Here’s something most people fight me on: financial and investment newsletters are usually worthless.
It’s funny because people fight me tooth and nail on this but won’t ever hand over their spreadsheets so I can do a real IRR calculation for them.
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-roo, 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.
Shameless plug: My insurance-based financial planning service does not rely on endlessly touting stocks. In fact, I don’t make any stock recommendations whatsoever (weird, right?).
Instead, I show business owners (and really anyone who is self-employed, whether you think of yourself as a business owner or not) how they can accumulate a massive savings — more money than any sane person could ever spend — without investing in the stock market. I also show them how to improve the cash flow of their business, and do an all-around better job of spending, insuring, saving, and planning…
…and do it without taking stupid and irrational risks.
Wanna know more? Go here: