Investment Strategists Fare Poorly


New York, NY – One of the six major research categories we follow here at Integrity Research Associates, LLC is investment strategy research.  While investment strategists come in many different shapes and sizes, most of these firms make macro market calls (as opposed to individual stock selections), including recommendations on an investor’s optimal asset allocation.  Many investment strategists also publish thematic research or ideas.  Based on our taxonomy, close to 60 firms do some form of investment strategy work, whereas between 30 and 40 firms focus on producing this type of research.

Integrity Research Associates is currently in the process of conducting a comprehensive analysis of the major players in the invesment strategy business.  One of the problems we have discovered in evaluating these research providers is the varied approaches taken by the various providers in this group.  Some strategists reach their conclusions based on a macro-economic framework like ISI or BCA.  Others, like Empirical Research and, to some extent Ned Davis, could be considered quantitative in nature.  A few firms base their strategy recommendations on an analysis of central bank or governmental policy like Medley Global Advisors, or the G7 Group.

While this varied analytical approach makes it difficult to compare many of these firms against one another, the team at Integrity Research Associates has developed an analytical model which enables us to evaluate investment strategists within their respective categories.  A few of the factors we use in this analysis includes customer satisfaction, based on client driven ratings of overall product quality, sales support, analytical support, analytical insight, and the value received.  We also evaluate the experience of each firm’s analytical teams, the longevity of their client relationships, the range of services offered, and the overall popularity of their products and services.

One factor that we could not include in our analysis was the performance of various strategists past recommendations.  This is due to the fact that few third-party firms systematically track investment strategy firms and their various recommendations.  Earlier today, Bloomberg published a news article which discussed the rather mediocre performance of a number of investment strategists who work for large global investment banks.  It seems that most of these strategists have been a little too optimistic in recent months.  Refer to the following link for the complete Bloomberg article.



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