Stock or bond has a rating for assessment. It is a tool for analysts to rate the stock or bond. This rating system indicates the stock or bond’s level of investment opportunity. There are three major rating agencies around the world. They are Fitch Ratings, Standard & Poor’s, and Moody’s Investors Service. This rating also evaluates the creditworthiness of the issuer or insurer. It can be a direct measure of the chances of default.
For stocks for instance, the analyst would do research on buy-side and sell-side.
Then they will write an opinion of the stocks they cover. It then covers a rating for buy, hold, or sell. The ratings of bonds however pass through the three major bond rating agencies. Buy-side occurs in the segment of financial institutions for a free-market economy. It means a firm that purchases investment securities. These cover many insurance firms ranging from mutual funds, hedge funds, and pension funds buying securities for their own accounts or for investors. Therefore, they have the same goal of generating a return.
Sell-side is the opposite of buy-side.
Instead of paying investment securities directly, sell-side does not involve financial instruments to the public market. The epitomes are creation, promotion, sale of stocks, bonds, foreign exchange. The private capital market instruments such as private placements of debt and quality also include in the sell-side. Both sell-side individuals and firms collaborate to create and service products. The products are available through the buy-side financial industry. In Wall Street, the sell-side covers investment bankers serving intermediaries between the investing public, issuers of securities, and market makers. They work to provide liquidity.
