Your performance benchmark helps you to monitor and verify the performance of your investing program. A benchmark index measures the performance of a group of stocks that pertain to a particular broad category. Some of the popular benchmarks such as the S&P 500 index and the Russell 1000 Index are constructed and maintained by a committee with a view to measuring the performance of the broad stock market.

Some benchmarks are constructed to represent the performance of a particular investing style or process. Popular styles (such as growth or value) tilt the portfolio toward a particular statistical attribute such as the company’s growth record or price-to-book value.

Regardless of the style or index benchmark that you choose, your ambition as an investor is to make better stock selections than the style or index list and outperform the benchmark.

Most professional investors measure performance relative to a target benchmark. Choose a benchmark that best represents your investing preference.  You may review the various Investing Styles or Benchmark Indexes by clicking on these links.

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