Are Investment Research websites worth their premiums?
Anyone who claims they can consistently beat the market and asks you to pay them to tell you how is a liar. This cannot be done, as the market adjusts itself. There's nothing they could possibly learn that analysts and institutional investors don't already know. They earn their money through the subscription fees, not through capital gains on their beat-the-market suggestions, that means that they don't have to rely on themselves to earn money, they only need you to rely on them. They have to provide proof because they cannot lie in advertisements, but if you read carefully, there are many small letters and disclaimers that basically remove any liability from them by saying that they don't take responsibility for anything and don't guarantee anything.
"No. I glanced through the article you linked to.  It's quite lengthy, but not compelling. I'd not lose any sleep over this.  Others with far better credentials are making the opposite claim, that life is good and the Dow on its way to 20,000.   Back to this guy - StansberryResearch.com Reviews – Legit or Scam? offers a look at this company. Stansberry calls his company ""one of the largest and most recognized investment research companies in the world"" but references to his firm call it a clearinghouse for other authors newsletters.  Why would you give any more credence to his ranting than any other extreme prognostications?  I suppose if I told you I never heard of him it would be pretty meaningless. I certainly haven't heard of every financial writer. But if he's one of the most recognized, you'd think I might have. Note, I've edited since seeing I was downvoted. But to the question author, you might want to summarize your questions in the future instead of linking to a video or  13,000 word rant. (when you click to shut the video, the text is available.)" Any investment company or online brokerage makes investing in their products easy. The hard part is choosing which fund(s) will earn you 12% and up. "duffbeer's answers are reasonable for the specific question asked, but it seems to me the questioner is really wanting to know what stocks should I buy, by asking ""do you simply listen to 'experts' and hope they are right?"" Basic fundamental analysis techniques like picking stocks with a low PE or high dividend yield are probably unlikely to give returns much above the average market because many other people are applying the same well-known techniques." "I think the author is really on point here. Just read r/investing or seekingalpha or some other forum with low barriers to entry and you see the same phenomena. People like drama, and there's a convergence towards dramatic opinions and extremes. The scariest part is that while stock valuations are fairly subjective, it is very common to see top reddit comments that are verifiably false, on financial subjects or otherwise.  At some point, I'd really like to take a web scraper to r/investing and see what the relationship between comments on certain companies and their stock performance is. Similarly, it'd be interesting to see if people who are right tend to stick around/people who stick around are more often correct. It'd also be interesting to compare the ""reddit consensus"" with actual analyst consensus and to see where it differs. It might make a good master's thesis.   On the other hand, I'm not convinced that the traditional punditry is necessarily better. Professionals are generally more articulate and ought to be able to highlight the relevant details in a company or sector. However, the 2 minute segments they have with these professionals on CNBC are basically just noise when compared with hour long analyst calls, and I've never found them particularly useful for extracting more than a very 1000-kilometer high view on a topic that I know nothing about.  I think longer form publications like actual interviews, where the guests are on for a longer period of time, or print articles from WSJ/FT/etc. are still good quality, but even financial media has really been catering to the lowest common denominator with free or televised content.  In any case, I think this really reduces down to an issue of critical thinking. Random internet comments can actually be really insightful, or garbage, but most people can't discern the two. I think the same applies to punditry too, however." "Yes, there is a very good Return vs Risk graph put out at riskgrades.com.  Look at it soon, because it will be unavailable after 6-30-11.  The RA (return analysis) graph is what I think you are looking for. The first graph shown is an ""Average Return"", which I was told was for a 3 year period.  Three period returns of 3, 6 and 12 months, are also available.  You can specify the ticker symbols of funds or stocks you want a display of.  For funds, the return includes price and distributions (total return), but only price movement for stocks - per site webmaster. I've used the graphs for a few years, since Forbes identified it as a ""Best of the Web"" site.  Initially, I found numerous problems with some of the data and was able to work with the webmaster to correct them.  Lately though, they have NOT been correcting problems that I bring to their attention.  For example, try the symbols MUTHX, EDITX, AWSHX and you'll see that the Risk Grades on the graphs are seriously in error, and compress the graph results and cause overwriting and poor readability. If anyone knows of a similar product, I'd like to know about it.  Thanks,  George" I spent a while looking for something similar a few weeks back and ended up getting frustrated and asking to borrow a friend's Bloombterg.   I wish you the best of luck finding something,  but I wasn't able to.   S&amp;P and Morningstar have some stuff on their site,  but I wasn't able to make use of it.  Edit: Also,  Bloomberg allows shared terminals.  Depending on how much you think as a firm,  these questions might come up,  it might be worth the 20k / year "This functionality is widely available, not only on brokerage sites, but also financial management and even financial information sites.  For instance, two of the latter are Google Finance and Yahoo Finance.  If you are logged in, they let you create ""portfolios"" listing your stocks and, optionally, the size of your holdings in that stock (which you don't need if you are just ""watching"" a stock).  Then you can visit the site at any time and see the current valuations." No I get that.  But if you don’t want risk, then buy bonds.  Long term an S&amp;P Index has very low risk.  On the other hand, actively managed funds have fees that take out a ton of the gain that could be had.  