If an investment manager is a baseball player, then their success or failure in beating (or at least meeting) an index is their batting average. The batting average is essentially determined by taking the number of relevant time intervals (days, months, etc.) in which the manager bested or met the index, and dividing it by the total number of that interval for the period in question, then multiplying by 100.
For those who don't keep up with baseball (or investment management trends), high batting average = good; low batting average = not so good.
Let's say it's October 28, 1910 and an investment manager named Tyrus Cobb wants to see their batting average since the beginning of the year (a period of 300 days). Tyrus (we'll call him "Ty" for short) met or beat the index 110 times. So, our calculation is: (110/300)x100= 36.7. With that kind of average, he should have been a baseball player.
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Finance: What are Investment Objective a...3 Views
Finance allah shmoop what are investment objective and style All
right people we all want to make money right Okay
everyone except that guy Yeah That's everyone's overall investment objective
Scratch a little further and you'll find that everyone's investment
goal or objective is a little different Well some people
want to make a lots of money fast and they
can risk a lot you know because retirement is right
around the corner and they've got a prayer on their
side Some people are okay with making money slow because
they don't feel comfortable taking a lot of risk Some
folks want to make money sure but want to invest
only in quote ethical unquote companies And you got a
whole bunch of other flavors on down the line Well
it's a registered investment advisors job to figure out how
much someone wants to make and how they want to
make that money risk wise with their investments Not knowing
this stuff helps the adviser choose the right options for
their client So what's your investment style Sure you've got
style that would make kanye west weak but what's your
investment style like depends on your personality your investment ideas
And what your goals are and how much you really
can risk and you afford tto lose everything and start
all over if things go bust putting all your money
in whatever dot com well your style might be aggressive
like you go after stock to think a ll rise
and rise fast you know like new i pose and
high growth tech companies and you're comfortable knowing they could
also go bust and you could also be an index
or just kind of passive i eat You're not going
to try to outperform the market you're into long term
growth so you might want to just be the market
by an index fund of the s and p five
hundred Your style might be focused on buying shares in
big companies and holding them for a long time or
brian smaller growth e companies and hoping they take off
but holding them for a long time like not a
lot of trading not a lot of taxes things just
kind of plunk along Well you might be all about
value buying stocks everybody hates when they're on the cover
the wall street journal which is saying this thing is
a dog Then you want to buy it because really
cheap or you might be in a growth like companies
that don't pay a dividend Maybe they don't even have
any earnings like amazon Amazon probably the greatest growth stock
in history barely had any earnings no dividend and it
just grows you know look at that chart that a
beauty Well there are tons of hybrids in between all
of these styles but at the end of the day
it's all about risk and reward and time And for
most people the worst thing they khun dio is stay
high and dry fully out of the investing pool because
over time the markets go up so no your objective
know your style and whatever you do don't make kanye 00:02:37.313 --> [endTime] cry
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