Everything is relative. Ask Einstein. Ask David Hume and Franz Boas. Or just ask your investment advisor.
A benchmark is a way to measure performance. In finance terms, your investment manager will track how they did managing your money against some benchmark. The most common example would be the S&P 500.
So say your portfolio lost 2% during a year, but the S&P 500 lost 10%. Your investment advisor would claim they did a good job. Stocks in general were down, and they did significantly better than the overall market, saving you from losing more money.
However, if the S&P 500 rose 10% for the year and you only gained 8%, it might be time to give your advisor a huffy call. Sure, you made 8%, but you could have made 10% by just buying a vanilla S&P 500 index fund. What are you paying them for?
And what is that mark in the bench anyway? Can everyone please start cleaning their scuffs?
Related or Semi-related Video
Finance: What are lenders?27 Views
finance a la shmoop what are lenders is that a bagel company hmm okay well maybe
it doesn't matter here lenders are the people and institutions
and countries who loan money banks are lenders they loan money for small [woman walks into bank]
business for big business and well everything in between
banks are big lenders they generally focus on large amounts for big
corporations and take their spread then you have savings and loans well they're
smaller more intimate local cousins of the banks and they focus on local loans
like your local flower shop needs 25 grand in credit but lenders also sell a [flowers in a store]
special kind of loan a mortgage for when you want to buy a home and the interest
on mortgages is distinctively tax-deductible your big brother can also
be a lender that hundred bucks he loaned you yeah is not like the hundred that [sister approaches big brother]
grandmama quote loaned you unquote ie Big Brother's long does not just get
naturally forgotten his alone carries interest in newgy penalties when it's [fist appears as sister smiles]
not paid back to lenders it's people who loan money lending loaning got in there
kind of related [sister being nuggied]
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