Penfield, NY asks…

What is Zacks Investment Management’s philosophy?

Thanks for asking Penfield – this is an important question as you’ll want to be aligned, philosophically, with your investment manager to position the working relationship for success.

At the core of Zacks Investment Management’s philosophy is our belief that every client has unique needs and that there is no such thing as a “one size fits all” approach.

With this in mind, we aim to treat each client situation with a highly personalized approach: taking time to understand your specific needs and goals and customizing your investment portfolio through use of our equity and fixed income strategies (whichever ones best meet your objectives).

Our investment decisions within client portfolios are informed by a combination of Zacks independent research (used by some of the largest financial institutions in the world over the past 40 years) and our own quantitative models. At any given point in time, we are monitoring well over 200,000 earnings estimates and brokerage recommendation data points looking for changes to fundamentals or outlooks to inform our models and, subsequently, our actions.

Our rigorous research process feeds into what’s known as the “Zacks Performance Rank,” a proprietary quantitative model based on trends in earnings estimate revisions and earnings per share surprises. Stocks are classified into five groups: #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. Since inception, the Zacks Performance Rank has proven to be a reliable indicator for predicting future movements in stock prices over a 1-3 month time horizon. The portfolio managers at Zacks Investment Management take this powerful ranking system and use it as one critical element for building and managing investment portfolios for private clients like you.

Perhaps even more important than knowing what stocks to buy is knowing when to sell a winning position. Too often emotion comes into play and investors “fall in love” with a winning stock, or alternately a stock falls too far and an investor feels trapped into having to hold it until it recovers. Here at Zacks Investment Management, we have a strong sell discipline. Just as the Zacks Rank guides us towards stocks poised to outperform, in a similar fashion the model uses negative earnings revisions to tell us when to sell – and we won’t hesitate to sell.

From a high level, we believe in the utility of a well-diversified portfolio, whether that means diversifying between fixed income and equities, across various categories of equities, or both. Our active approach to research and analysis guides our investment decisions within investment portfolios, such that we’re ‘bottom-up’ focused once we’ve decided on a client’s overall allocation.


Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. The information contained herein has been obtained from sources believed to be reliable but we do not guarantee accuracy or completeness. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.