Benchmark

RECENT NEWS
MarketWatch  Dec 8  Comment 
Five major stock-index benchmarks finished at records on the same day—something that hasn’t happened in more than 18 years, according to Dow Jones data.
The Economic Times  Dec 8  Comment 
R S Sharma said call failure rates are "way above the benchmark", and added that TRAI will continue to consider it "unsatisfactory and violative" if benchmarks are not met.
MarketWatch  Dec 8  Comment 
U.S. stock benchmarks set aside early declines to post narrow gains
MarketWatch  Dec 7  Comment 
Pan-European stock benchmark closes at highest level since September
Automotive World  Dec 7  Comment 
Michael Nash takes a look at the numerous benefits of using high tensile steels in vehicle design The post High tensile steels could set new benchmark in performance and safety appeared first on Automotive World.
Mondo Visione  Dec 5  Comment 
FESE supports working with ESMA to construct a workable regime for benchmarks provided by trading venues. FESE’s response to the ESMA consultation on technical standards for the Benchmark Regulation focuses on the main following areas: the...
Automotive World  Dec 5  Comment 
iTAC Software AG, which is part of Dürr, is one of Germany’s leading providers of Industry 4.0 platforms. This has been confirmed by the latest “Industry 4.0 /IoT Vendor Benchmark 2017″ study conducted by the Experton Group. The IT research...
Mondo Visione  Nov 21  Comment 
Thomson Reuters announced today that it was selected as benchmark administrator and calculation agent for the Saudi Arabian Interbank Offer Rate (SAIBOR). The appointment is part of an agreement with the Saudi Arabian banking industry. The...
The Economic Times  Nov 17  Comment 
The banking system is collectively surplus by Rs 1.8 lakh crore on Tuesday, and is estimated to have touched close to Rs 3 lakh crore on Wednesday, dealers said.




 

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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