When I first became a financial advisor in 1984, helping people prepare for retirement, the only companies I knew of that had their own research were the big Wall Street firms. What they did was a mystery to me because their stockbrokers kept selling their clients stock from companies I’d never heard of. Turned out those big companies would underwrite a new company’s stock, then give their stockbrokers a quota of how much of it to sell.
My research back then consisted of the annual Mutual Funds issue of Forbes magazine. I could see what the return was for all the mutual funds in that one magazine. The next year I’d buy another one.
With the advent of the internet, today one can find enough research to read non-stop 24 hours a day. I get unsolicited research by email every day. There’s only one problem. Virtually all of it comes with some sort of agenda. Like the research from the big firms of old, most modern internet financial research will tilt their viewpoint a certain way to get the reader to go in that direction.
To make sure that doesn’t happen to us, we don’t rely on free information, we buy our research from unbiased sources. The companies we use push no products except for the reports themselves. They know they must maintain their reputation as a fair reporter of the facts or we will stop buying their product. So when we get their daily research in, we determine if we need to make any changes to our managed portfolios. If so, we do it immediately.
Many investors and financial planners alike study the past performance of an investment to determine whether or not to invest in it. Our research reveals the trends of the market and the relative strength of the different sectors of the market.
Wayne Gretzky, the great hockey player, is quoted as saying, “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.” With proper research we can better tell where the market may go, thus positioning our portfolios to take long-term advantage of those moves.