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It is said that if you know your enemies and know yourself, you will not be imperil in a hundred battles… Sun Tzu

Know your enemies. For many investment funds, S&P 500 index is the most popular choice, even though it may not be the most appropriate choice of benchmarks. Over the last 20 years, S&P 500 outperformed average investors by more than 6%. Concretely, by investing in S&P 500 index over 20 years, one should expect a return of 3.2 times the return you would have achieved as an average investor. And that period includes two major recessions and many crashes around the world!

Asset class returns

But if you still want to beat S&P 500, at the very least, one should know its asset allocation and allocate portfolio differently (decorrelate your investment from S&P 500)  Note that the sector that underperform this year is Materials, and that S&P 500 has very little weighting on it, which make it hard to beat the index. But that is the gift of hindsight.

S&P 500 Sector weightings

Disclaimer: This is not a specific advice on how to invest, but rather a general wisdom I have picked up over the last few years in the financial market.

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