The Retirement Corporation of America

Frequently Asked Questions:

Q: What is an "industry benchmark"?

A: A "benchmark" is a standard by which something can be measured or judged that serves as a standard or a basis for evaluation, comparison or reference.

In the financial industry, it is common to hear reference to the SP 500, the Dow, NASDAQ, or Russell 1000 Index.

These are all indices which are comprised of stocks, and together they measure performance through changes in the aggregate market value of the stocks within that index. For performance and comparison reasons, it is very common for us to use one of these indices as a "reference or benchmark".

At RCA we use benchmarks for comparing our client's results against certain asset classes, as well as the portfolio as a whole. For a Balanced Account, as an example, the Common Stock performance is compared to the SP 500 Index and the bonds are compared to the Lehman Aggregate Bond Index.

For a Balanced Account as a whole, we use the appropriate mixture, such as:

60% of the S & P 500
35% of the Lehman Aggregate Bond 5% of the Lehman Treasury Bill 1-3 months

Industry benchmarks are widely used for purposes of comparison in the financial world. At RCA we monitor all of our client investments against such benchmarks every day.

How can I measure portfolio performance?

What is Comfort Stock?

What is Asset Allocation?

What is an "industry benchmark"?

What do the credentials "CFP" mean?

What is the difference between a value stock and a growth stock?

Can I protect a large concentrated position in one stock against severe drops in price?

How do I know if I have enough money to retire?

Whom can I talk to about my tax situation for the year that I retire?