When it comes to investing, a Benchmark is a standard against which the performance of a security, mutual fund, or investment manager can be measured. Generally, broad market and market-segment stock and bond indexes are used for this purpose.This is important because it allows investors to see how a particular investment is performing in relation to other investments in the market. For example, if a particular stock is outperforming the benchmark, it's a good sign that the investment is a wise choice. On the other hand, if a security is under performing the benchmark, it may be time to reconsider the investment.Sigma Six black belts are particularly interested in benchmarks, as they are always looking for ways to improve the performance of their portfolios. By constantly monitoring benchmarks, they can ensure that their investments are on track and make adjustments as needed.So, if you're serious about investing, it's important to be aware of benchmarks and how they can be used to measure performance. Keep an eye on the benchmarks that are relevant to your investments and use them to make informed decisions about where to put your money.
