Today we have the phenomenon where the logic of benchmarking has run rampant. As the consultants have failed to add value in most every other area, they now seem obsessed with benchmarks and doing statistical analysis to uncover "sources of return" and "deviations from the benchmark". More and more I question the wisdom of this approach. It is clear to me that a large portion of stock valuation is flimflam, hot air, and old fashioned hype. A committee of bureaucrats select a bunch of stocks, then supposedly this is somehow relevant to the individual investor? The problem is it does not consider the "WHY" of things. Is the benchmark hot because of a bubble sector? Irrational investor flows? Then you have the alternative asset benchmarks. Have they ever fully owned up to the survivorship bias issue? The way investors tend to time withdraws/addition of capital so as to assure a loss? I doubt it. The solution for anyone who is willing to think is to ignore benchmarks. A trading strategy needs to make money by independent criteria that are relevant to you, based on your best knowledge and efforts. long term Stock portfolios should be created of the best stocks at the best value you can find in the marketplace, with reasonable diversification to account for error. Ignore the hype stocks or leave them for your short term trading account. Benchmarking obsession: Another layer of "follow the other guy" hindsight bias created by the consultant industry so they can once again charge more fees for hardly doing anything, and absolutely nothing that helps investors. Anyone agree/disagree?