I will dearly miss the Hulbert Financial Digest. It will become increasingly difficult to ensure that performance figures in articles are accurate. No one will be able to tell who’s lying and who’s not. If he fails, which seems likely, the investment newsletter world is likely to revert to its Wild West ways. “Unfortunately, unless something happens soon, the database will stop being maintained.” Hulbert is still looking for a buyer who will keep the business going. But News Corp.’s Dow Jones unit, which owns the Hulbert digest, “didn’t see HFD as a profitable business,” Hulbert told me.
Consequently, he has assembled a remarkable database that has provided the basis for numerous academic papers. He and his four analysts subscribe to newsletters anonymously and collect and record hotline updates. The letter costs $135 annually.Ī final note: Hulbert puts in a tremendous amount of effort to ensure that his numbers are accurate. Consequently, his picks tend to be more growth-oriented than Peters’s. Rather, he likes businesses with sustainable competitive advantages. But Coffina doesn’t focus on dividend yield. Editor Matt Coffina draws on the same Morningstar analysts as Peters, and there’s some overlap in the two letters’ recommended holdings. It returned an annualized 9.0%, or 2.5 percentage points per year better than the S&P. Morningstar Stock Investor runs close behind its dividend-oriented sibling over 10 years, ranking seventh in raw performance and sixth in risk-adjusted returns. Peters cites research showing that high-dividend-paying stocks tend to outperform over the long term. Overall, his model portfolio boasts a dividend yield of 4.3%.
Editor Josh Peters draws on the research of more than 100 Morningstar stock analysts to produce a portfolio of high-quality companies that pay generous dividends. Over the past 10 years, its model portfolio returned an annualized 9.8%, an average of 3.3 percentage points better than the S&P 500. Morningstar Dividend Investor ranks fifth among all newsletters (stock, bond and fund letters) over the past 10 years on raw returns and second on a risk-adjusted basis. Weiner has also benefited from keeping about 5% of most portfolios in Vanguard Health Care Admiral ( VGHAX), which, like Dividend Growth, is run by Wellington Management. Some of those funds, such as Vanguard Dividend Growth (symbol VDIGX), a member of the Kiplinger 25, and the Primecap funds (which are sold under both the Vanguard and Primecap labels), have produced stellar returns. Editor Dan Weiner has achieved those results almost entirely by recommending investments in Vanguard’s low-cost, actively managed funds, most of which are run for Vanguard by outside money managers. Independent Adviser ranks seventh over the 15-year span among fund letters and sixth on a risk-adjusted basis. On average, they returned an annualized 6.1%, beating the S&P 500 by 1.7 percentage points per year. Like most newsletters, this one offers several portfolios. InvesTech costs $175 a year.Īnother superior performer over that same 15-year period is The Independent Adviser for Vanguard Investors. As a result, his model portfolio has 65% in stocks-not a small percentage but below average for him.
Currently, his technical indicators are generally bearish, but his economic indicators are not. Editor James Stack, my longtime favorite market prognosticator, uses both technical analysis and fundamental economic data to fix his all-important allocation to stocks. Its model portfolio has returned an annualized 8.7%, an average of 4.3 percentage points per year better than Standard & Poor’s 500-stock index. Over the past 15 years, HFD’s top-performing fund newsletter based on both raw returns and risk-adjusted returns is InvesTech Research. I’ve listed the prices for one-year subscriptions, but be sure to check websites for special offers.
MORNINGSTAR INVESTMENT NEWSLETTERS FREE
If you’re interested in a newsletter, ask for a free issue almost all will furnish you with one. With that in mind, here are a few of the newsletters that have posted solid returns and pass my own tests for offering investors easy-to-follow advice and well-reasoned arguments in favor of their investment picks. However, long-term results, particularly if risk-adjusted, do have some predictive value. Hulbert says he also learned that short-term returns, even if they are adjusted for risk (that is, volatility), are meaningless “noise” as far as forecasting how a newsletter will do in the future.
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