Firms publishing accuracy of research predictions

After the so many scandals , investors do not trust their brokerage firms .But, now, thanks in part to the global settlement, and the requirement that research firms publish data on the accuracy of their predictions, the information available to investors is improving.

Merrill Lynch, Morgan Stanley, Goldman Sachs -- these are some of the biggest brokerages on Wall Street. But they are not necessarily the best, when it comes to research. The most accurate research houses over the past four years may surprise you: A.G.Edwards, Standard & Poors, Global Capital Institute, Ford Equity Research and Smith Barney.

Mainly rankings are by Institutional Investor magazine. But it's based on a poll of institutional investors. Now, with the global settlement, brokerages must release analyst performance quarterly, and that allows investors to see for themselves which Wall Street firm is best.

Some experts say that the public will always need analysts and they value the analysts by their performance and name tag . So people just assumed that if they were from a big name shop, that their recommendation should be followed.”But that is not true always . Take, for example, Cisco Systems. The most accurate analysts covering the stock for the past 4 years came from mostly smaller research shops.

A lot of the investment banking firms became overweighted in tech at a time when tech valuations were very high “And as the market collapsed and we saw those valuations coming in fairly dramatically, since we really weren't involved in that area, we didn’t get hurt nearly as bad as a lot of our competitors that had an investment banking oriented background.”

So, its solely the decision of investors whether to follow smaller firms or the bigger firms because after all they want to make money .