Reuters
S&P 500 Outperforms Wall St. Firms' Stock Picks - Study

Investors taking stock advice from Wall Street analysts between 1993 and 2002 may have been better off just putting their money in the Standard & Poor's 500 Index.

Stocks recommended by Wall Street's major brokerage firms during that period yielded an average compounded quarterly return of 1.99 percent. That compares with a 2.26 percent return for the S&P 500, according to a study by J. Randall Woolridge, a professor at Penn State University's business school.

Merrill Lynch & Co. CSGZn.VX at 2.41 percent.

Lehman Brothers Holdings Inc. LEH.N was at the bottom of the list of 10 firms, with stocks it recommended earning a return of 1 percent.

A $1,000 investment in the S&P 500 would have grown to $2,443.46 over the period, compared with $2,203.49 on average among Wall Street firms and $3,345.92 for Merrill, the study said.

Copyright 2003 Reuters

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Penn State's Smeal College of Business offers highly ranked undergraduate, MBA, executive MBA, Ph.D., and executive education opportunities to more than 5,500 students at all levels. Featuring academic departments of accounting, finance, marketing, insurance and real estate, management, and supply chain and information systems, the college is also home to major research centers such as the Center for Supply Chain Research, the Institute for the Study of Business Markets, the eBusiness Research Center, the Farrell Center for Corporate Innovation and Entrepreneurship, the Center for Global Business Studies, and the Center for the Management of Technological and Organizational Change.

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