Within the TLH Spreadsheet is the capability to develop a customized benchmark for any portfolio that uses any combination of the 17 asset classes found in this blog post. If you are new to ITA Wealth Management, note that we pay a lot of attention to asset allocation, even though it has recently fallen out of favor, particularly since the 2008 market crash.
Why build a customized benchmark. I am a strong advocate of proper portfolio tracking. This includes properly benchmarking the portfolio as well as calculating the Sortino and Retirement ratios. Read all the Benchmark blog posts.
To develop a customized benchmark, one needs to hold investments in each of the 17 asset classes. Therefore, buy a few shares of ETFs that represent the asset classes you plan to use in your portfolio. If you will be investing in emerging markets, buy three to five shares of VWO as this will start your IRR reference for this asset class. Do this for all the asset classes so you have the IRR values when you begin to expand the portfolio.
In the TLH Spreadsheets available, check out the formula that is behind the ITA Index IRR calculation. The ITA Index is our customized benchmark for the different portfolios. If anyone needs help, just post your questions in the Comments section of this, or related, blogs.