Abstract
Examination of performance over 1993–2002 indicates that average quarterly and cumulative returns of stocks recommended by brokerage firms are slightly below the returns of the S&P 500. And recommended stock returns are more volatile. Stocks recommended by top-tier brokerage firms perform more poorly than those recommended by mid-tier or regional firms. There is considerable variability across recommendations of individual brokerage firms. The stock recommendations of Merrill Lynch and Raymond James show the best results among top-tier and mid-tier or regional brokerage firms. On a risk-adjusted basis, only stocks recommended by three of the ten brokerage firms with a full ten years of data outperformed the S&P 500.
- © 2004 Pageant Media Ltd
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