The Ten Worst Performing Stock Market Newsletters for 2007

When new investors enter into the stock market for the first time, they look for experts to give them some advice. Actually, that applies to anyone who feels they don't have the time or understand how to pick stocks or mutual funds in general. For some reason, everyone searches for the brass ring in financial gurus. They feel by subscribing to a stock market newsletter; it will give them an advantage. Whether you are reading advice in financial magazines, financial networks, or subscribing to a stock market newsletter there are several things you should consider before actually putting your hard earned cash into the stock market. Otherwise, you might end up having bought one of the top ten worst performing stock market newsletter for the year I have listed for you below.

Four Tips for Selecting Stock Market Newsletters

1. Always look for a free trial to the newsletter; however, never give them your credit card. Some newsletters ask you for all the information as if you were subscribing with payment and tell you that you can cancel after your free trial is over. There is no need to choose a newsletter like this. It's a sales gimmick. If they are good, their performance will convince you to subscribe.

2. Check their record several years back. See if they have gone through a tough bear market year and how they preformed. You have to be aware of the hyping of stocks through their newsletter. One way you can tell is by reviewing their past performances. I would suggest seeing how they have performed in a tough market, like in the year 2000 and 2001 when we turned into a bear market. The Dow started at 11,000 and went down around 8400. Or look in the years 2004 and 2005 when we were in a flat market trading within 10,400 to 10,900. If they had good performances when the market was flat to down then that shows good risk/reward management. Make sure you understand their time horizon, whether they are short term trading or long term investing.

3. See if they invest their own money into their recommendations and when they put the investment into play. The main reason for this is you want to have someone who will put their money where their mouth is. However, at the same token, you don't want to see someone who has a position yesterday and today they are recommending it. Sometimes, they could be using the newsletter as a platform to hype their own stock then trade out of it when it runs up fast. And as I mentioned in tip #2, it's also a good idea to see how long the holding period is with their recommendation. If you are talking about quick buys and sells then be careful or you could be making them rich and you poor. This was very common especially in the late 1990's with the Internet stocks and you know what happened to the Internet stocks back then? The bubble burst!

4. Paper trade their stock tips before buying the newsletter. It never hurts to be safe and by paper trading for a while so you won't lose money. Give it 6 months to feel comfortable with their choices. In my opinion, the toughest times of the year would be May through October. The other period is a seasonally favorable time. Let's see how they do during the tough periods.

2007 Ten Worst Performing Stock Market Newsletter for 2007

The below Stock Market Newsletters were evaluated byMarketWatch.com and their performances are year to date through November 30, 2007.

BI Research was down 15.5%
Michael Murphy's New World Investor was down 15.7%
Forbes/Wolfe Emerging Tech Report was down 18.3%
Bernie Schaeffer's Option Advisor was down 18.4%
Vickers Weekly Insider Report was down 23.5%
Equities Special Situations was down 24.6%
CurrinResearch.com was down 26%
Doug Fabian's ETF Trader was down 27.4%
Fredhager.com was down 31.3%

At the time this survey was taken the market was up 10% from the beginning of the year. Therefore, you have to wonder what these so called "gurus" were doing or following to perform this badly. These newsletters are not fly by night newsletters either. Consequently, it goes to show you that even if you assume someone who sounds like they know what they are doing; they don't always perform the way they talk.

You should always do your own due diligence; otherwise, you deserve what you get. I personally apply this to anything I do in life, house, and taxes; large purchases of any kind and of course all investments. There is nothing wrong in hiring someone to assist you with your selections of stocks or mutual funds. However, you should at least lower your risk by asking the right questions, or you might experience the fate like one of those sub prime buyers that are now facing hardships.

I use to assume people in politics were smart, but that was when I didn't follow what they were saying. Once I started to paid attention, I realized that the more exposure to the issues I got the more deceptive things appeared. Plus, I learned that many politicians aren't that smart. The point is, don't underestimate your capabilities in analyzing stocks or what mutual funds you should pick. Just take a look around you and your environment. The answer could be right in front of you. By knowing what you are looking for, you can weed out the bad recommendations from the good. Remember what they taught us in school? There is never a stupid question.