What Is a Market Perform?

A market perform is a type of investment rating that is developed by investment professionals and used to provide investors with an idea of how a given asset is expected to perform, based on the overall movement of other types of market averages. The purpose of a market perform is not to promote or to discourage the purchase of the investment by investors. Rather, the goal is to offer a rating based on factual information that indicates whether or not the asset in question is likely to generate a return that is in line with whatever market averages are considered standard points of reference.

From this perspective, a market perform should not be seen as an endorsement for investors to buy. At the same time, this type of rating is not usually an indication that anyone is advising that the investment be avoided or that investors with an pre-existing interest in the asset should sell. The market perform does indicate that since the asset is considered likely to generate returns that are within the general range of other market averages, investors may want to look at that investment more closely, consider relevant factors, then decide what their next move will be.

The concept of the market perform is helpful, in that investors can use the information to avoid investments that are not currently anticipated to generate returns in line with current market averages. For investors who are somewhat more conservative and prefer to avoid a great deal of risk, using this rating as a starting point in the search for new acquisitions may be a good idea while still eliminating options that are considered likely to underperform. At the same time, many investors may also consider investments carrying a market perform to be unworthy of their attention, making it easier to focus on investments that demonstrate the potential to outperform prevailing market averages.

Like all types of ratings, the market perform is a helpful tool that can be used when determining whether to buy, hold, or sell a given security. The rating should be considered in conjunction with all other data that the investor can secure, increasing the chances of making an informed investment decision. The market perform should not be seen as any type of guaranty or endorsement of any specific action related to the security in question, but simply as one more factor to consider before choosing any action that involves that asset.