Best Places to Get Investment Advice
As Shakespeare hinted in As You Like It, too much of a good thing can be, well, not so good. When it comes to information about investing, it seems, truer words were never spoken. Data, charts and stock tips abound on the internet. Many books and—ahem—magazines offer a ton of investing advice, too—enough for rookies to master the basics of investing and for old hands to hone their skills. The problem is, the flood of material makes it difficult to separate the good, the useless and the stuff that’s flat-out dangerous to your wealth.
See Also: The Best Online Brokers
How do you sort through the jumble of voices to find the advice that’s most appropriate for you? The key is to make sure your investing philosophy meshes with that of the source you’re reading. Focus on finding a suitable source or two. “Too many voices can be a problem,” says Dan Wiener, editor of the Independent Adviser for Vanguard Investors. “It can get confusing.”
We polled advisers, professional stock pickers and bond specialists to find the best investing tools, newsletters, websites and journals. Some of our favorites are free; you’ll have to pay for others. We’ve organized our favorites by topic: stocks; mutual funds and exchange-traded funds; bonds; and market commentary and more.
Stocks. Unfortunately, identifying newsletters with records of superior recommendations got harder with the demise in early 2016 of the Hulbert Financial Digest, which tracked the results of investing letters. Editor Mark Hulbert says the digest’s long-term records through January 2016 remain valid. But any performance data beyond that date comes from the letters themselves and has not been independently verified.
If you’re building a stock portfolio, check out Morningstar’s StockInvestor ($42.95 per quarter or $135 per year). Its “Tortoise” and “Hare” portfolios are the highlights of the monthly newsletter. The portfolios are created by a Morningstar division that manages client portfolios using the same Hare and Tortoise strategies. The newsletter’s Tortoise portfolio, which at last word held 18 companies, led by Berkshire Hathaway and Lowe’s, returned 7.3% annualized over the past 10 years, compared with 6.7% annualized for Standard & Poor’s 500-stock index. (All returns are through October 31 unless otherwise noted.)
Morningstar’s DividendInvestor newsletter ($59.95 quarterly, $189 for one year) is also appealing. Its Dividend Select portfolio yields 4.0%, and over the past 10 years it outpaced the S&P 500 by an average of 2.1 percentage points per year.
Dividend.com (premium membership $149 per year) is geared toward investors looking for income. To compile its list of “best” dividend stocks (there are currently 20), it uses a proprietary formula to rank stocks by such factors as the number of years a company has paid a dividend, the frequency of dividend hikes, and the likelihood that the firm will continue to pay and boost its payout. Use the list as a starting point for picking stocks; it is not designed to be a portfolio.
Reality Shares’ DivCon is another good—and free—source of ideas for dividend payers. Reality Shares, a sponsor of ETFs, rates 1,200 dividend stocks on a scale of one (dividend cuts are imminent) to five (hikes are imminent).
Before the internet and the deluge of information it brought forth, the bible for stock research was the Value Line Investment Survey. The survey—known in the old days for thick binders filled with one-page reports on some 1,700 stocks rated 1 (best) to 5 (worst) for timeliness—still exists but mostly online. The website also contains tools for charting, screening and building watch lists. Value Line offers an array of digital subscriptions, from $199 per year to $795 per year. The more you spend, the more data and research you get.
Mutual funds and ETFs. Morningstar (14-day free trial for premium access, $199 for one year, $339 for two years) offers comprehensive research on mutual funds and ETFs, as well as on stocks. Basic information on the website is free. But a premium subscription buys access to, among other things, analyst reports for more than 2,500 securities, including funds, ETFs and stocks, and the Portfolio X-Ray, a tool that allows you to see how diversified your mutual fund portfolio is—or isn’t. It can show, for example, what percentage of your portfolio is in Apple. Morningstar also produces two fund-related monthly newsletters that offer advice, analysis and model portfolios: FundInvestor ($42.95 per quarter, $135 per year) and ETFInvestor ($59.95 per quarter, $189 per year).
Vanguard clients who want guidance should look at the Independent Adviser for Vanguard Investors (new customers can get a one-year subscription for $99.95). Editor Wiener rates every Vanguard fund and ETF as “buy,” “sell” or “hold,” and he recommends five model portfolios (one of which holds only ETFs). The portfolios have performed well, but over the past five years, the ETF-only portfolio’s 11.7% annualized return lagged the S&P 500 by an average of 1.9 percentage points per year.
Fidelity Monitor & Insight ($159 for the first 15 months, then $159 per year) analyzes and rates Fidelity mutual funds and ETFs. The editors of Monitor & Insight also track four model portfolios. The Select portfolio, consisting solely of Fidelity Select sector mutual funds, returned 13.0% annualized since its inception in 1988, compared with 10.0% for the S&P 500.
