The Stock Newsletter Club has monitored the performance of over 100 investment publications to determine which are the best. Full reviews can be found on the individual pages for the respective publication.
Our ratings are based on overall returns adjusted slightly for the risk the editors took to achieve those returns. Over a couple decades we’ve found only a few newsletters to be worthwhile, with only a handful being able to consistently beat market returns on a consistent basis. Surprisingly the price of the newsletter had zero correlation to performance. Just because you pay more for a subscription, doesn’t mean you’ll get better results. It only means the company is better at advertising to get people to pay more.
Three quick comments before we get to the rankings.
- The biggest marketing tactic publications will use to get more subscribers is the fear or missing out. If you don’t subscribe now you’ll miss the next Amazon, Priceline, Netflix etc. It’s a very, very effective strategy. The real risk isn’t missing out or the cost of the newsletter, it’s how much you could lose investing in stock recommendations.
- Even the best newsletters have stocks that turn out to be losers. Expect 20-30% of recommended stocks to trail stock market averages.
- While the list below is a great starting point, there are other publications that provide great market insight and may be a good fit for you. We have merely provided a list of the most reliable stock newsletters we’ve tracked.
2018 Award Winners – Top Ranked Stock Newsletters
Nate’s Notes : Solid track record over a long period of time. Includes a live Portfolio which you can mimic. This eliminates the need to guess how much to buy of what stock and when. Typically has 20 recommendations that are traded around once an initial position has been established. This eliminates the need to track or invest in too many stocks. His higher priced Wagmore Advisory Letter has suffered due to a large position in MNKD stock.
Motley Fool Inside Value : Despite undergoing an editorial change, the performance has not suffered. Although not as well known or followed as Rule Breakers or Stock Advisor, Inside Value has provided terrific results with less risk. As with most Motley Fool publications, they do a great job of educating their subscribers.
The Worthington Stock Letter : Includes a sample stock portfolio and additional stock recommendations. Invests mainly in small-cap and mid-cap value stocks with some Blue-Chip stocks thrown in. Has held as few as 10 stocks in a year which may be limiting for some. One of the more consistent performers that has held up well in bear markets.
Motley Fool Stock Advisor : David Only. Market beating results are due to multiple recommendations of stocks such as Amazon, Priceline and Netflix. Great if you like being invested in well known names. You would have to buy shares of all past stock recommendations to achieve same performance. The multiple recommendations of big winners’ offsets many losing picks, some with losses exceeding 90%. This is a true buy and hold newsletter. Does a very good job of educating investors and providing good companies to potentially
Linde Equity Report : This is more of a swing trading stock newsletter. They recommend one stock a month that is often only held a couple months. The returns have been very good even after taking the affect of regular income taxes into account. Because the stocks are held less than a year, any gains are taxed as regular income as opposed to capital gains.
Investment Quality Trends -model portfolio : Investment Quality Trends is another newsletter that has provided consistent results while holding up well in bear markets. This stock newsletter has been around for over 30 years, focusing on dividend paying value stocks.
Buyback Letter :Provides three portfolio’s and two indexes. While not providing the overall returns of our top picks, the greatest strength of the newsletter are the consistent result in bear and bull markets. While most growth and momentum stock newsletters get obliterated during bear markets, the buyback letter holds up quite well.
Stock Gumshoe : this website is recommended for their insights into the latest stock teasers that are being advertised by newsletters and the strong community that comments on the site.
Review Criteria Used To Calculate Ratings
Performance is the highest weighted factor in our algorithm. Does the newsletters recommendations and advice consistently beat their benchmark? It’s not enough to know which newsletter has the highest rate of return; that actually tells you very little.
For example: For more than a decade gold newsletters were stale and out of favor. Then gold went on a huge bull run and gold newsletters such as the Aden forecast were leading the way. However in the last 2 years gold newsletters are near the bottom in performance as the gold bull as turned into a gold bear.
When emerging markets were on fire, the Cabot China and Emerging Markets letter along with other emerging market newsletters were all the rage and rose to the top for a substantial period. Again their results have really suffered the last couple years as they lagged the U.S. stock market returns. Without the Japan Nikkei their results would have been even worse.
During market crashes such as the dot.com crash and after the real estate bubble income newsletters lead the way. The Fed’s near zero interest rates almost guarantees the short-term demise of this sector.
In the last year any newsletter that followed the bio-tech sector or social stocks did very well. Small cap growth was on fire as well as the newsletters that followed them including Motley Fool’s Rule Breakers and Stock Advisor. And so it goes. Chasing recent performance is a great way for most individual investors to do very poorly.
What we focus on is whether or not the investment newsletter is able to consistently earn a return on investment greater than their investment benchmark.
Risk. Everyone’s temperament for risk is different but their main goal should be to maximize their returns with the least amount of risk which is the essence of modern portfolio theory. There are two main components of risk that we evaluate, liquidity and drawdowns.
Liquidity essentially means how easily one can buy or sell an investment without affecting its price. Penny Stock newsletters or those such as the Stock Superstars Report recommend illiquid stocks that don’t trade a high dollar volume per day. Therefore it takes you a long time to build a decent position in the stock without driving up the price and it will take you a long time to sell the stock without driving the price down. Illiquid stocks also tend to carry a high ask/bid price which increases your cost basis.
A drawdown refers to how much money an investment strategy has lost at any one point in time. If a portfolio is at $160 in value and goes down to $80 at its low point it has lost 1/2 it’s value and suffered a 50% drawdown. There are not many investor who can psychologically handle a 50% drawdown and still make intelligent decisions. Just think about how you felt during the last stock market crash.
While not getting too detailed we don’t take standard deviation or returns and the like into account because we’re not concerned about upside positive return risk, only downside risk. The we don’t look at standard deviations, only downside risk
Subscriber Feedback: In addition to reading feedback sent to us we also survey and scour the network for subscriber feedback and ratings. We take into account the number of reader reviews, the quality of feedback, source of information and reputation management in regards to where the comments originate from.
Reputation: Who puts out the newsletter-does the business or editor have a good reputation? Has the editor or company changed the newsletters name due to previous poor performance? Do they hire people to do paid testimonials or Amazon reviews from sources like Fiverr?
If you ignore these four factors and the advice given in our articles on The 5 Things You Must Know and the 9 sneaky ways stock newsletters trick you, you can quickly find yourself in a hole that is hard to get out of. Our goal is get you into the best stock newsletters depending on your financial goals.
The tabulated results are for informational purposes only and are not meant to be be a recommendation. They are based on available information at the time of publication.