Warning: The beginning of the year is especially the time to be on your guard against advisers who manipulate the data to make their track records look better than they are in reality.

Indeed, right now, almost every adviser’s spin doctor is fast and furiously working to see how he or she can make it appear as though the adviser beat the stock market -- not only last year, but over the last 3 and 5 years as well.

But, to state the obvious, we do not live in a Lake Wobegon world in which all advisers are above average.

Unfortunately, the spin doctors have a surprisingly easy job, given the proliferation of stock market indices available to be used as benchmarks.

At one end of the spectrum, consider the Dow Jones Industrial Average (TICKER:$INDU), which lost 0.6 percent during 2005. Because it was one of the poorer-performing market averages last year, it was relatively easy to beat. Indeed, of the 176 investment newsletters for which the Hulbert Financial Digest has performance data for 2005, 142 did better than the DJIA. Using this index as the benchmark, more than 80 percent of the newsletters beat the market last year.

In contrast, consider the Dow Jones Wilshire U.S. Mid-Cap Growth index, which produced a total return last year of 16.7 percent. Only 14 percent of the HFD-monitored newsletters beat this benchmark.

Therefore, you can bet good money that a lot more advisers will be comparing their 2005 returns to the DJIA than to the DJ Wilshire Mid-Cap Growth index.

And, because almost all advisers have recommended at least some stocks from each of the style categories, they can at least superficially justify the choice of virtually any of the benchmarks.

It’s a situation that would make even Karl Rove blush.

By the way, last year’s split market is not unique. Consider how various benchmarks have performed since March 24, 2000. That’s the date when the combined value of all U.S. stocks reached their high water mark (as judged by the Dow Jones Wilshire 5000 index [TICKER:DWC]). If we had to pick a single date for the “top of the market”, this would be it.

Since then, some sectors of the market -- small-cap value, in particular -- have produced double-digit annual returns, while others -- notably large-cap growth -- are still well behind where they stood on March 24, 2000.

This means that, just as is the case for 2005’s returns, the spin doctors can paint markedly different pictures of newsletters’ returns over this longer period as well. For example, of the 113 services for which the HFD has data since March 2000, only 5 beat the Dow Jones Wilshire U.S. Small-Cap Value index. Yet, 99 of them beat the corresponding benchmarks pegged to large-cap growth.

I wish there were an easy solution to the problem, but there is no perfect benchmark. Few, if any, advisers fit effortlessly into any of the style pigeonholes, for example. Furthermore, many advisers shift their focus over time -- a phenomenon referred to as style drift.

It will probably never be possible to fully and correctly asses an adviser’s performance by reducing it to a simple comparison with just one benchmark. At best, such simple comparisons should be the beginning of your evaluation process, not the end.

Mark can be contacted via email at mhulbert@marketwatch.com.