With all the types of risk in the marketplace, the question becomes: Where does one look to get information to help evaluate risk before making an informed investment choice?
Basically, there are two research categories – proprietary and nonproprietary.
Proprietary information, for example, would include that issued by a company, such as annual and quarterly reports, or data on the company’s website. The prospectus for a mutual fund would also be proprietary information.
It’s important to balance such information with independent – or nonproprietary – research. As an independent financial advisor, nonproprietary information is very important to us at Thorley Wealth Management. We continually look at analyst reports and data that has been vetted and generated by research firms not tied to a given company.
Over the past several decades, this type of research has become more generally available to the public, and we review it closely for our clients.
We can also glean nonproprietary information from third-party business and financial publications, which may provide credit ratings, news stories and financial information about a company. Regarding mutual funds, third-party sources provide information such as ratings, financial analysis, and comparative performance relative to peers.