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How to Choose an Investment
Newsletter
by Marco den Ouden
Editor, The Break Out Report
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:
- Decide
on what kind of newsletter you want to subscribe to:
broad-based conservative, sectoral (e.g. - mining,
technology, etc.), investment styles oriented (e.g. -
value investing, momentum analysis).
- Look
over descriptions of newsletters that may interest you on
the Internet.
- After
you find a newsletter that interests you, check out their
track record, both long term and year-by-year.
- Newsletters
sometimes exaggerate their track record. Consult
Hulbert's Financial Digest or other sources for reviews
of the newsletter.
- Determine
if the newsletter is available in an email edition and if
they send emailed interim updates. Ones that do are
preferred.
- 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.
- 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.
- During
the trial period, read and assess the newsletter for
clarity, timeliness and value of their suggestions.
- 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.
- After
reviewing several newsletters and finding one or two to
your liking, subscribe.
- Treat
the recommendations 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.
- Once
you're satisfied with a stock pick, buy it.
- Get
stinking rich and retire!
Tips:
- You
can save on costs if you share a subscription with an
agreeable friend. Copying newsletters violates copyright
law, but sharing doesn't.
- If
subscribing to two or more newsletters, stagger your
subscriptions through the year so they don't all come up
for renewal at once.
- Newsletter
subscriptions may be tax deductible. Consult your tax
advisor.
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