Lately, I’ve been asked a common question: Should we use the S&P 500 as the benchmark?

Before I can answer this question, we need to know what the S&P 500 is.

The S&P 500 is an index that tracks the performance of 500 large U.S. companies. It is built using an algorithm and is the most widely followed benchmark for U.S. equity markets. Importantly, the S&P 500 is not a fund by itself—it’s an index. But through index funds or ETFs, investors can essentially buy into it.

By design, it is passive and focused on U.S. equities. That means it reflects only one market (the U.S. stock market) and only one type of asset (stocks). In recent years, much of its performance has been driven by a handful of companies—especially the large technology firms often referred to as the “Magnificent 7.”

At Harmony, we absolutely recognize the value of the S&P 500. In fact, we use it within portfolios where it makes sense. But it is only one tool among many. Our investment philosophy is built around:

• Diversification. A strong portfolio blends different geographies, industries, and asset classes. The U.S. market is important, but it is not the whole story.

• Balance of passive and active management. We use passive tools like index funds, but we also bring in active strategies to manage risks and capture opportunities.

• Planning first, investing second. The real driver of long-term success is not chasing a single index, but how the entire portfolio is structured to meet your goals.

Relying on the S&P 500 alone is not for the faint of heart. It can be highly volatile, especially when performance is concentrated in a few stocks. For most investors, looking only at this index is not a healthy way to measure financial progress.

So, Should S&P 500 Be the Benchmark?

The answer is: not necessarily. Unless you are an aggressive U.S. equity investor, the S&P 500 is not the right measuring stick for your financial plan.

The real benchmark should be: Are you on track to achieve your goals?

That’s the question we focus on at Harmony. Investment tools matter, but they are always in service of the bigger picture—your financial health and future.

What do you think: what is the right benchmark for success?