Is the S&P 500 a good Benchmark?
All investment strategies and funds are compared to a benchmark, but the question is what benchmark should be used?
Typically you try to stay within the same asset class, so if you’re trading bonds you’d use a total bond index as your benchmark. If you’re trading stocks you’d use the S&P 500, or a stock index of a similar market cap or geographical location.
The question is though, when trading volatility products what benchmark do you use? What about option trading? They don’t really have any comparable index or asset classes to stack up against.
In this video I’ll give a few reasons why I just use the S&P 500 for my benchmark across all my strategies including my VTS Tactical Volatility Strategy.
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