Years ago, I subscribed to some of the highest-priced investment newsletters being sold on the Internet.
I took the advice. I made the investments. I made some money, and… I lost a lot.
Something that should have been obvious to me back then, but wasn’t:
There’s often more money in keeping secrets than in selling them.
And, that is no less true in the financial newsletter business. In my opinion, financial and investment newsletters are usually, almost totally, worthless. I’ve spoken to some newsletter publishers, and a CEO connected to one of the big-name (almost a household name at this point) publishers joined my email list last year. What I discovered after talking with her for a short bit was… she was keen on pumping me for information about my business, about life insurance, made lots of big promises, implied profitable partnerships, but… was never seriously considering delivering on any of it.
That is the newsletter business in a nutshell.
Her analysts were very skeptical of whole life insurance — they should be. It threatens their entire business model.
No one is selling “secret” tips that will explode your portfolio into a bajillion-jillion dollars in 12 seconds…
Deep down, you know this to be true. The greatest investors of all time…
…all of them have averaged between 15% and 40% annually. But, there have been many years when they’ve lost money — a lot of money. Their success took patience, skill, and ability to make it happen.
The reality is that most people won’t make money with financial newsletters because:
1) They don’t have the position size to match the newsletter’s model portfolio. If you don’t have at least $250,000 in investible cash (not including other non-invested savings), you’re a sitting duck.
2) They can’t stomach the drawdowns on the portfolio (did you know that one popular newsletter recommended a stock that plummeted 73% before it finally recovered…5 years later? Be honest. Could you hold out that long and still have sufficient cash to cover everything that life throws at you? If all you’re doing is blindly following the investing goo-ruse, you will probably be too scared to “stick it out.” …because no one really knew beforehand that that loser would end up recovering and becoming a winner).
3) The analyst makes bad picks. Hey, it happens. And, most analysts pick losers more than they pick winners.
There are some legitimate ways to pick stocks, but I’m not here to tell you how to do that. I’m here to shamelessly plug my services. Which, if used, can potentially lay the groundwork for more advanced investment strategies, safely and without taking a lot of unnecessary risk.
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