Risk · ASX
Why 'the market's up' can still be a bad day for your portfolio
It's a confusing moment: the news cheerfully reports the ASX finished higher, but your own balance is down. You're not imagining it, and nothing is broken. The index and your portfolio are simply different things.
The index is an average
The ASX 200 is a weighted average of 200 companies. On any given day, some rise and some fall. If the big banks have a strong day, the index can finish green even while half the market is red. If you happen to be tilted toward the red half, you'll be down on a 'good' day.
What to watch instead
- Which forces moved today — banks, miners, rates, energy?
- How exposed am I to the ones that fell?
- Was this a broad move, or just a few giant companies carrying the index?
The index measures the market's day. Only your holdings measure yours.
Once you stop measuring your day by the headline number and start measuring it by your own exposures, these 'confusing' days stop being confusing. They're just the difference between the average and you.
See it on your own portfolio
Find out which of these forces your ASX portfolio is most exposed to — in 60 seconds.
Keep reading
Why your ASX portfolio is probably more concentrated than you think
You can own a dozen Aussie shares and still be making one big bet. Here's why ASX portfolios hide concentration — and how to see it.
The hidden link between your bank shares and your mortgage
Own CBA shares and have a CBA mortgage? You might be more exposed to one part of the economy than you realised. Here's the quiet overlap.
PortLens provides general information only — not personal financial advice. Examples are illustrative. Always do your own research or speak with a licensed adviser before making investment decisions.
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