Financial Poise


  • March 17, 2023
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A metric used in measuring investment and portfolio performance, alpha refers to the excess returns delivered over an established benchmark. These benchmarks may range from an index like the S&P 500 or a model portfolio like a 60/40 allocation to stocks and bonds. Alpha is most relevant in conversations about actively managed indices or funds, where the ongoing application of systems and expertise in making allocation decisions is marketed as the reason to expect outperformance.