Stock newsletters are an invaluable source of stock recommendations and up-to-date stock market analysis. Whether you prefer daily stock picks based on technical chart patterns or long-term trading ideas based on fundamental value, there’s a stock newsletter out there for you.
However, the sheer number of stock newsletters available to choose from makes it hard to know what services are worth your time and money. To help you identify the best stock newsletters for your trading style, we’ll take a look at what to consider when choosing a newsletter service. We’ll also highlight four of our favorite stock newsletters for fundamental and technical traders.
What is a Stock Newsletter?
A stock newsletter is a subscription service that offers stock recommendations, trading tips, or analysis of current market conditions. Think of these services as digital stock advisors.
These days, investment newsletters almost always come in the form of emails, and they may come as frequently as multiple times per day or as infrequently as once per month.
Part of the reason that there are so many different stock newsletters is that alternative mailings can cover many different aspects of trading. Some publications focus on highlighting trades identified by technical patterns, others offer picks based on fundamental value or custom algorithms, and still, others focus on specific industries or trends.
Investment newsletters may also focus on different types of investment assets, such as mutual funds, individual stocks, and options. You will need to think about what type of financial advice you are looking for before choosing a service.
Popular services include Action Alerts by Jim Cramer, Investment Advisory by Stansberry Research, and Stock Advisor by Motley Fool.
The Best Stock Newsletters
Let’s take a look at four of our favorite investment newsletters for any trader. We’ve reviewed hundreds of services, and these are the best options for most investors. If you want to see how we chose these picks, continue reading our rating criteria below.
#1 – The Motley Fool Stock Advisor- Best Overall
The Motley Fool’s stock picking newsletter is incredibly popular, and for a good reason. The Fool’s picks outperformed the market by more than 30% over the course of 2018 and 2019. That’s an incredibly strong history of return that makes it easy to justify the cost of this service.
While the Fool offers a range of services, including Rule Breakers and Rule Your Retirement, the Stock Advisor is the best program by a longshot.
The newsletter is issued monthly, with two stock picks in each mailing. These stock picks are explained with a combination of technical and fundamental analysis, but the service doesn’t get too into the weeds and leaves you room to do your own research. You’ll want to keep an eye out for the monthly mailings since The Motley Fool’s user base is large enough that the companies it highlights tend to pop a few percent the day the newsletter comes out.
We analyzed Motley Fool’s 24 stock picks from 2020, and this is how they performed to date (July 2021):
On top of the monthly stock picks, The Motley Fool’s service includes access to “Best Stocks to Buy Now” recommendations throughout the year and a selection of starter stocks for new investors’ portfolios. Subscribers also get access to investment education. The pricing is fair, and subscriptions come with a money-back guarantee. This is easily one of the best options for most investors. At only $99 for the first year, you can make back the membership fee pretty quickly with a single investment.
- Pricing: $19 per month or $99 for the first year
- Frequency: Monthly
- Read the full review here
#2 – IBD Leaderboard – Best for Technical Investors
Leaderboard by Investor Business Daily is a full-fledged trading platform, but it includes a daily newsletter that can be used for receiving expert stock recommendations. In many ways, IBD Leaderboard is a lot like The Motley Fool – it focuses on one or two stocks at a time and builds a case for them. The main difference is that IBD Leaderboard draws in a lot more of its evidence from short-term technical patterns rather than fundamentals and company characteristics.
The newsletter is also helpful for getting a birds-eye, but detailed view of market conditions. The end-of-day mailing includes commentary on market conditions and offers a summary outlook of what’s to come.
Still, IBD Leaderboard lags a bit in performance. Its stock picks were up 21% through July of 2019, while the S&P 500 was up 19% over the same period. While it did technically beat the market, that kind of performance isn’t worth the price of the newsletter on its own. So, IBD Leaderboard is best if you can use not only the stock recommendations but also the rest of the newsletter content to formulate your own trades.
- Pricing: $69 per month or $699 per year
- Frequency: Daily
#3 – Gorilla Trades – Best for Short-Term Traders
Gorilla Trades is a daily stock picking newsletter that focuses entirely on technical strategy. What’s interesting about this service is that the picks aren’t automatic buy recommendations – they’re potential stock picks, and you get instructions on what price point the stock needs to hit before it triggers a buy signal. On top of that, Gorilla Trades sets two price targets for each stock pick and a stop loss that’s updated after the stock triggers.
The service sends out a detailed mailing at the end of the trading day to highlight new potential picks and highlight how stocks in the current portfolio performed. While it’s certainly not a news or analysis newsletter, you also get some commentary on how the market is doing and why. Gorilla Trades also issues some options trade recommendations, although these are typically included in only one of the daily newsletters each week.
Gorilla Trades performs relatively well. There are 20-30 triggered stocks in the portfolio at any given time, and most of them gain at least 7% over the course of a few months. Figuring out exact historical returns can be difficult, though, since there are multiple price targets and moving stop losses.
- Pricing: $499.95 per year
- Frequency: Daily (with midday trading update)
#4 – Stansberry Investment Advisory – Best for Long-Term Picks and Diversification
Stansberry Investment Advisory is a monthly newsletter aimed at long-term fundamental investors. As of 2019, several of the picks in the newsletter’s portfolio date back to 2012, and one dates back to 2007.
Each month’s newsletter focuses on a specific niche industry and tells a story about why it’s poised for growth before honing in on a single stock recommendation. The format is lengthy and largely ignores technical patterns, so it leaves you with some research.
