With stocks tanking today and company earnings plunging, it's an excellent time to review the analyst recommendations for any stocks you might have in your portfolio. We bet they're still telling you to buy more, right?
From the evidence presented at Congressional hearings this week, it is clear Wall Street ratings are biased. Analysts tell you which stocks to buy, but they never tell you when to sell. And their recommendations often are based on potential kickbacks they could get from future business with the recommended company. But can you blame them? If analysts are honest and damage a future working relationship with the rated company, they face being fired.
We hope these hearings make some headway toward protecting investors from these shady practices. Although we doubt they'll have any affect on Wall Street, we hope, by virtue of the hearings themselves, that individual investors will realize that most analyst ratings can't be trusted. Smart investors do their own research.
For our part, we try to counteract biased analyst ratings through our Weiss Risk Ratings. They are designed to tell you which stocks and mutual funds are too risky to buy or own in the first place ... and which ones are relatively safe. We don't accept any compensation whatsoever for our any of the ratings we issue, so there are no conflicts of interest. Unfortunately for you, those on Wall Street can't say the same.
Note: Our subscribers have full access to the Weiss Risk Ratings database. Visitors can register to get three free risk ratings for the stocks or mutual funds of their choice.
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