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YahooEvaluate your investing strategy. While there are hundreds of investment newsletters out there, they may not all be applicable to your investing style or the asset class that you are interested in. While most newsletters cover stock recommendations, you can also find ones that are dedicated just to options or mutual funds. In addition, many funds cover the entire spectrum and recommend stocks, bonds, mutual funds, options, and alternative assets like gold. However, if you consider yourself a long-term value investor, a newsletter that focuses on trading of out-of-the-money option calls or penny stocks will not fit your investment goals or temperament. It is important to understand yourself as an investor so that you know what strategies you will feel comfortable with; if you try to follow a newsletter that doesn’t make you comfortable, you will be apprehensive about implementing the strategy and can make some serious mistakes. By understanding yourself as an investor and your strategy, style, and goals, you will be able to choose an investment newsletter that fits you.
Once you have decided what type of investment newsletter fits you the best, you can go on the hunt. One of the most popular resources for objective opinions on dozens of investment newsletters is Mark Hulbert’s Hulbert Financial Digest (HFD). Essentially, this is Hulbert’s newsletter about newsletters, and, according to Hulbert, is a “completely independent, impartial and authoritative rating service.” If you do not want to subscribe to his newsletter, MarketWatch.com has an investment newsletter directory that includes over 150 newsletters. Since this directory also includes the subscription fees, you can easily see which ones will fit in your price range. Most newsletters range from $20 to $1,000 per year, though some are priced over $1,000. Also, you can just check the websites that you normally read for any newsletter they provide or any of their affiliates. Many popular financial websites also publish newsletters, such as The Motley Fool, Morningstar, and Forbes, as well as financial services firms, such as Value Line, Fidelity, and Standard & Poor’s. Finally, while there are many newsletters out there that claim great historical performance and are from respected firms, be sure to verify their claims and do some research on the main editors before paying for a subscription.
Follow the investment newsletter’s recommendations by paper trading the recommendations before investing real money. Do not commit any real money to a suggested strategy before following what happens to the newsletter’s recommendation. Get a feel for the style of the authors and editors, but don’t let the newsletter make you think you have to “ACT RIGHT NOW to lock-in huge, riskless profits!” If your newsletter starts to sound like this, you should unsubscribe and save your money.
