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Cynical, but always worth remembering, is this fundamental rule regarding Wall Street: Any investment recommendation, whether from a prestigious firm or a tiny brokerage you’ve never heard of, should be assumed to be a sales pitch until proven otherwise.

Institutional investors follow the rule. They understand that Wall Street is a giant sales machine, which is why they are eager to receive the analysis that underpins Wall Street research but ignore the actual recommendations. Big investors know that the Street rarely says anything critical or negative about a company that could potentially be an investment banking or retirement plan customer; so, the worst you’ll usually hear about a company’s prospects from a Wall Street firm is nothing.

The Bullish Bias

When it comes to the market as a whole, not just specific companies, Wall Street has an equally bullish bias. A recent article in The New York Times notes just how bullish – and incorrect – the analysts are.

From 2000 through 2015, Wall Street’s consensus about how the market would perform in the coming year was always bullish, with predictions of rise in the Standard & Poor’s 500 Stock Index at about 9.5% a year, on average, according to calculations by Bespoke Investment Group that the Times cites.

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