FratFiles

• Save Paper

http://vwww.investopedia.com/ask/answers/03/100903.asp

What does it mean when people say they "beat the market"? How do they know they have done so?

--------------------------------------------------------------------------------

"Beating the market" is a difficult phrase to analyze. It can be used to refer to two different situations:

1. An investor, portfolio manager, fund, or other investment specialist produces a better return than the market average. The market average can be calculated in many ways (some of which are shady and used to make it look like someone has exceeded market returns), but usually a benchmark like the S&P 500 or the Dow Jones Industrial Average index is a good representation of the market average. If your returns (which you can learn how to calculate here) exceed the percentage return of the chosen benchmark, you have beaten the market - congrats!

2. A company's earnings, sales or some other valuation metric is superior to that of other......

View the rest of this paper...

Approximate Word Count: 5255
Approximate Pages: 22 (250 words per double-spaced page)

Similar Essays

1. Beat The Market
   

   Beat The Market. http://vwww.investopedia.com/ask/answers/03/100903.asp
   What does it mean when people say they "beat the market"? ...

2. Capital Market Analysis: A Dicussion On Efficient Market ...
   

   ... trade securities in an attempt to outperform the market.¡¯ (Investor Home nd) There
   are some predict patterns appear to help investors to beat the market. ...

3. The Efficient Market Hypothesis
   

   ... returns from information that is so readily available to many, otherwise everybody
   would be scrutinising past share prices in order to ?beat the market'. ...

4. Analysis Of Emh
   

   ... capital invested. Many investors try not only to make a profitable return
   but also to outperform or beat the market. Efficient market ...

5. Beat The Average Investor’S Returns With The Simplest Investment ...
   

   ... As I’ve mentioned many times in previous posts, trying to consistently
   beat the market for the long term is an elusive quest. ...