Investars

A lot of investors rely on outside research, including the professionals. The challenge from doing that is obvious - you have to keep close tabs on those who provide the research so you make sure that you're listening to the right people. I've always preferred focusing my time and energy tracking the stocks and sectors themselves, rather than the people who research them, but to each their own.

Giving the number of research reports many of these firms provide, it's always helpful to have another firm who monitors the recommendations. Those of you who rely on outside research from brokers or other firms, will find Investars a helpful resource. They do quite a bit of performance tracking on the ratings these research firms provide. While past performance offers no guarantee, those of you who pay big dollars for this kind of research should know how they rank. And, while track records are important, consistency is also key.

For example, I recently wanted some idea of how the TheStreet.com's Ratings have performed as I'm also tracking their recommendations. As you can see below, what I like about Investars' data is that you can see how both the positive and negative ratings have performed collectively. A test of any solid rating system is not only how their best recommendations perform, but also those stocks that they rate poorly. Click on the chart below for more information.

The bottom line is that just because you pay for outside research doesn't mean you can turn off your brain. Performance data like this can certainly help as a guidepost.