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Portfolio Benchmarks

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Investors and portfolio managers sometimes use benchmarking as a tool in financial statement analysis. What benchmarks are familiar with in a business or personal life (and not necessarily just finance-related...)?

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First of all define benchmarking, use a few sources, such as text book, and industry manuals, such as APICS dictionary, etc. Always define the terms you are using so you insure your reader understands what you are talking about. Use authoritative sources, publications that are well known and generally trusted as reliable.

benchmarking present participle of bench·mark (Verb)

1. Evaluate or check (something) by comparison with a standard: "we are benchmarking our performance against external criteria".
2. Evaluate or check something in this way: "we continue to benchmark against the competition".



A measurement of the quality of an organization's policies, products, programs, strategies, etc., and their comparison with standard measurements, or similar measurements of its peers.

The objectives of benchmarking are (1) to determine what and where improvements are called for, (2) to analyze how other organizations achieve their high performance levels, and ...

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This solution discusses portfolio benchmarks.

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HPR calculation

Three Stocks: FSLR, SCTY, SPWR.
Benchmark KWT
1a. Calculate the holding period return for each stock from the viewpoint of an investor who purchased them at the closing price on February Monday 10th 2014 and held them until the closing of the market on Wednesday March 12th.
If you had initially invested $10,000 in each of the three stocks, how much would your portfolio be worth at the end of your holding period?
1b. repeat the calculations in 1a. for your benchmark. (Holding period return and ending value of a $10,000 initial investment.)
2. Discuss reasons for the differences in results for 1a. and 1b. In retrospect, was your benchmark a reasonable one? Why or why not?

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