I don’t have time to look for the study but I read recently that 97% of actively managed funds were outperformed by S&amp;P Indexes after fees.  Now I don’t know about you but I think the risk of not picking a top 3% fund is probably higher than the safe return of index’s. "Even if we accept these claims as being true, neither the fact that their clients are more confident, nor the fact that people who use an investment professional have a higher net worth tells you anything about the value of the service that such professionals provide.  Judging a service provider is a complex matter where you take into account multiple variables but the main ones are the cost and quality of the service, the cost and quality of doing it yourself and the value you assign to your time and effort. I think it's highly likely that professional gardeners will on average maintain larger gardens than those who do their own garden work. And any professional will have more experience at his profession than an average member of the public. But to determine if hiring a professional is objectively ""better"" requires defining what that word means. Finance is a bit weird in that respect since we actually do have objective ways of measuring results by looking at performance over time. But since the quotes you give here don't address that at all, we can simply conclude that they do not make the case for anything related to financial performance." I have used TradeKing for a couple of years now and love it.  It really is a great site.  They hold an IRA trading account for me and have been helpful in rolling money into that account, and with answering the occasional question. Previously I have used Scottrade and found that TradeKing is a much better value. The following have been recommended to me for the UK: When I was doing my investigations, all had good reputations but Interactive Investor looked to have the nicer service and their fees seemed a bit more reasonable.  TD Waterhouse has the advantage of a number of sites serving local markets (TD Ameritrade for the US, for instance). Aswath Damodaran's [Investment Valuation 3rd edition](http://www.amazon.com/Investment-Valuation-Techniques-Determining-University/dp/1118130731/ref=sr_1_12?ie=UTF8&amp;qid=1339995852&amp;sr=8-12&amp;keywords=aswath+damodaran) (or save money and go with a used copy of the [2nd edition](http://www.amazon.com/gp/offer-listing/0471414905/ref=dp_olp_used?ie=UTF8&amp;condition=used))  He's a professor at Stern School of Business. His [website](http://pages.stern.nyu.edu/~adamodar/) and [blog](http://aswathdamodaran.blogspot.com/) are good resources as well. [Here is his support page](http://pages.stern.nyu.edu/~adamodar/New_Home_Page/Inv3ed.htm) for his Investment Valuation text. It includes chapter summaries, slides, ect. If you're interested in buying the text you can get an idea of what's in it by checking that site out. The Motley Fool is generally regarded as relatively legit, at least in that they're not likely to do anything outright fraudulent and they definitely have reasonably in-depth content to provide you.  The Motley Fool makes a fair amount of money off the subscriptions, though, and they do hawk them quite violently. If I didn't have a generally good opinion of them to begin with, I'd have been completely put off as well. It's pretty shameful. I don't think it's worth hundreds of dollars a year, but then again, I don't look at investing as a second career like the Fool likes to suggest, either. and this is a sure sign that their advice is worthless..  if their research was worth the paper that it is written on, they would be using that research to make money trading, instead of trying to sell their research to their clients.  how many times have we said that traders that can trade will trade, but that traders that can not trade, they will teach.  and the fact that they are charging so much for their research should be a sign or an indication that there is perhaps a sense of desperation in this organization to quickly raise some money quickly and desperately.  people that dont really know where the treasure is buried at will sell treasure maps..  people that do know where the treasure is buried will dig for buried treasure. "Generally, yes.  Rather than ask, ""why are these guys so cheap?"", you should be asking why the big names are so expensive. :) Marketing spend plays a big role there. Getting babies to shill for your company during the super bowl requires a heck of a lot of commissions. Due to the difficulties involved in setting up a brokerage, it's unlikely that you'll see a scam. A brokerage might go bankrupt for random reasons, but that's what investor insurance is for. ""Safeness"" is mostly the likelihood that you'll be able to get access to your funds on deposit with the broker. Investment funds are insured by SIPC for up to $500,000, with a lower limit on cash. The specific limits vary by broker, with some offering greater protection paid for on their own dime. Check with the broker -- it's usually on their web pages under ""Security"". Funds in ""cash"" might be swept into an interest-earning investment vehicle for which insurance is different, and that depends on the broker, too. A few Forex brokers went bankrupt last year, although that's a new market with fewer regulatory protections for traders. I heard that one bankruptcy in the space resulted in a 7% loss for traders with accounts there, and that there was a Ponzi-ish scam company as well. Luckily, the more stringent regulation of stock brokerages makes that space much safer for investors. If you want to assess the reliability of an online broker, I suggest the following: It's tempting to look at when the brokerage was founded. Fly-by-night scams, by definition, won't be around very long -- and usually that means under a few months. Any company with a significant online interface will have to have been around long enough to develop that client interface, their backend databases, and the interface with the markets and their clearing house. The two brokerages you mentioned have been around for 7+ years, so that lends strength to the supposition of a strong business model. That said, there could well be a new company that offers services or prices that fit your investment need, and in that case definitely look into their registrations and third-party reviews. Finally, note that the smaller, independent brokerages will probably have stiffer margin rules. If you're playing a complex, novel, and/or high-risk strategy that can't handle the volatility of a market crash, even a short excursion such as the 2010 flash crash, stiff margin rules might have consequences that a novice investor would rather pretend didn't exist."