How to choose an investment newsletter

It's difficult to keep track of thousands and thousands of stocks on your own. Subscribing to a good newsletter or two will help you narrow down your choices and alert you to stocks you may otherwise overlook.

Difficulty Level: average      Time Required: several months

Here's How:

  1. Decide on what kind of newsletter you want to subscribe to: broad-based conservative, sectoral (e.g. - mining, technology, etc.), investment styles orieneted (e.g. - valueinvesting, momentum analysis).
  2. Look over descriptions of newsletters that may interest you on the Internet.
  3. After you find a newsletter that interests you, check out their track record, both long term and year-by-year.
  4. Newsletters sometimes exaggerate their track record. Consult Hulbert's Financial Digest or other sources for reviews of the newsletter.
  5. Determine if the newsletter is available in an email edition and if they send emailed interim updates. Ones that do are preferred.
  6. If you run across a newsletter at a booth at an investment conference, chat up the writers and get a feel for them: how they think, what approach they take, how knowledgeable they are.
  7. Most newsletters offer a free trial subscription or free samples. Some even have complete collections of back issues free online. Some subscription agencies will let you get short subscriptions to half a dozen or more for a low price. Use these options first.
  8. During the trial period, read and assess the newsletter for clarity, timeliness and value of their suggestions.
  9. Consider price. Newsletters vary greatly in price, but the more expensive ones are not necessarily better. You may want to subscribe to two cheaper ones rather than one expensive one.
  10. After reviewing several newsletters and finding one or two to your liking, subscribe.
  11. Treat the recomendations in newsletters as suggestions, not as gospel. The newsletter may provide all the info you need to assess a stock or you may want to research it further.
  12. Once you're satisfied with a stock pick, buy it.
  13. Get stinking rich and retire!
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Tips:

  1. You can save on costs if you share a subscription with an agreeable friend. Copying newsletters violates copyright law, but sharing doesn't.
  2. If subscribing to two or more newsletters, stagger your subscriptions through the year so they don't all come up for renewal at once.
  3. Newsletter subscriptions may be tax deductible. Consult your tax advisor.
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