The value of research: are your research dollars buying good or bad research?

Purpose – To describe new tools for measuring the value of investment research. Design/methodology/approach – Discusses recent developments in the investment research industry, explains why recent enforcement and regulatory developments stimulate the need to measure the performance and accuracy of research, and describes various quantitative and qualitative methods for measuring the performance of investment research such as measuring the accuracy of earnings‐per‐share forecasts, calculating how much money would have been made by following a given firm's buy and sell ratings, and determining how frequently a firm's research is used within the organization. Findings – Methods recently developed to measure the performance of investment research can be tailored to the management and compliance needs of each investor. Originality/value – A useful introduction to methods for measuring the performance of investment research.