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Investment Performance
Performance is the action or process of carrying out or accomplishing an action, task or function. The physical form of an investment is the medium or ‘vehicle’ for the performance. The form may not have been designed for the purpose; it may have been adapted, altered, or improved, but no matter the original shape essentially the medium is the store of value.
Often, choice of medium is based on myth, a widely held or false belief or idea. Generally, for example, cash on deposit at a bank or building society is not regarded a positive investment; even though, arguably, cash on deposit is the most secure investment. It is secure, because you can take out (withdraw) your money (almost) immediately; and the capital amount is almost certain to increase, because it is likely interest would be paid on the capital and can left on deposit for compounding (interest paid on interest). Even if the rate of interest were considered derisory, compared with other forms of investment, nevertheless interest would normally be credited on a daily basis, so you can calculate how much your investment is worth at any time.
Although rarely considered a positive investment, cash is the absolute of investment performance. Since the cash remains undiminished, cash on deposit is (relatively) secure, so interest on cash deposits, or the yield on gilt-edged stock (which, as government bonds, are considered secure), is used as the benchmark for other forms of investment.
Often, choice of medium is based on myth, a widely held or false belief or idea. Generally, for example, cash on deposit at a bank or building society is not regarded a positive investment; even though, arguably, cash on deposit is the most secure investment. It is secure, because you can take out (withdraw) your money (almost) immediately; and the capital amount is almost certain to increase, because it is likely interest would be paid on the capital and can left on deposit for compounding (interest paid on interest). Even if the rate of interest were considered derisory, compared with other forms of investment, nevertheless interest would normally be credited on a daily basis, so you can calculate how much your investment is worth at any time.
Although rarely considered a positive investment, cash is the absolute of investment performance. Since the cash remains undiminished, cash on deposit is (relatively) secure, so interest on cash deposits, or the yield on gilt-edged stock (which, as government bonds, are considered secure), is used as the benchmark for other forms of investment.