Estimating the historical performance of stock recommendations is difficult, but the newsletter appears to have largely outperformed the broader market over the past decade. In addition to offering a new recommendation, each monthly mailing updates past recommendations with a buy/sell/hold rating and assigns risk on a 1-5 scale.
- Pricing: $199 per year
- Frequency: Monthly
How to Choose the Best Stock Newsletter
There’s no single best investment newsletter for every trader. Obviously, every investor wants to beat the market, but there are multiple ways to achieve this goal. Do you want to find a great mutual fund, a great stock, or general market information?
Finding the best investment newsletter ultimately comes down to what you need and whether you can use a newsletter’s content to improve your investment results.
With that in mind, there are a few factors to consider when evaluating whether a specific stock newsletter will meet your needs.
Newsletter Coverage
The first thing to consider is what the newsletter is about. Do you want a financial newsletter that offers stock picks? And, if so, do you prefer stock picks based on a defined technical strategy or based on long-term fundamental data. Alternatively, if you trade primarily within a specific market sector or around a niche sub-industry, chances are you can find a stock newsletter that covers companies you’re interested in.
You can also find stock market newsletters that are focused more on improving your trading strategy than on offering specific stock recommendations. These services may include information on:
- Daily tips based on examples from that day’s trading sessions
- Financial news every trader should know about (like a “Financial Digest”)
- Analysis of different stocks or industries on a rotating basis.
Frequency
It’s also important to consider how frequently a newsletter will arrive. Receiving stock recommendations on a daily basis is helpful if you’re an active day trader, but it may be less helpful if you’re looking for information on how to invest your retirement funds for years at a time. On the other hand, active traders may find that weekly or monthly stock newsletters may not mesh with the timeline on which you want to move money into and out of the market.
Even for investing newsletters that focus on news, trends, and tips, frequency matters. It can be tempting to fall out of the habit of using a stock newsletter if it comes more frequently than you have time to deal with it.
Newsletter Performance
If you’re looking specifically at services that offer stock recommendations, performance is essential. In the same way that you wouldn’t sign up for an investing app or platform with a 10% success rate, you shouldn’t invest in a service with a history of recommending unprofitable trades.
Depending on how a stock newsletter’s recommendation system works, checking on past performance can be easy or hard. Some newsletters with regimented entry and exit points make historical return data readily available. Other newsletters that make a slew of recommendations, but don’t attach entry or exit price points, may not have performance metrics to share at all. In that case, it’s important to check around for reviews of the service to see what traders’ experiences with it have been like.
Price
Most investment newsletters don’t come free, but they shouldn’t cut deeply into your pockets, either. Prices vary widely, but you should expect to pay around $100 to $600 per year for a decent service.
Keep in mind that your subscription should provide a return on investment. If a newsletter can help you rack up trading profits, it probably won’t be an issue to pay around $400 per year for it. On the other hand, if you’re looking at investment newsletters with less direct value, like news-focused mailings, you probably won’t want to pay quite as much of a premium.
Are Investment Newsletters Worth It?
Now that you know what to look for in an investment newsletter, the question is, “are investment newsletters worth it?”
The short answer is “yes,” but there’s a caveat. Investing newsletters are not all created equal. You are paying for access to information that should help you improve your investing strategy. The value of this information comes down to your personal financial situation and the service you choose. We highly recommend choosing one of the investment newsletters listed above, as our team has vetted them.
It can help to think of these services in terms of ROI. If you spend $100/year on a service, will it help you make more than $100? If you are investing with a portfolio that has more than a few grand, the answer is likely to be yes. You can easily make back $100 on a single trade. However, if an investment service costs $3000/year, you may be wary. It will be more difficult to recoup your initial investment and generate a return.
Lower cost programs like Motley Fool Stock Advisor tend to be safe bets for casual investors. Higher-end programs like those offered by Stansberry and Agora may yield positive results, but recouping your initial investment can be challenging.
What Type of Stock Newsletters Should I Avoid?
As explained above, stock newsletters can be a great investment. That said, not every service is worth it, and many should be avoided at all costs. Below are a few types of newsletters you should avoid.
Avoid stock newsletters with a short track record. If you are going to take financial advice, you should make sure the advisor has a time-tested strategy. Most investors will hold stocks for 5-10+ years, so it’s important to make sure the stock picks perform well over time. If a newsletter has only been in business for a few years, the performance hasn’t been proven yet. While the stock picks could perform well, there is no proof yet.
Avoid the hype. Investment newsletters can help you beat the market, but you should maintain realistic expectations. Don’t expect to 10x your account in a single year. Many stock newsletters will tout their winners to hype up their service. Don’t get sucked into the hype.
Avoid overpriced services. As discussed above, paying for a stock newsletter should be an ROI-driven decision. You sign up for a service because you believe you will make more money with it than you would without it. If you pay $100/year for a stock newsletter, the goal is to make at least $100 more on your investments each year (ideally, way more). You should also consider the cost of alternative services. For example, a $1,000/year service may help you generate an additional $1,000+ in returns, but those same returns may have been achieved through a more affordable service.
Conclusion
Stock newsletters can take a lot of the work out of researching trades, and many options have track records of outperforming the broader market. The diversity of newsletter offerings means that there is a mailing for almost every trader. But, it’s important to know what you’re looking for and how a stock newsletter will integrate into your broader trading strategy.
