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Failed Record Of Wall Street’s “Top” Strategists Documented By Independent Economist

For wealth managers who believe the most prudent path to investment success is broad diversification, periodic rebalancing, and choosing low-expense investments — while relying on the precepts of Modern Portfolio Theory — some good news: a scorecard from an authoritative, independent source documents the failed record of Wall Street’s top ranked strategists at picking the best and worst industry sectors.

Fritz Meyer, whose economic research is distributed by Advisor Products and Advisors4Advisors, has methodically tracked Barron’s annual interviews with Wall Street’s top strategists for over a decade. An article with details about Meyer’s findings will be published tomorrow on websites of advisory firms that license Advisor Products content for clients.

The table below compiled by Meyer, an independent economist, shows the picks and pans of 10 senior strategists from Wall Street largest firms in a Barron’s article from December 19, 2011. It tells a story of failed forecasts.

 

The telecommunications sector, for example, was favored by just two of the 10 strategists in the weekly magazine’s 2012 investment outlook. One strategist suggested avoiding the sector while seven — a majority — voiced no opinion on telecom.

As of mid-August 2012, telecom was the No. 1 performing sector, with a 19% return.  “That’s a big miss,” says Meyer.

“If you think that even the smartest strategists on Wall Street can successfully and systematically pick the right asset classes, you’d be mistaken,” says Meyer, an independent economist with 30 years of experience in the investment world, including a stint as a strategist at one of the nation’s largest mutual fund companies.

Advisor Products provides content about wealth management for clients of investment fiduciaries. Its content platform can be added to any website and includes a social media dashboard enabling advisors to distribute content targeted to high-net-worth individuals to their social networks in less than five minutes a day. AdvisorVault, its secure online file-sharing system, is licensed by more than 400 RIAs and the company provides web development, brochures and creative services to independent advisors.

 

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