A friend I used to work with got me involved in some free newsletters related to business, finance, and investing. This model of publishing — a highly successful one, by the way — is designed around sending free, high-quality commentary in newsletter form and peppering the newsletter with ads for paid newsletters, related programs, cross-promotions, etc., almost as an afterthought. I've continued to subscribe to most of them because they're that good, and I don't mind the advertising.
The free ones are entertaining, thought-provoking — and deliberately vague when it comes to specific advice on stocks or sectors. They'll talk around it or give you enough information that you might be able to determine the company if you're clever with Google. But as far as target price, they're mum. They'll also tell you about all of the fantastic gains that subscribers of such-and-such paid news service have gotten over the past three months.
The object, of course, is to entice you to buy the paid newsletters. Which I did. I bought a two-year subscription to one of the newsletters for about $70/year — and the research within was generally insightful. I did some checking and their results were pretty impressive.
Which brings me to my next point. You need a lot of money to be able to invest in every play they recommend. It might be a few thousand dollars each for 4 or 5 recommendations, and these might be held for years. So if you faithfully follow all of their recommendations to the letter, you might get the 70% annual return they quote, but you'll have tens or hundreds of thousands of dollars tied up in the plays.
Does anyone have any experience with paid investment newsletters?
Hulbert's Financial Digest tracks the performance of many of the subscription investment newsletters. It's amazing how different the actual results are from the "selected" results the newsletters advertise. (Our local library subscribes to the digest so you should be able to find a local free copy.) Using the digest I found two newsletters with good track records that I decided to subscribe to. I've been happy with both.
I agree that it is impossible to follow every single stock recommendation/tip. I try to get a general feel of different markets/industries by glossing over different reports and newsletters. For example, many reports say that China is importing a lot of metals like copper due to its booming economy requiring a lot of construction. Copper companies have been doing very well over the past year. And I think their stocks still have a lot more upward momentum. (China needs to build a lot for those 2008 Games.)
I use TDWaterhouse as my online broker. Once I'm logged in, I have access to more newsletters/reports than I have time to read. These are usually already quite sufficient. I'm sure most online brokers have these resources.
Good points Dave and Techie! I hadn't heard of Hulbert's Financial Digest. Techie, the one stock in my portfolio that hasn't gone down is my mining company stock — and it's up close to 100% from where I bought. So that has my attention. 🙂
I also subscribed to the Hulbert’s Financial Digest to get the real scoop on the best newsletters. Right now my only subscription is to Contraryinvestor.com which features mostly general economic commentary. I enjoy doing my own thing. In the end, it is still you who have to follow through on the newsletter recommendations.
Times are not making things easier thats for sure.