Researchers at CFA Institute and Morningstar found that a “good reputation, strong competitive advantage and popular brands” may make for bad investment prospects, according to an article in CNBC.com.

The study found that stocks with desirable traits generate lower expected returns compared to those with more unpopular characteristics. “While that may sound counterintuitive to many investors,” the article notes, “the stock market often assumes that any effect from a stellar reputation or large market capitalization has already occurred and is valued to reflect such characteristics.”

The study states: “Assets are priced not only by their expected cash flows but also by the popularity of the other characteristics associated with the company or security,” adding that “despite these concerns, the market has rewarded value investing and other strategies … that rely on buying what other investors are avoiding.”

The study also tested stock returns based on popular opinion and found that the stocks with the worst reputation rankings outperformed those with higher rankings.

The study notes, however, that unpopular stocks are usually avoided for a reason. “Investing in unpopular assets is hard” it concluded, adding that “any strategy or factor that is widely enough used will fail.”

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