Impact of analysts' recommendations on stock exchange

Nowadays, almost all of us are somehow dependent on the performance of the stock exchange. Some directly invest in stocks, others do it via investment funds and almost all of us invest indirectly through pension funds. The ones that were directly investing on the stock exchange know how many different factors influence its performance. It is usually difficult and time consuming to analyze them in order to assess the current situation and predict the future performance. A certain support might be found in recommendations and reports issued by professional analysts working for brokerage houses. They can be found on universal financial websites, in newspapers and on brokers' pages. A typical recommendation includes the target price, the horizon within which it should be reached and the recommendation deduced from them (whether to buy, sell or keep). The question is how accurate these recommendations are and do investors really follow this type of hints.

Autorentext

Piotr Kruszynski - Technical University of Lodz graduate.