Ranking

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Ranking

Any way of arranging investments in a hierarchy according to return, risk, or any number of other metrics. For example, one may compare investments to each other to determine which are most likely to outperform, underperform, and perform the same as the market as a whole. Ranking systems may assign categories using letters (say A-E), numbers (1-5), or even with individual names.

Ranking.

Ranking is a method of assigning a value to an investment in relation to comparable investments by using a scale.

The scale might be a straightforward numerical (1 to 5) or alphabetical (A to E) system, or one that also uses stars, checks, or some other icon to convey the evaluation.

Research firms and individual analysts typically establish and publish their criteria -- though not their methodology -- for establishing their rankings.

These criteria, which also differ by investment type, may include quantitative information such as past earnings, price trends, and the issuing company's financial fundamentals, or more qualitative assessments, such as the state of the marketplace.

Ranking can be a useful tool in evaluating potential investments or in reviewing your current portfolio. Before depending on a ranking, though, you'll want to understand how it has been derived and how accurate the system for assigning the values has been over time.

References in periodicals archive ?
The first year of the Ranking System will come into effect from today and go on till August 31, 2015.
com's unique ranking system was developed by a team of editors and automotive data experts who continuously produce and distill the best and most current automotive research data available.
That would never happen if an individual investor followed the strategy and ranking system within the Bell Performance Review.
1 Strategy Trust, will invest in the 100 companies ranked number 1 in Value Line's Timeliness Ranking System.
Standard & Poor's STARS has given investors a successful and uniquely accessible ranking system using an easy-to-follow range of 1 to 5 STARS (5 STARS indicating "buy" and 1 STAR meaning "sell").