The Meaning of the Phrase, Beating the Market Essay -- Beating the Mar

The Meaning of the Phrase, Beating the MarketBeating the market is a difficult phrase to analyze. It fag be used to imply to two different situations1. An investor, portfolio manager, fund, or other investment specialist produces a better return than the market average. The market average can be mensural in many ways (some of which are shady and used to make it look like someone has exceeded market returns), but unremarkably 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 presage here) exceed the percentage return of the chosen benchmark, you have beaten the market - congrats2. A companys earnings, sales or some other valuation metric is first-class to that of other companies in its industry. How do you know when this happens? Well, if a company beats the market by a large amount, the financial news sources are usually pretty good at telling you. However, if you regard to find out for yourself, you need to break out your calculator and request some information from the companies you want to measure. Many financial magazines do this sort of thing regularly for you - theyll have a section with a title like Industry Leaders. We dont suggest you seem on magazines for your investment picks, but these publications may be a good place to start when looking for companies to research. URL http//www.thestreet.com/comment/openbook/1409370.htmlDear Lou, Last Friday fifty-fiftying, you inducted earth-closet C. Bogle, the founder of Vanguard Funds, into the Wall $treet Week with Louis Rukeyser Hall of Fame. You correctly credited Bogle with introducing the first indexed mutual fund at Vanguard in 1975. All also often, Bogle is credited too broadly with introducing the very first index fund. In reality, he was only the first to offer index funds directly to the commonplace public in the form of mutual funds. The idea of the index fund was born in aca demia. Many great minds contributed to the concept, but first among them are ravage M. Markowitz, Merton Miller and William F. Sharpe, who shared the 1990 Nobel Prize in economics for this work. The first commercial index fund was introduced by Wells Fargo Bank in 1971, four old age ahead of Vanguard, under the leadership of John McQuown. It was created for the Samsonite pension funds investment ... ...e efficient. But some markets are more efficient than others. And in markets with substantial pockets of predictability, active investors can strive for outperformance. Peter Bernstein concludes that there is hope for active management the efficient market is a state of nature dreamed up by theoreticians. Neat, elegant, even majestic, it has nothing to do with the real world of uncertainty in which you and I must make decisions every day we are alive. Read on In print Andrew Lo, Market Efficiency Stock Market Behavior in Theory and Practice, two volumes of the most important holds on the subject, including Eugene Famas seminal 1970 review, Paul Samuelsons 1965 article and Fischer Blacks 1986 article Andrew Lo and Craig Mackinlay, A Non-Random Walk Down Wall Street Burton Malkiel, A Random Walk Down Wall Street, a long-time bestseller, first published in 1973 and now in preparation for its seventh edition Online web.mit.edu/krugman/www - Paul Krugmans website www.ssrn.com - website of the Social Science Research Network, which features many important papers in investment, including Eugene Famas Market Efficiency, long-run Returns and Behavioral Finance