According to a newly published academic report by Duke University and the University of Geneva, 90% of financial blogger recommendations produce losses over an investment period of 6 and 12 months.
The study also found that there are bloggers who consistently get it right, suggesting that blogger “crowd wisdom” does exist. It determined that TipRanks is the only company that enables investors to identify which bloggers consistently perform well.
The researchers observed 290 fintech companies. These companies give investors access to more information than ever before, including from non-traditional sources. The study set out to determine whether this data can be trusted.
Evaluating Financial Bloggers
To find out the accuracy of financial blogs, the study evaluated millions of relevant articles.
The report states, “it is very challenging to uncover the crowd wisdom without a FinTech investment tool that can identify it”. It continues “Of course, identifying top bloggers is challenging, thus the need for FinTechs like TipRanks which have sought to identify the investment value from top bloggers and other non-traditional sources of data.”
TipRanks’ multi-award-winning Financial Accountability Engine™ identifies the best performing financial bloggers. Investors can see how bloggers are ranked according to their historical success rates and performance. They can follow the bloggers of their choice and see which stocks they are recommending.
TipRanks recently announced which leading financial blogs have provided the best stock recommendations over the past year.
Additionally, a recent article in Bloomberg reports that financial blogger sentiment is outperforming traditional investing strategies.
TipRanks Stock Analysis Tool
The paper also focuses on the TipRanks Smart Score to demonstrate the use of alternative data. It explains how TipRanks uses artificial intelligence to generate a score that indicates a stock’s likelihood to outperform, without human intervention. This high impact and engaging graphic is suitable for investors of any experience level.
The Smart Score is based on TipRanks’ unique datasets. These include analyst ratings, blogger opinions, hedge fund activity, insider transactions, investor sentiment, news sentiment, technical and fundamental indicators.
The paper publishes a screenshot of the Smart Score tool.
About the Study
‘FinTechs and the Market for Financial Analysis’ is by Jillian Grennan, Duke University Fuqua School of Business and Roni Michaely University of Geneva and SFI Geneva Finance Research Institute. The paper was accepted for publication at the Journal of Financial and Quantitative Analysis (JFQA).
You can read FinTechs and the Market for Financial Analysis here.