Reason #1 for Buying Investing Newsletters — You Have More Confidence In Decisions That Require You to Spend Money
Most newspapers make more money from advertising than from subscription fees. Why don’t they give the newspapers away for free and thereby increase the number of readers they can deliver to advertisers? Because people don’t respect information they get for free. Advertisers will pay more to be in a publication for which a charge is imposed because people have more confidence in information for which a charge is imposed.
You want to have confidence in your investing decisions. To do so, you need to have confidence in the sources of information you rely on to make your decisions. It’s possible today to get a good education in investing without paying a dime. There are many fine books available at the library. There are many fine web sites available on the internet. The problem is — How do you separate the good information from the bad?
One way to persuade yourself that the information you are relying on is good is to pay for it. Buying investing newsletters is a relatively low-cost way to do that.
You don’t have to buy investing newsletters to obtain good information on how to invest. It’s not a requirement. I don’t see it as such a terrible thing to do, however. Knowing that you paid money for a newsletter might make you feel obligated to read it each month. Reading it each month might really make you better informed as to the the theory underlying your investing strategy. Given how much money is at risk in your effort to make good investing decisions, the subscription price might be a small amount to pay for the benefits obtained.
Reason #2 for Buying Investing Newsletters — They Permit You to Take Credit for Your Investing Successes
There’s a good bit of luck involved in investing. Those who invested in U.S. stocks in the 1980s and 1990s found it difficult to lose money. Those who were fully invested in 2000 have found it hard to stay even with those invested in far safer asset classes in the time since. Timing is everything (but yet they tell you that you can’t time the market!)
If you lose, you lose; that’s the fault of the market. If you win, you’d like it to be your “fault.” If you bought investing newsletters, you’ve got a credible claim to persuade yourself that you did something to generate those nice returns you obtained. Buying investing newsletters transforms investing success from something that just happened to something that you made happen.
There is an element of kidding yourself that goes into this, of course. But is that so terrible? If you start thinking that your good decisions make you the world’s greatest investor, it’s terrible. If you just permit yourself a little pat on the back for doing reasonably well, there’s little harm in feeling a little better about yourself than you would otherwise feel. There are more expensive ways to bring on good feelings about yourself than paying for investing newsletters.
Reason #3 for Buying Investing Newsletters — They Provide You with Access to a Friendly Voice
Good salespeople can make almost unlimited amounts of money. The key to good salesmanship is making people feel comfortable with decisions to spend money.
I’m not knocking it. Our economy is a consumer economy. We need to get people to buy things to keep the wheels spinning. Salespeople make things happen. My personal and highly biased view is that journalists should get paid a whole big bunch more than salespeople. Still, I kinda sorta see why salespeople usually get paid a lot more. A journalist can write the most important book ever written and it does no one any good unless a salesperson gets someone to buy it. Salespeople make things happen.
The usual way in which people are persuaded to purchase stocks is through stockbrokers. Investing newsletters can provide the same general service at a lot less cost. Again, there’s no requirement to buy investing newsletters to prompt you to buy stocks. But will you really make the purchases without first hearing the friendly voice? Or do you need the friendly voice offering reassurance to get the transaction completed? Investing newsletters provide a friendly voice at a relatively low cost.
Reason #4 for Buying Investing Newsletters — They Foster Learning Through Repetition
Say that you happen to come across an article on the internet that provides outstanding answers to many of your investing questions. How much good does that article do you?
There’s a good chance that the article doesn’t do you that much good.
If you return to that web site (hint — bookmark me now while you’re thinking about it!), it can do you a lot of good. If you only read the amazing article one time, the message is not going to sink down deep to where it exerts a big influence on your investing decisions. Humans learn through repetition. You need to hear good information not one time, but two times, three times, four times, five times, six times, seven times. The more times the better.
Most investing newsletters provide the same general information over and over again. That’s a rip-off, in one sense. In another sense, it’s a good thing. If the information is good, you are better off being exposed to it twelve times than you are being exposed to it one time. Newsletters that repeat a good message thereby make it more likely that that good message will result in good long-term investing returns for you.
