How well do financial experts perform? A review of empirical research on performance of analysts, day-traders, forecasters, fund managers, investors, and stockbrokers

Abstract

In this manuscript, empirical research on performance of various types of financial experts is reviewed. Financial experts are used as the umbrella term for financial analysts, stockbrokers, money managers, investors, and day-traders etc. The goal of the review is to find out about the abilities of financial experts to produce accurate forecasts, to issue profitable stock recommendations, as well as to make successful investments and trades. On the whole, the reviewed studies show discouraging tendencies of the alleged excellence of financial experts.Behavioral finance; Expert judgment; Financial psychology; Forecasting; Investment; Trading; Performance