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Article Title:
Investment Newsletters Can Soothe Investor Angst

Article Description:
The New-York Times reported on January 6, 2006 that IBM has 
decided to freeze its Pension Plans once and for all. And that 
it has instead decided to funnel all future contributions to its 
401(k) plan alone. More large companies are expected to follow 
suit, sounding the final death-knell for defined-benefit pension 
plans in US.

Additional Article Information:
1053 Words; formatted to 65 Characters per Line
Distribution Date and Time: Tue Jan 24 02:02:36 EST 2006

Written By:     Shri V. Srikanth
Copyright:      2006
Contact Email:  mailto:[EMAIL PROTECTED]

Article URL:

For more free-reprint articles by this Author, please visit:


Investment Newsletters Can Soothe Investor Angst
Copyright © 2006 Shri V. Srikanth
Character & Wealth

The New-York Times reported on January 6, 2006 that IBM has 
decided to freeze its Pension Plans once and for all. And that 
it has instead decided to funnel all future contributions to its 
401(k) plan alone. More large companies are expected to follow 
suit, sounding the final death-knell for defined-benefit pension 
plans in US.

This trend is not new, and most young workers today have no 
expectations of a pension from their companies. 

That means each of us has to make sure that we save and invest 
for our own future retirement, which often implies developing a 
portfolio north of $1 million to fund a comfortable retirement. 

Boom times for Investment Advice

This ongoing shift of burden on to the average individual has led 

1. A mushrooming of web-sites that provide advice and information 
about stocks and investing (, come to 

2. Soaring popularity of TV shows centred around investing (Mad 
Money on CNBC, CNBC itself as a business channel, Bloomberg TV).

3. The number of financial advisors increasing sharply, as 
individuals and corporations seek out advisors to help themselves 
and their employees. According to the Occupational Information 
Network, the growth rate in this profession will remain above 
average at 21-35% through at least 2012 (which means a doubling 
every 2-3 years!).

4. A dramatic increase in the number of mutual funds (numbers 
continue to be in the 10,000+ range)

5. And due to the tepid returns in the markets, a huge increase 
in the number of hedge funds and other alternative investment 
funds (significantly raising the risk profile for many investment 

Ill Prepared

Our educational system and our corporate work environment do not 
adequately prepare us for the world of investing. But we are 
forced to become investors nevertheless.

This has had the unfortunate consequence of forcing us into one 
of two pathways:

1. Either learn everything there is to learn about investing 
until we become good at it, or

2. Hand it all over to a financial advisor and hope and pray she 
is a good one!

Choice #1 is hardly a real choice. Investing is a life-long 
learning experience, and becoming good at it requires tons of 
hard work (like any other profession).

Choice #2 is more helpful, and yet to completely hand over all 
control of your financial affairs is not the best situation 

Most individuals begin by attempting to do it all by themselves. 
But when they finally get tired of either losing money, or as 
happens more frequently, making no headway, they switch to #2 -
only to wonder later if they have done the right thing in handing 
over the reigns so completely. 

There is however another resource which can yet save the day, and 
that is the world of Investment Newsletters. 

Are there good Investments Newsletters out there?

Of course we all have seen advertisements of some newsletters in 
our junk mail at home or in our spam folders. But most of those 
are either new or do not have a stellar track record. 

But there are several very good newsletters out there, whose 
editors have a long and successful track record. Using the 
excellent services of Hulbert Financial Digest one can pick out 
the really good ones from the also rans. 

Investment Newsletters offer that happy medium between educating 
the investor and providing direct recommendations. And today, 
they cover a wide spectrum of investment vehicles:

1. Mutual funds

2. Individual Stocks

3. Bonds and other Income generating vehicles

4. Gold & Other precious metals markets

and so on. 

You can pick one based on your favorite market area!

Even after one has subscribed to a newsletter (or two), there 
is a discipline to be applied in order to profit:

1. Do not read only a few issues

Most of the time, when you sign-up, the newsletter would have 
some ongoing recommendations. Following those recommendations is 
like getting onto an elevator mid-way. You may still get some 
growth, but you could be close to the end. Be mindful of that 
possibility. This makes it important to give the newsletter 
enough time (about 2 years) to make some new recommendations and 
for those recommendations to work out. 

2. Follow the recommendations strictly

An error that a fresh newsletter subscriber frequently makes is 
not following instructions closely enough. The individual 
investor has a tendency to insert his own judgment along with the 
recommendations of the newsletter editor. This causes a problem 
because the editor is making recommendations from a deeply 
developed sense of the markets, while the individual investor, 
most of the time, is simply guessing. This combination can at 
best, significantly reduce profits, and at worst, cause serious 
loss of money. Stick to the advice - you are paying for it!

3. Understand investing versus speculating

In many newsletters, recommendations would be directed at a 
speculator versus an investor. Understand the difference between 
the two, and divide your capital suitably. Do not use money that 
is meant for investing in speculation - that is no better then 
betting on a gambling table in Vegas. Speculation implies a 
chance for catastrophic losses. Be careful.

4. Subscribe to Alerts or Warning Bulletins

These are extra services offered by newsletter writers in order 
to be able to reach you between issues. These may be expensive, 
but even one tip a year would pay for itself. Always subscribe to 
these services.

5. Pay attention to what the editor is saying

This goes beyond following recommendations closely. In fact, you 
may reach a point where you ignore everything and just follow the 
recommendations. Avoid that tendency. Pay close attention to the 
reasoning behind the decisions, and to the accompanying charts 
and graphs. This will devlop your own investing prowess to one 
day enable you to go it alone if you so chose.

Paying attention to these simple principles, you, as the 
individual investor, can maximize your returns from these 
newsletters and be riding towards a comfortable portfolio for 
your golden years.

Investment newsletters represent one of the best choices for most 
individual investors to build up a hefty nest egg. You would 
still be well served by having a financial advisor for other 
areas of personal finance, but you would be in firm control of 
your investments!

Shri V. Srikanth is a member and author of several articles at 
<a href="";>Character & Wealth</a>, a site 
dedicated to providing practical 
insights to a high-income, high-net-worth life for its community 
of members. You can contact Shri at [EMAIL PROTECTED]



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