Benchmark

RECENT NEWS
The Hindu Business Line  Jan 14  Comment 
Term finance lender IFCI today reduced its benchmark lending rate by 0.75 percentage point in line with market competition. The company has reduced benchmark lending rate from 11.50 per cent to 10...
SeekingAlpha  Jan 12  Comment 
Financial Times  Jan 5  Comment 
US growth funds had worst performance last year but value funds fared better
MarketWatch  Jan 5  Comment 
U.S. benchmark mortgage rates tumble
MarketWatch  Jan 4  Comment 
Borrowing benchmark tops 1% for first time since 2009
SeekingAlpha  Dec 29  Comment 
MarketWatch  Dec 29  Comment 
London benchmark FTSE 100 erases intraday loss to notch all-time high
The Economic Times  Dec 29  Comment 
All NPS managers are well-known fund managers and therefore beating the benchmark index by them is be a big deal.
The Economic Times  Dec 22  Comment 
Since 2012, Sebi made it mandatory for fund houses to declare a benchmark index. This benchmark is independent and is based on the objectives of your fund.
Yahoo  Dec 21  Comment 
Goldman Sachs Group Inc (GS.N) will pay a $120 million penalty to resolve civil charges that it attempted to manipulate a global benchmark for interest rate products known on Wall Street as "ISDAFIX," U.S. derivatives regulators said Wednesday....




 

Benchmark

A benchmark is a proxy for a market, economy, class of equity, or sector, generally setting a standard against which the performance of a stock, bond, mutual fund, commodity, or other security is measured.

Benchmarks are also used to gauge the health of a market, sector, or entire economy.

Examples

  • The S&P 500 (.SPX-E) and Dow Jones Industrial Average (.DJIA) are often used as benchmarks for the United States economy in general. That is to say, their performance is used both to gauge the health of the economy and as a reference of comparison for the performance of a stock portfolio or mutual fund.

Benchmark

A real benchmark |ˈbɛntʃˌmɑrk| is an unmovable surveyor's mark cut concrete or stone, and used as a reference point in measuring altitudes. There is no such thing as a floating benchmark. [1]

From an investors view, cash is used as a benchmark to gauge the returns on there principal, and governments use cash as a benchmark to levy there taxes on.

Wall Street uses benchmarks that they make up themselves to justify their fees. [1] Generally, the earnings multiple for the market as a whole is a helpful benchmark. [2] Benchmarks are a smokescreen used by Wall Street to distract investors from gauging their investment returns against cash. Comparisons are fraught with peril, because a fund can look unjustifiably good or bad if it is compared with the wrong index. [3] Investors are concerned with absolute, not relative risk and return. Minimizing risk is about diversification. [4]

From "surveyor's point of reference," 1838, [2]

References

  1. Wall Street words: an A to Z guide to investment terms for today's investor By David Logan Scott ISBN-10: 0618176519 pg364,<ref> The fee increases or decreases proportionately with the investment performance for the fund compared to the index. <ref>Mutual Funds: An Introduction to the Core Concepts by Dr. Mark Mobius ISBN-10: 0470821434 Chapter 1</li> <li id="_note-1">[[#_ref-1|↑]] A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing By Burton Gordon Malkiel ISBN-10: 0393062457 pg122</li> <li id="_note-2">[[#_ref-2|↑]] Mark Hulbert, New York Times, January 8, 2006</li> <li id="_note-3">[[#_ref-3|↑]] Dean LeBaron's Treasury of Investment Wisdom: 30 Great Investing Minds by Dean LeBaron and Romesh Vaitilingam ISBN-10: 0471152943 pg118</li></ol></ref>

See Also

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