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When you’re investing how do you know how well you’ve done? Usually your portfolio results are held up and compared to a benchmark. The term benchmark comes from a practice of land surveyors. They used to cut a mark, called a bench, into a stone so that they could mount their measuring equipment. It has come to mean a standard by which the results of some process are measured and evaluated.
In the investing world benchmarks are usually one or more indices. If you’re investing in large cap, or blue-chip stocks of an industrial nature you may choose the Dow Jones Industrial Average (DJIA) as your benchmark. You would look at the performance of the DJIA over a period and compare your portfolio’s performance over the same period and determine if you came out ahead of your benchmark or if you did worse.
Sometimes the most appropriate benchmark will be some sort of blend of more than one index. In this case it is called a blended benchmark. In what situation would you want a blended benchmark? Well, let’s say you have a portfolio that is 70% invested in US Large Cap stocks and 30% invested in a core bond strategy fund. You’d need to blend the benchmark, something like (.7 * S&P 500) + (.3 * Total Bond Market Index).
How do you select an appropriate benchmark against which to monitor your portfolio performance? First look at the asset classes in which you invest. With the above example, the portfolio was “70/30”, meaning 70% was in equities and 30% was in the bond market. Then look at the characteristics of each asset class. Are you in large cap or small cap stocks? Are they growth or value stocks? These questions will help you approach the proper component indices to use in your blended benchmark. If you’re in doubt you can ask your financial advisor to help you benchmark your portfolio so you can best gauge your performance against the overall markets.
What else can I help you with?
When was LINPACK benchmarks created?
LINPACK benchmarks was created in 1979.
What are benchmarks in math?
The benchmarks in math are like tests to see if you understand and if the teacher teaches it good for you to understand
What are the release dates for Benchmarks - 2012?
Benchmarks - 2012 was released on: USA: 19 August 2012 (Action On Film International Film Festival)
How does rounding to benchmarks help you with fractions?
yes
How can you Estimate the sum or difference using benchmarks?
rounding
What is one website that helps you study for benchmarks?
studyisland.com
What are 4 benchmarks angle measurements?
um is it 60
What are CPU benchmarks and what are they used for?
CPU benchmarks are numbers that are used to measure how well a computer functions. It is not usually the most accurate and not to be used to tell accuracy one hundred percent.
Where can one find a processor benchmarks chart?
One of the easiest places to find processor benchmarks charts for your computer would be online. One such site that offers these is called CPUBenchmarks.
What is r9 280 benchmarks?
It's like a gtx 980
What are Benchmarks of government for consumers awareness?
Government benchmarks requires companies to disclose what is previously viewed as private information to the consumer. An example is companies selling food that have genetically been modified.
How are exact elevations marked?
Exact elevations are typically marked using benchmarks, which are fixed points with known elevations set by surveyors. These benchmarks are usually made of metal or concrete and have a unique identification. Surveying equipment is used to measure the elevation of a point relative to these benchmarks.
