Whilst the investometer®can easily be understood and interpreted, it also provides a solid infrastructure for more sophisticated and objective empirical studies that current recommendation jargons will not permit. Plotting and comparing analysts’ recommendations against a model set of investometer® recommendations involves setting up a "perfect" model using the same universe of investments over a clearly delimited period of time. The length of time covered must be defined in advance and will depend on the type of financial products being considered. The approach that should be used in plotting a model set of investometer® recommendations and calibrating analysts' recommendations against this model is shown below.
Definition of a Model Line of Recommendations
;)