Benchmark

RECENT NEWS
Reuters  Mar 27  Comment 
The cut in income tax paid by national oil giant Saudi Aramco to 50 percent from 85 percent brings the company in line with international benchmarks, chief executive Amin Nasser said in a statement on Monday.
Automotive World  Mar 24  Comment 
To coincide with publication of the Annual Report 2016, the BMW Group has also released its new Sustainable Value Report. In the report, the company provides extensive, transparent information on key sustainability issues and the current status of...
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GAZPROM-BONDS/ (CORRECTED, UPDATE 1):REFILE-UPDATE 1-Gazprom hires banks for sterling benchmark Eurobond
The Hindu Business Line  Mar 19  Comment 
Smart management helps the fund latch on to rallies or cut losses in see-sawing markets
MarketWatch  Mar 17  Comment 
Early Friday gains widen stock benchmarks' weekly advances
The Hindu Business Line  Mar 15  Comment 
The US Federal Reserve today raised the benchmark interest rate a quarter point, noting that inflation is moving closer to the central bank’s two percent target. But in announcing the first move s...
The Hindu Business Line  Mar 14  Comment 
... as indices of developed countries have been subdued on Fed, Brexit worries
MarketWatch  Mar 10  Comment 
U.S. stock benchmarks widen premarket gains in wake of jobs data
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U.S. benchmark mortgage rates jump to highest level of year




 

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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