Seeking Alpha

Investors seek “alpha”.

Alpha is the measure of investment performance over a benchmark.

If your portfolio earned 11% and the benchmark (e.g. S&P 500, MSCI world, PSE All-Shares Index) earned 10%, your portfolio has an alpha of +1. If your portfolio return is 9% and the benchmark return is 10%, your portfolio has an alpha of -1.

If your portfolio has a negative alpha, it might have been better (and cheaper) if you just invested in a portfolio that tracks the benchmark.

This is probably why a very popular investment website is named Seeking Alpha.

http://seekingalpha.com/

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Published by

Finance, M.D.

Finance, M.D. is a practicing physician who dabbles in finance and investment. He has passed all three levels of the Chartered Financial Analyst (CFA) exams, all in his first attempts. thefinancemd.com

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