Signup for our free newsletter:

Are Financial Newsletters a Scam?

Written By Jason Stutman

Posted May 22, 2017

People should always be skeptical when it comes to their finances.

History is rife with examples of financial entities taking advantage of customers, so it’s only natural to be wary of anyone in the business.

But when wariness turns to full-blown paranoia, it can often be more harmful than helpful. Paranoia can be a profit killer, in the sense that it prevents you from taking action.

In my line of work, I see this kind of thing happen every single day. That is, paranoid investors who turn against many of the resources that could help them. These investors are fearful, assume the worst of people, and worry that any resources coming their way are some kind of scheme or a scam.

Unfortunately, financial newsletters are one of the first resources these investors turn their backs on.

In fact, I used to be one of these people. But I eventually learned that this kind of paranoia was a mistake.

Financial newsletters, I’ve come to learn, are an incredibly valuable tool for novice and seasoned investors alike. I’d go so far as to say they’re necessary for anyone who truly wants to take control of their finances. 

While not every resource you come across will be reputable, the truth is most financial newsletters are fully staffed by honest and hardworking researchers who are determined to unearth major investments. Their reputations rise and fall based on the accuracy of their predictions. So, unlike brokers who profit no matter how well (or poorly) your investments perform, these people have plenty of skin in the game — just like you.

Research Has Value

One of the earliest lessons any analyst learns it that research has value.

Conducting research takes time, energy, and money. I know, because I work in a room filled with experts paid to conduct research.

When investors fail, it’s because they don’t make research a priority. They get sucked into companies that look profitable but lack potential.

The secret to smart investing is knowing more than the investor next to you. After all, you want to be like Warren Buffett, who conducts research and is an early investor in companies poised to boom. You don’t want to be another investor jumping on an overvalued stock about to pop.

But finding companies set to boom is an arduous task.

That is the beauty of financial newsletters. The research is done for you and neatly packaged in an understandable format. You can continue research on your own, knowing that you are barking up the right tree.

A good example of this is our recent coverage of digital currency Ethereum. We began covering Ethereum when it was barely a whisper in the digital currency world.

Ethereum is a complex technology with limitless potential. But part of its potential is its network complexity. This means that many sources on Ethereum are highly technical.

So, we broke down the technical jargon and offered the research to our members, hoping they would recognize the opportunity. Many did and are now sitting on gains in the triple-digit territory.

Our research was a tool to help investors make their decisions.

All financial advice should be taken with a grain of salt — whether it’s coming through a broker or newsletter.

But with research, you have something to shoot at, instead of just firing blankly into the financial void.

They Save You From Brokers

For novice investors, every penny counts. But sadly, many investors watch their hard-earned savings disappear. The cause is hidden fees, which can affect you if you invest through a personal broker or a brokerage firm.

Last Week Tonight host John Oliver summed up these fees perfectly: “Think of fees like termites; they’re tiny, barely noticeable and can eat away your **** future.”

This slow destruction is happening every day in 401(k) accounts. And because of secretive business practices, investors are surprised when their retirements slip through their fingers.

In 2012, the federal government forced 401(k) plan companies to disclose hidden fees. But even with forced disclosures, most people remain in the dark. You’re forced to pay shareholder service fees, account maintenance fees, revenue sharing fees, etc.

By the time all these fees are charged, you have lost a significant portion of your investment. The way these fees are structured, if you make 7% on your investments a year, you will lose 10% of that amount. And that happens year after year.

It is so bad that a simple 1% reduction in fees would add 10 years of retirement to a 401(k). This is where financial newsletters act as saving graces.

These kinds of publications offer investors stock recommendations without the hidden fees.

Our subscribers benefit from our research every day. Wealth Daily is staffed by experts who specialize in a variety of markets. This gives subscribers a well-rounded view of the investing world.

Just look at what some of our subscribers have to say:

“This newsletter makes decision making much easier on Wealth-related issues PLUS on how stocks could move on a daily basis. Just brilliant. I understand the amount of hard-work that goes into providing such a report day in day out. HATS OFF !!!” — Kamal M.

“This site is an excellent source for financial news as well as being a leader in picking winning investments. These guys do in-depth research. Thanks again” — Lou H.

“Wealth Daily tells it like it is and is the best free resource I’ve found. I share this info with all who will listen. Thank you!” — Kaylynn R.

We are thankful for all the positive testimonials we receive from subscribers. Many subscribers even opt into our premium services, knowing they will keep more of their money with a service than with a broker.

These services still cost less than a professional broker. And they are spearheaded by analysts who have experience in specific sectors. My premium service focuses on technology stocks, a sector I have been researching and working in for years.

Tools Are Only Dangerous When You Misuse Them

Investors who turn away from free investment newsletters because they fear scams and are missing out on lucrative advice.

You don’t have to act on everything you read, but you can evaluate and decide what’s best for you.

Just remember that any resource is valuable. Our members who upgrade from a free resource to a premium one see this value.

But many novice investors glean great information from our main services. They listen to our podcasts, read our weekly blogs, and benefit from the advice of our experts. All for free.

At the end of the day, financial newsletters aren’t a scam — they are a tool. And when used appropriately, they have tremendous value.

It’s the investors who don’t do their research, read full articles, or buy responsibly that give free resources a bad name.