TipRanks Smart Score performance relies on backtested results, which should not be viewed as predictive of future outcomes. The figures reflect a strategy that was previously unavailable to investors, and they don’t show the actual returns achieved. These results come from applying a model based on historical data and certain assumptions that may not be verifiable and could lead to losses. For example, it’s assumed that a particular company bought the recommended securities and that the market was liquid enough for all transactions. Changes in these assumptions could significantly affect the backtested returns shown. While some assumptions are made for modeling, they are unlikely to occur in reality. There are no guarantees regarding the assumptions’ reasonableness, and the accompanying information is intended for illustrative purposes only.
Backtested performance is derived with hindsight and has limitations. It does not take into account important economic and market factors influencing actual trading and decisions. Because trades aren’t executed, results might not accurately reflect some market influences, like liquidity issues, nor the effects certain economic conditions could have on decision-making. Backtesting can lead to adjustments in security selection methods to maximize historical returns. Real-world performance might differ greatly from backtested results. It’s also important to note that while back-tested results include adjustments for reinvested dividends and other income, they typically present gross figures that don’t factor in trading costs, management fees, or other expenses unless specified. Lastly, all regulatory guidelines concerning price submissions should be acknowledged, and the calculations exclude cash balances or flows.
