Stock investment accounts vs. benchmarks

The argument for diversification is that for a given level of risk you get a better return (or the other way around, for a given return you suffer less volatility). So for a true comparison you need to see whether your return/volatility ratio is better, not just return.

My returns (almost entirely index funds) are about the same as the Wilshire 5000 but the fluctuations have been much lower. For example, during the big 2008 crash the S&P was down nearly 40%, I was only down 28%. When the S&P is doing really well I generally lag behind b/c of my exposure to other things. But overall the total return is about the same.