Benchmark

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Benchmark

The performance of a predetermined set of securities, used for comparison purposes. Such sets may be based on published indexes or may be customized to suit an investment strategy.

Benchmark

A standard against which a security's performance is compared. A benchmark is usually an index of securities of the same or similar class. Stocks are usually compared against stocks; bonds against bonds, etc. Another type of benchmark considers securities according to industry: a telecommunications stock may be compared to other telecommunications stocks. Likewise, mid-cap securities may be benchmarked against other mid-cap securities. Some indices, such as the Dow Jones Industrial Average and the S&P 500, are considered to be benchmarks for the wider economy.

benchmark

A standard by which something is measured. For example, bond yields are generally compared to benchmark yields on U.S. Treasury securities of similar maturity. Mutual fund performance is often compared to changes in the Standard & Poor's 500 Stock Index.

Benchmark.

An investment benchmark is a standard against which the performance of an individual security or group of securities is measured.

For example, the average annual performance of a class of securities over time is a benchmark against which current performance of members of that class and the class itself is measured.

When the benchmark is an index tracking a specific segment of the market, the changing value of the index not only measures the strength or weakness of its segment but is the standard against which the performance of individual investments within the segment are measured.

For example, the Standard & Poor's 500 Index (S&P 500) and the Dow Jones Industrial Average (DJIA) are the most widely followed benchmarks, or indicators, of the US market for large-company stocks and the funds that invest in those stocks.

There are other indexes that serve as benchmarks for both broader and narrower segments of the US equities markets, of international markets, and of other types of investments such as bonds, mutual funds, and commodities.

Individual investors and financial professionals often gauge their market expectations and judge the performance of individual investments or market sectors against the appropriate benchmarks. In a somewhat different way, the changing yield on the 10-year US Treasury bond is considered a benchmark of investor attitudes.

For example, a lower yield is an indication that investors are putting money into bonds, driving up the price, possibly because they expect stock prices to drop. Conversely, a higher yield indicates investors are putting their money elsewhere.

Originally the term benchmark was a surveyor's mark indicating a specific height above sea level.

benchmark

A permanent reference mark,usually set in concrete or iron and used to establish the elevation above sea level or certain corners in a surveying system. All other measurements in the area should be checked for accuracy relative to the nearest benchmark, preferably against several nearby benchmarks to establish redundancy.

References in periodicals archive ?
In the SAP Standard Application Sales and Distribution (SD) Benchmark, it achieved 2,200 two-tier SAP SD Benchmark users with a 16-way server (3)
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While not every company's financial-management practices can be described as following "Best Practices," most companies have an adequate financial-management foundation to develop benchmarks for their operations.
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If you do your planning in August, benchmark from January through July.
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A new medical depot/exchange benchmark is available in the medical services industry.
Also key to the benchmark is the process of reporting a SPC-1 benchmark result, as test sponsors must publicly disclose the price (including three years of service) of the configuration being tested.
Futuremark[R] is known around the world for its benchmark products, including the 3DMark[R] and PCMark[R] Series and SPMark[TM] (with more than 30 million copies distributed worldwide) and value-added services powered by a database of over 13 million real life benchmarking results.
CIS members develop and encourage the widespread use of security configuration benchmarks through a global consensus process involving participants from the public and private sectors.
We rely on it regularly to benchmark how productive our physicians are -- how many patients each is seeing, how much they're billing, what level they're billing at, and even how many bills are actually being paid.