If you’re reading this, you likely have received email offers from various investment advisories or financial publishers. And once you bite, a torrent of emails from previously unheard-of services and publications follows. These marketing efforts are excessively frequent, intentionally secretive, and filled with exaggerations, even when the service itself is legitimate and worthy of subscription.
How do we separate the wheat from the chaff so we can make some dough?
First, allow me to plug Sure Dividend who is very likely the source of your arrival here. I do not receive any compensation from Sure Dividend and pay for their service just like anyone else. Sure Dividend produces excellent publications and a quality research database. They provide real value at a reasonable cost AND their marketing materials are never hyperbolic or excessive. Sure Dividend is at the good end of the spectrum.
Fidouchiaries
At the other end of the spectrum there are the publications I can’t even name, because I steer them into spam. You can just tell these emails are off. They alarm right from the get-go with attention getting symbols like lightning bolts in the subject line and headlines that speak of doomsday for the dollar or secret presidential meetings. Clearly, these are not legitimate advisories, and best-case scenario is you’ll be out $50 because you just had to learn the ticker symbol of the company whose working on some sort of robot butcher that will replace an entire industry. Of course, you’ll also receive several notices from Experian and Credit Karma that your email was found on the dark web. Though I know it isn’t true, for the sake of moving on, I will assume we can all spot these frauds.
On the Spectrum
Between the extremes, there are a host of other investment advisories or services. If you’re willing to watch a scripted interview or monologue video of unknown length (but certain to be closer to an hour than you ever imagined)1, you’ll be presented with an offer to subscribe to the service for a year, or two years at less than double, or for perhaps the price equivalent of 3 full years, a lifetime! You can’t beat that.
After you’ve seen a few of these and perhaps even subscribed to some, you’ll develop a good eye for what strategies the service is employing. It could be just buying momentum stocks, or takeover candidates, or the next Nvidia, or really any approach to stock buying you might imagine. There will typically be plenty of detail around certain promising stocks, but for which they refuse to reveal the ticker symbol2. Usually if the service does not involve options, it will say so to help sell the simplicity of the service. Some services aren’t about owning stocks at all and will trade options exclusively. They’ll typically emphasize a specific option strategy that they employ or perhaps a variety of strategies, ranging from poor man’s covered calls, to selling credit spreads, to iron condors and beyond.
What they all have in common is the promise of incredible gains and returns. Mind-blowing figures. Graphs with no dates showing strong positive uptrends. Trade after trade with returns like 406% in 60 days and 247% overnight! The specificity of the percentages lends credibility, but the totality of it all seems too good. Adulthood has brought some skepticism to claims like this and so, you begin to question those claims. But really, the claims as presented are probably legitimate. It is what has not been said that matters. Omissions. Where are the trades that didn’t work out? How much had to be risked? What were the odds of these wins a priori?
El Diablo
The devil is in the details of course. And the details can only be had by actually getting out the credit card. Sometimes we really want to know the details even if we’re acutely aware that the promises are exaggerated and highly unlikely. Sometimes an advertisement is simply irresistible3. My advice? Pull the trigger, but only if you can get your money back. Most of these services have a money back guarantee, not of the money you lose from their recommendations, but for the subscription premium. So, when you sign-up, put the expiration date for the refund in your calendar with an alert.
Transparency
As a member, you’ll likely get access to the website where you can view an archive of newsletters, trade recommendations, and other materials as promised in your subscription. No doubt some of it will be a disappointment. You’ll undoubtedly see the current portfolio of holdings and any active trade recommendations, but before you start putting money into play, look for a historical record of the completed trades. If you can’t find it, contact the service and ask if they’ll send it to you.
Just seeing how a current portfolio of holdings has performed is not the whole story. First, a lot of marketing drives for a service kick-off only after extraordinary results have been achieved. This is a form of publication bias. The marketing blitz of emails will boast of the returns when the results are out of the ordinary to the upside. It makes for easy advertising. But could they have advertised what might have been very poor returns just two months before? Not bloody likely. Second, portfolio managers are wise to cut losses frequently so that their appearance in the active portfolio doesn’t bring the mood down. If all you ever see is an active portfolio of positions in the green, you’ll never have a true understanding of how the service is performing overall.
