David Dreman: The Problem With Indexes

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Aug 22, 2005
Benchmarks used to gauge your portfolio's performance are severely flawed. Know their drawbacks before judging how you did. Market benchmarks often are misleading. If your portfolio falls short of one of these gauges-indexes from the likes of Standard & Poor's, Frank Russell or Morgan Stanley-it typically appears that your money manager is doing a lousy job. Maybe, maybe not. Before jumping to conclusions, you should look closely at the indexes and recognize their flaws.

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