ETF.com offers research, analysis and tools for, not surprisingly, ETF investors. Under the ETF Channel tab of the website, you can home in on specific kinds of funds—for example, those that invest in biotech, energy or European stocks. The biotech channel compares 17 ETFs focused on that sector by performance, fund size and expense ratio. It also rates six of the ETFs (four get an A, one gets a B, and another gets a D).
Bonds. According to one online broker we polled, fewer than 10% of its customers buy individual bonds. That probably means there’s a pressing need for good advice on this front (see Why You Should Buy Bonds on Your Own).
Novices and experts alike will appreciate InvestinginBonds.com, a source for bond market data, news and commentary. It is packed with information provided by big players such as Goldman Sachs, JPMorgan Chase and MarketAxess, an online trading platform for institutional investors.
Chances are you can get a lot out of your broker’s website, too. For example, Fidelity—top-ranked in our latest survey of online brokers (see Best of the Online Brokers)—has an Understanding Bonds tab that provides guidance on bond basics. The website also walks investors through the process of building a laddered bond portfolio.
Investors who want up-to-the-minute data on bond prices have several resources. Finra (the acronym stands for the Financial Industry Regulatory Authority, the self-regulatory arm of the brokerage industry) provides pricing information for corporate and government bonds in the Bond section of the Market Data website. Emma, which stands for Electronic Municipal Market Access, provides data on municipal bonds.
Finally, we would be remiss if we didn’t mention our monthly newsletter Kiplinger’s Investing for Income ($199 for one year). Taking the long view, editor Jeffrey Kosnett (who also writes the “Income Investing” column for this magazine) presents strategies for boosting your cash yield. He explains, in plain English, how to analyze and invest in a variety of income-producing securities, including dividend-paying stocks and funds that own them, master limited partnerships, real estate investment trusts, preferred stocks and funds that invest in high-yielding junk bonds.
Market commentary and more. Our favorite source for forecasting the direction of the market is Investech Research (four-issue trial, $39; one year, $175). Publisher Jim Stack analyzes economic and market data to recommend stock allocations in his monthly newsletter.
The website of the American Association of Individual Investors ($29 per year for basic membership, $99 for four years, and $390 for lifetime membership) is chock full of investing tutorials on the basics, such as how to pick dividend stocks, read a balance sheet and build a laddered bond portfolio. AAII’s Shadow Stock portfolio, so-called because it holds shares in small, undiscovered companies that trade “in the shadows of Wall Street,” as AAII editor Charles Rotblut puts it, outpaced the Russell 2000 index, which tracks small-capitalization stocks, over the past 10 years by an average of 3.9 percentage points per year.
Personal Capital, a money management firm, offers terrific suggestions on its website for how to allocate your assets. You’ll have to set up an account (it’s free) that aggregates all of your investment accounts, including your 401(k); it won’t take you long, and it’s worth it. The service does a good job of helping you understand (in tables and charts) what’s in your portfolio and how it’s performing in comparison with various benchmarks. The setup involves answering a few questions, which are used to establish a target allocation for you. You can compare the current allocation of your portfolio with the one recommended for you by the website’s Investment Checkup tool. (For more on Personal Capital, see Budgeting Tools for Every Style.)
David Swensen has been chief investment officer of Yale’s endowment since 1985. For the 30-year period through June 2016, the endowment, which now holds $25.4 billion, returned 12.9% per year, compared with 9.8% annualized for the S&P 500. The Investment Policy chapter in the endowment’s latest annual report details how the money is divvied up by asset category (including U.S. stocks, foreign stocks, bonds and real estate, among other classes).
Finally, Warren Buffett writes a widely read “Chairman’s Letter” in the annual report of Berkshire Hathaway, the conglomerate he heads. In small ways, the letters lay out the Oracle of Omaha’s approach to investing. His latest missive, for instance, includes a history of the auto insurance business in the U.S. (Berkshire owns Geico), as well as timeless advice such as, “Much of what you become in life depends on whom you choose to admire and copy.” Links to every letter dating back to 1977 can be found here.
Top investing blogs
Economist and strategist Ed Yardeni provides sophisticated yet accessible analysis of unfolding economic, political and market-related developments in Dr. Ed’s Blog. Topics include corporate earnings trends, analysis of the Federal Reserve, and commentary on the stock and bond markets.
Vitaliy Katsenelson is a value-oriented money manager for Investment Management Associates, in Greenwood Village, Colo., who is passionate about investing. He writes one to three educational “missives” a month for his firm (sign up to receive his articles at http://imausa.com). One recent article made the case for buying stock in Discovery, the media company. Another focused on “The Dangers of Dividend Obsession.”
Schwab’s website includes “Insights” on markets and the economy. It is filled with (relatively) jargon-free market analysis by the firm’s top strategists, including Jeffrey Kleintop and Liz Ann Sonders. In one recent piece, Kleintop explained why he thinks neither a recession nor a bear market is likely to occur over the next 12 months.