Quote:
Originally Posted by Slava
I think people need to be careful with that kind of comparison though. It depends on your risk tolerance, and risk-adjusted return, not purely “did you beat the market?”
I also think that in Canada we have a somewhat unique challenge in that regard. Specifically, which market? Is the goal to beat the TSX?
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I've never managed other people's money except as a trader for extremely sophisticated clients. But every time I did so we discussed what the benchmark was in advance. I've turned down someone who wanted a low volatility merger arb strategy that wanted to benchmark it to the S&P500, because that's completely unreasonable.
If the manager and a client aren't using the same benchmark that seems 100% likely to result in conflict/disappointment.