Benchmark

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The benchmarks for global oil prices—West Texas Intermediate and Brent crude—measure different things and don’t always line up. Columnist Jo Craven McGinty explains what it all means.
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MarketWatch  Jan 21  Comment 
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MarketWatch  Jan 20  Comment 
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MarketWatch  Jan 20  Comment 
The U.S. markets have reached a bull-bear line in the sand defined by technical support at the January low.
Mondo Visione  Jan 19  Comment 
Moscow Exchange as an administrator of the financial benchmarks for the Russian equity, fixed income, FX and money markets has undertaken internal audit procedures and prepared a report in accordance with the IOSCO Principles for Financial...
MarketWatch  Jan 15  Comment 
U.S. benchmark 30-year mortgage rate falls to 3.66%
Benzinga  Jan 15  Comment 
In a report published Thursday, The Benchmark Company analyst Daniel L. Kurnos reiterated a Buy rating on Perion Network Ltd. (NASDAQ: PERI), but lowered the price target from $10.00 to $8.00. In the report, The Benchmark Company noted,...
USAToday.com  Jan 13  Comment 
In another sign of just how volatile the stock market has been early in 2015, the Dow's 280-point gain earlier today completely evaporated a...




 

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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