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Measuring Your Investing Success




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This article is from the How to Start an Investment Program tutorial, author unknown.

Measuring Your Investing Success

In college, you knew you had to have a decent grade point average to apply to school. I bet that after every semester, you probably got out the calculator and refigured your g.p.a. to see if you had a 3.68 or a 3.69. The DAT was another measuring stick. Most schools weren't looking for applicants with below average scores. Then, while in school, there were national boards and state boards to pass, and graduation requirements to complete. All were designed to see if you could cut the mustard (along with the perfect three-quarter crown).

In the financial world, there are also standards by which to measure the performance of your investments, but it's not something your broker or your mutual fund company willfully shares. Why? Because investment advisors, stock brokers, and mutual fund managers would rather you didn't know how to grade their performance.

Most often, you will find, it's not in their best interest to tell you. With you in the dark as to what's going on with the money you give them to invest, they can go on earning below average returns and get away with it. To them, the less you know, the less critical you can be. The bottom line, then, is if you don't know a standard to measure the professional money managers by, and can't thereby hold them accountable, you deserve the poor results you may get.

 

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