Benchmark
A benchmark is a standard used by investors to evaluate the performance of stocks, commodities, or other securities. Common stock indices like Nifty 50, Sensex, and Nifty Bank serve as benchmarks for assessing the performance of individual stocks or sectors. A bear market, typically linked to poor economic conditions, often results in performance declines across benchmarks.Benchmarks are not only used for evaluating markets or securities but also for assessing the performance of investors or wealth managers. The outcomes of comparing returns to a benchmark are: - Greater than benchmark: The asset is performing excellently (great). - Same as benchmark: The asset is in line with market performance (okay). - Less than benchmark: The asset is underperforming (bad).
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