Financial metrics2 min read
BenchmarkGerman: Benchmark
A benchmark is a reference used to evaluate an investment or strategy, often a financial index.
In plain language
The reference should match the investment’s market, currency and risk. A fair comparison uses the same period and treatment of distributions. Cost differences also need consideration.
Let’s make it concrete
A global equity fund is more meaningfully compared with a suitable global stock index than with a savings-account rate.
Simplified example for illustration.Worth understanding
An unsuitable benchmark can make results look better or worse. Check comparability before drawing conclusions.
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For further learning and reference:
Financial education for orientation. No individual investment, tax or legal advice.
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