The truth is, not every service tracks performance let alone allows a subscriber to see it.
Recently, I tried out a service which provides three option trades every week. There were no active trades listed in the portfolio. I found that peculiar, but once I saw the first set of trades (purchasing calls) I could see they might all be closed within a week. There were instructional videos for those interested in learning the technical conditions that need to exist before the service’s creator would recommend a trade. There was a list of all the previous trade alerts, but unless I wanted to spend the remainder of my life pairing up each sell alert with its historical buy alert, I would never be able to ascertain what the track record of this service was. So, I emailed the company and a couple of days later I received a pdf of all the trades going back for over a year. My assumption was that these were all the trades, but I could never know for sure. I dumped them into Excel and cleaned up the data so that I could summarize the results.
The results were … not good. There were impressive win streaks. In fact, I recall the presentation saying they started the year with 23 consecutive wins and by golly that was true. But the occasional losses were disproportionately larger in magnitude. The overall record for someone trading just one contract per trade since inception would have lost a few thousand dollars. This was a deal breaker for me. In the short amount of time I spent on the site before I received a refund, I learned some interesting ways to combine a couple of uncommon technical studies with a simple option strategy. I believe the individual running the service knows his stuff and very likely still makes money doing his thing. My guess is that what he can do on his own, simply does not translate well to a service that has to be followed by novices who shouldn’t be doing anything other than sinking money into an index fund. In other words, something about this guy’s skill just cannot be passed on successfully in trade alerts. The important thing is this advisory shared their track record.
Conclusion
Over the years, I have tried out close to two dozen services but have stuck with less than a handful. I received full refunds on those I cancelled. Those that I stuck with maintain a list of all their trades, good and bad, and the good far outweigh the bad. You may be wondering why very good services led by experts in their strategies would use hyperbolic, aggressive marketing strategies. The simple answer is that they’re just one service offered by a much larger publication company. The subject matter expert makes the trade recommendations and controls the information provided to members, but the marketing is run by the larger entity. They run their approach by the service provider for the accuracy of the claims, but the details are left out because they just don’t sell. Often times, the provider of the service is not well-informed of the marketing materials going out.
There are some very good investment advisories and financial publications run by knowledgeable individuals, providing real educational value and delivering excellent results, despite the rather off-putting style of the marketing approach. They’re just not easy to come by.
Royal Dividends has assembled a portfolio with exposure to every sector, is comprised of mostly Dividend Kings, yields nearly 4%, and occasionally augments the dividend income with covered call premiums. The performance has been strong and with less volatility than the overall market. Not only that, Royal Dividends is fully transparent. Every trade post I’ve written is still accessible. The Performance page lists every active position AND every closed position, all in one easy-to-read, brilliantly formatted table. Better still, because I have no ambition, and no real knowledge of how to monetize the website, it remains ad-free and premium free.
- Quite often if you watch the video for a couple of minutes, the mere ‘threat’ to close the webpage triggers an offer. As soon as the mouse pointer hovers over the ‘X’, the offer to return to the presentation or to read the transcript appears. The transcript of the presentation is the far better option. You can quickly scroll through the presentation and find out, in a fraction of the time, exactly what is really being offered and for how much. However, you do want to give the video a few minutes before faking the close. I have found that if you try too soon, the offer won’t materialize. ↩︎
- Now you can plug straight into an Ai chatbot, the description of a company copied straight from a transcript that has intentionally omitted the ticker symbol of that company, and it will provide you the ticker and back up its ‘guess’ with sources. I have used Microsoft Edge’s Copilot (free) to successfully determine a ticker symbol several times. ↩︎
- I would have included the link to the official video of Robert Palmer’s ‘Simply Irresistible’, but that content is distracting. ↩︎