Blog Post - Benchmarking: The Art of the Science
« on: February 01, 2020, 09:15:47 AM »
As found in the Merriam Webster dictionary the term “benchmark” has the following definitions:

> a mark on a permanent object indicating elevation and serving a reference in topographic surveys and tidal observations.

> a point of reference from which measurements may be made.

These definitions clearly suggest that a benchmark serves as a point of reference. The real key here—in the world of investments—is selecting a performance benchmark that is similar to the portfolio being measured against it. This often does not happen, which is why performance benchmarking so often is sheer lunacy.