoped to obtain, but its the overall growth that matters, and there is still time for a rally.
If your performance to date feels underwhelming, why not try to implement a few time tested strategies: reframe your mistakes as learning opportunities, your failures as stepping stones and your heartache as strength training for your soul.
Comparison is a lose-lose strategy. There is a plan, a purpose and a uniquely designed destiny for all of us. Like snowflakes and thumbprints we cannot be completely alike. Even identical twins have differentiating factors. Trying to compare yourself to someone else will create a lackluster return on your investment. If you can’t look “up” then look in the mirror, and simply be the best you that you can be. Your race is not a team sport or a competition. It is simply a journey. Embrace it, hills, valleys, bumps and all.