Reason #5 for Buying Investing Newsletters — Doing So Makes You Part of a Community
Information is everywhere. What investing newsletters are really selling is access to a community. When you buy the Value Investor Newsletter, you become part of the value investor community. When you buy the Momentum Investor Newsletter, you become part of the momentum investor community.
Why is community so important? Because you sense what you are up against in trying to learn how to invest effectively. Millions of others are doing the same thing and we cannot all obtain better-than-average returns. If you need to process all the information needed on your lonesome, you’ve got a big job. If you have a community behind you helping you out, you just might make it afterall.
It makes sense to want to tap into the collective wisdom of a smart investing community and it’s worth paying for investing newsletters to do so. The tricky part is avoiding the bad communities and identifying the good ones. There really is power in the community concept and, if you come to identify with bad ones, that power goes to work against you.
Reason #6 for Buying Investing Newsletters — They Give You Ammunition to Use to Discredit “Enemy” Strategies
Communities not only bring good stuff in. They keep bad stuff out. People buy investing newsletters because they provide them with “answers” to points raised by those advocating alternate investing strategies.
The danger of groupthink enters the picture here. You can often learn a lot by giving “enemy” strategies their due. When your favored strategy holds up in the face of criticism, seeing it do so gives you that much more confidence in it. When it fails to do so, seeing it fail to do so provides you with the warning that you need to make changes in your strategy.
I’ll pay more for investing newsletters that are fair in their consideration of alternative strategies than I will for those that encourage cult-like acceptance of one school of thought. Investing newsletters that encourage thought are more likely to produce good fruit in the long-term.
Reason #7 for Buying Investing Newsletters — They Provide You With Bite-Sized Learning Bits
The biggest cost of a book is the time it takes to read it. Investing newsletters are short. That’s their primary appeal.
Reason #8 for Buying Investing Newsletters — They Provide an Edge
You’ve probably heard the joke about the one hunter who asks the other hunter why he is tying on his sneakers. The one tying on his sneakers says that he’s seen a bear heading in their direction. The other fellow says: “Are you crazy? You’re not going to be able to outrun a bear!” While taking off, the other fellow shouts back: “Oh, I figure that I don’t really need to be able to outrun the bear. I figure that if I can outrun you, the bear will be otherwise occupied for awhile.”
That’s the way it works. Investing is a zero-sum game. There is only so much in the way of returns being generated and lots of investors trying to earn their share of them. You need an edge. Even a small edge can be worth a lot of money if it is enough to put you ahead of the mass of investors.
Most of the promised edges don’t pan out, of course. We keep looking for them, however. That’s one of the reasons why we buy investing newsletters. It’s like drilling for oil. If one of ten investing newsletters you buy provides you with a significant edge, it can bring in enough money to more than pay for all the others.
Reason #9 for Buying Investing Newsletters — It’s a Low-Cost/Low-Risk Decision
Investing decisions are hard. There are so many of them that need to be made. Most of them cost money. Most of them involve risk.
The decision to buy an investing newsletter doesn’t cost much money and doesn’t involve taking on much risk. It’s a relief to be able to make a decision like that every now and again.
Reason #10 for Buying Investing Newsletters — They Provide a Filter on the Investing Information You Need to Review
If you trust the author of your investing newsletter, buying the newsletter can help you avoid having to read lots of other material. Investing newsletters are a filter that many find it worth some money to pay for.
Reason #11 for Buying Investing Newsletters — They Provide Educational and Entertainment Value
Lots of people buy investing newsletters at least in part for non-investing reasons. They educate themselves on strategic thinking that can be applied in other areas of life. Or they entertain themselves with amusing asides or well-written explanations of investing developments. It doesn’t make sense to pay the price of an investing newsletter just for the non-investing education provided or the entertainment value provided. But these can be nice extra rationales for buying investing newsletters that deliver the more obvious dollars-and-cents benefits too.