Many people for several different reasons subscribe to newsletters to acquire stock tips and ideas. This can assist in speeding up the method of finding great stocks to incorporate in your investment portfolio.
For many people though, this is just a waste of time. Majority of the newsletters do not inform their subscribers when they must let go of their stock suggestions. Thus, the issue of whether to sell up the stock is left with the confused subscriber. For this reason, if the subscriber doesn’t know how to manage his stocks, things may turn into havoc. Though the stock idea purchased may profit for a particular period of time, in the usual progress of price fluctuation, it may go down as well to eliminate any potential gain.
What is being discussed here, definitely, is money management. A “great stock” idea is only a portion of the equation to generating money through stocks; since stocks increase and decrease in value. Therefore, timing is just as essential as choosing a good stock.
In reality, newsletters do not point out stops of targets on their suggestions for a reason. It may open up several “cracks in the armor” because many stocks become financial loses; and they would instead have the liberty to broadcast their stock picks that were already up than to state several stopped out prior to going up, or plunged back after being up. Keep in mind that the real business of marketing newsletters that contain hot stock market tips is plainly about selling newsletters.
Stock Market Newsletter Offers
The following are a few ads you may stumble upon if you have seen newsletter offers:
- “Take advantage of our stock picks that go up to 110%!”
- “We suggest ABC stock to our subscribers and it has skyrocketed up to 150% since the last recommendation!”
- “Many of our readers have seen our stock picks double up in the past three months!”
If the above advertisements sound very familiar to you, you must be aware that all of these claims don’t talk about selling to receive real profits. Regrettably, many readers don’t understand this and all the writers for newsletters are simply quoting a few of their picks, which had procured great runs at some instance. Readers always still have the task of uncovering the right time to sell.
An investor doing good money management in general will perform much better even picking random stocks than an investor opting to choose from a list of stocks in confirmed up market trends without any plan for money management.
There is a traditional scheme that stock brokers utilize to acquire new clients. Most of the time, they will cold call many potential clients and just provide them a stock tip. The client will be told that a particular stock will significantly skyrocket in the near future and they must purchase it. No sales pressure will be hard-pressed on the client and the tips for stocks are furnished to show that the broker understands what he or she is conferring. After some time, the client will be called back again and questioned about the amount of money he generated on the stock tip. However, after a few conversations the broker will provide the client another top stock pick and inform him that it will perform well soon.
Thus, the broker will again call the client after a short period of time and will inquire how much money he generated via the tip. In fact, it is not really important if the client had in reality purchased stocks or not. The broker’s strategy is to appear as though he is really knowledgeable in what is going on in the stock market and the client must open an account soon. The client is not aware though that the broker also told similar stock picks to all other clients.
Stock Newsletter Strategy
Newsletters use this strategy as well by exaggerating their present portfolio and promoting how much it is up. While losers might soon disappear once recommendations are no longer given.
There is no “overnight” magic in making money. Always check any resources that you wish to base your moves when trading stocks.