There’s an old business axiom “You Are What You Measure” and when it comes to investing, there is no shortage of things to measure: returns, risk, alpha, beta, tracking error, and so on. Each has its purpose. Measuring investment performance is frequently a two-part process comprised of measuring returns over a designated time period, and then comparing that performance to something. The first part determines your absolute performance, and the second part determines your relative performance; the first part tells you what you did, the second part tells you if it’s good or bad relative to something else. That second…
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