A benchmark is a reference value against which the performance of an investment or portfolio is compared. It is usually an index that represents a specific market or sector, such as the S&P 500 for U.S. stocks. A benchmark helps investors assess whether their investments are performing better or worse than the market and can serve as a basis for making decisions regarding investment strategies.
- Financial dictionary
Benchmark
Benchmark
Related terms
| Term | Definition |
|---|---|
| Blockchain | Blockchain is a decentralized digital database that stores records of transactions in chronological order. Each block contains transaction details, a timestamp, and a link to the previous block, creating a secure and immutable chain. Blockchain technology is the foundation of cryptocurrencies like Bitcoin but is also used in other areas where transparency, security, and immutability of data are needed, such as financial services, supply chains, and healthcare. |
| Brick & mortar | Brick & mortar refers to traditional physical stores or businesses that have premises where customers can shop or use services in person. This term is used to distinguish them from online stores (e-commerce), which operate exclusively on the internet. Brick & mortar businesses often integrate digital channels to reach a broader audience and offer customers the option to shop according to their preferences. |
| Bull market | A bull market is a period when the prices of financial assets, particularly stocks, rise by 20% or more from their previous lows. This growth is often accompanied by positive investor sentiment, optimism, and improving economic conditions. A bull market can last from several months to years and may be associated with a period of economic growth and low unemployment. |
| CAGR | CAGR (Compound Annual Growth Rate) shows the average annual return on an investment over a specific period, assuming this return was evenly distributed across each year. It is a useful tool for comparing the performance of different investments or projects, as it takes into account the effect of compound interest. It helps both investment professionals and individuals understand how their investments have developed over time. |
| Cash Flow | Cash flow is an indicator that tracks the movement of cash into and out of a company over a specific period. It reflects the company's ability to generate cash to cover expenses, repay debts, or make investments. It is divided into operating, investing, and financing cash flow, with each reflecting cash flows from specific areas of the company's activities. |