Home / Start Ups / Investors / What does it mean when people say they “beat the market”?

What does it mean when people say they “beat the market”?

This phrase isn’t the most accurate statement in the world of investing because there are so many different markets. Most people will just compare performance to the S&P 500, but if you truly want to understand how well you are doing, it is better to compare the securities (stocks, mutual funds, ETFs) to how they are performing against a benchmark, the index that best represents the same asset class.

For example, if you have an emerging market mutual fund in your IRA, you should compare that fund with an emerging market index. You would not compare an emerging market mutual fund with the S&P 500: They share none of the same stocks, the listed companies frequently contend with different risks and opportunities – and their nations’ economies and political environments can vary widely as well.

Nickolas Strain
Halbert Hargrove Global Advisors, LLC
Long Beach, CA

Source link

About Amy Harvey

Amy R. Harvey writes forStartUps Sections In AmericaRichest.

Check Also

Why Should I Pay Myself First?

The concept of "paying yourself first" is one of the pillars of personal finance and …

Leave a Reply

Your email address will not be published. Required fields are marked *