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Behavioral Intelligence

Beware: Ratings Companies Are Biased

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Click on the image above to watch the video.
 

Investors will often rely on ratings companies as they perform their due diligence. Makes sense – an investor should research investment securities before they make any decisions.

Related: Passive Investing vs. Passive Investor

But what happens if the rating companies themselves, and their methodology, are subject to biases? 

Watch the 90 second video below as I illustrate this with Morningstar and the PGIM fund. This is just one example, but it is not unique.

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