Benchmark

RECENT NEWS
The Economic Times  42 min ago  Comment 
"The RBI is cognizant of these swings and is unlikely to be pushed into action at the August rate review," a DBS research report said.
TechCrunch  Jul 23  Comment 
 Eric Vishria, who was co-founder and CEO of social browsing startup Rockmelt, is joining early Twitter and Uber backer Benchmark. In doing so, he will be joining Matt Cohler, Peter Fenton, Bill Gurley, and Mitch Lasky as the fifth member of the...
Mondo Visione  Jul 22  Comment 
The FSB is publishing today proposals, plans and timelines for the reform and strengthening of existing major interest rate benchmarks and for additional work on the development and introduction of alternative benchmarks. The major interest...
Mondo Visione  Jul 22  Comment 
Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals, has won a competitive process to provide currency benchmarks for three of Africa’s most vibrant and dynamic economies – Kenya, Ghana and...
The Economic Times  Jul 22  Comment 
HK's benchmark index jumped to its highest in nearly 7-1/2 months, helped by stronger Chinese markets on mainland & recent fund inflows which pushed up the blue-chip stocks.
MarketWatch  Jul 21  Comment 
U.S. stock benchmarks erase nearly all of Monday declines
The Hindu Business Line  Jul 17  Comment 
It has been pitched right against the bestselling Moto G
The Australian  Jul 16  Comment 
THE Dow charged to another record close, bolstered by upbeat corporate news and confidence that the Fed will keep rates low.




 

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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