How to Improve Your Market Returns in 2014

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Businesswoman with two computers, aerial view on a trading floor
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With the end of the year fast approaching, there's no better time to review your portfolio's performance and, if need be, take some steps to ensure that your returns for 2014 are the best they can be. One simple, cost-effective way to do that is to subscribe to a market service.

If you're like the average investor today, you own a mixture of asset classes, which might include CDs, money market funds, T-bills, bonds, mutual funds, and ETFs, all of which are managed by third parties and are passive by their nature. But it's often the performance of the individual stocks in your portfolio -- the assets you manage -- that weigh most heavily on your overall returns. However, unless you're a full-time investor, it's hard to find the time to do the work and analysis needed to discover those winning stocks -- and to do it on a consistent basis. This is where a market service comes in.

These services usually fall into two categories -- trading or investing -- and could be considered Cliffs Notes for the market, but without the stigma. They're essentially subscription services, usually ranging from $49 to $99 a month, which deliver distilled market knowledge right to your inbox or RSS feed. The difference between these services and a traditional investment service or newsletter is that they aren't the recommendations of a faceless research department from a large brokerage or investment bank.
This new generation of market services are produced by individual traders and investors who are more accessible, accountable and transparent than ever before.

With the advent of the Internet, and then even more so with the explosion of social media, full-time traders and investors began to realize that they could monetize the work that they were already doing. This often involves spending 40 hours a week, or more, watching every movement of the markets (remember, futures, currencies and international markets are open around the clock), and looking at hundreds or even thousands of charts in order to find the best opportunities to make money. By offering the fruits of their labor to the public for a fee, they're able to create a new revenue stream that's not dependent on the markets and that helps to smooth out their equity curve.

So for the price of admission, you usually get a nightly watch list of potential investment candidates, complete with analysis and strategy suggestions. Most services will also have regular blog posts covering market education. In addition, many services offer live chat rooms during market hours where you can communicate with the service's author and watch him make trades in real time, as well as interact with other like-minded traders and investors. This is an excellent way to exchange ideas about the markets and oftentimes end up with a virtual mentor who can help you improve your performance and returns.

Though purists may claim that this isn't "true" investing -- that you're being "given the fish" instead of "learning how to fish" -- that's not the case at all.
Technology has allowed us to streamline and optimize almost every aspect of our lives. Why should investing be any different?

All you're doing when subscribing to a market service is making the process of finding great stocks more efficient by allowing someone who already does it -- and probably does it better than you -- do the heavy lifting for you. In the end, the decision to buy or sell a stock -- and how you decide to manage your positions -- is up to you. You have the final discretion and responsibility. But you'll also have a narrower, more focused, and more vetted pool of candidates to start from. That advantage in 2013 might have made the difference between being in IBM (IBM), which is down 1.9 percent for the year, and being in 3D Systems (DDD), which is up 158 percent.

Unfortunately, the world of trading services is not without its "get rich quick" types or its scam artists, so you have to do your due diligence before choosing a service. A good place to start when trying to find a quality service is in an active community like StockTwits. There it will become quickly apparent which services are worth their salt and which ones are blowing hot air. Most legitimate services will also offer a trial period where you can test them out for free to see how their performance is and if their investment style fits your own.

No man is an island, or even a peninsula, so I encourage you to give me your feedback in the comments below. I also want to hear what else you'd like me to write about, so please let me know either via Twitter or email.


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13 Comments

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dougthehed_cody

I've been reading BC Lund for several years now through his blog. He's a good trader and a very good writer. What I would suggest to trolls here like Valerie is that some of the best knowledge I have received on the stock market has come from The Kirk Report, which happens to carry a $100/year subscription. Mr. Kirk's service is an educational based service teaching individual investors how to find their way profitably through the market. Hi service is all about teaching you how to manage your own trading.

The idea that an investment service is a waste of money or a scam may or may not be factually accurate. Each service needs to be addressed on its own merits and not put under the blanket of "all investment services are scams" or simply a waste of money. Some no doubt are a waste, others however can transform your knowledge and understanding of the markets. The only interest I have in the markets is making money and enjoying my process. If a service can truly help flatten that steep learning curve, then that would seem valuable to me. The Kirk Report has been that resource for me. It helped me develop my trading strategy and provides much incite to things I would otherwise be blind to.

December 30 2013 at 4:26 PM Report abuse rate up rate down Reply
bdyftns

Doing your own homework on investing money is probably the best advice. There\'s no one more interested in your personal finances than you are.

December 30 2013 at 3:06 AM Report abuse rate up rate down Reply
hbcjoe

Purchasing good advice is a good investment. However, using that advice as a substitute for doing your own due diligence is a mistake. Good stewardship of your personal investments is a personal responsibility that requires an investment of time and money. Do it and you will be rewarded. Investing is definitely not gambling. When you gamble, goals are opposite with parties seeking to remove the adversary of their wealth. When investing, goals are parallel: companies want to make money and you want to make money. You want to find the best partners. Its not that easy but not that hard either. Help is worthwhile.

December 29 2013 at 8:00 PM Report abuse rate up rate down Reply
WILLS

The services are like the pundits - all full of advice. There is a sign that appears on many a small stores wall that says " answers free - correct answers 5 dollars". The market, be it commodities, stocks, bonds or currency, moves with conditions and if you learn to watch them and remain cautious and avoid getting greedy, you can do well. It is better to make "show" bets as you increase the odds in your favor as this policy does not make the most return it avoids great losses.
I am quite content with 18% and unless the market does a black swan in the next two days, that's about where I will be for the year.

December 29 2013 at 2:34 PM Report abuse +1 rate up rate down Reply
Richard

Best thing I can think of is to NOT PLAY THE MARKET. If you want to gamble, take a fist-full of money and visit Vegas. Put your money in more secure investments such as under your pillow protected by Smith & Wesson.

December 29 2013 at 12:09 PM Report abuse -1 rate up rate down Reply
Valerie

Individual investors should be very VERY wary of anyone who claims to be able to "predict market moves". The best minds in the investment field (who manage multi-billion dollar funds) can't do this, consistently, and neither can these so-called "services" claiming to be able to pick the next big stock winners.

One aspect that the writer of this article conveniently glosses over is that paying 99 bucks a month for this questionable "advice" is almost 1200 dollars a year, PLUS the cost of trading stocks added to that. It's hard to generate profits, if you are shelling out that much money for expenses. Potential taxes on all that trading should also be an important consideration, and that isn't even mentioned in the article.

And what is going on with the writer's belief that an internet chat room is the best place to get investment advice?? It isn't. "Interacting with other traders" in chat rooms isn't a good way to improve your investment returns. They will brag, endlessly, about their few big winners, but they will NEVER tell you about their many big losers.

The best advice?? If someone wants you to pay for their "stock picking service", get a firm hold on your wallet and run. (Want to double your money quickly?? Fold it over and tuck it back in your wallet. LOL)

If you absolutely can't resist the lure and excitement of stock trading, set aside just 10% of your investment funds for this as "fun money". For the other 90% of your portfolio, stick with the proven long-term stock winners. Those "dull and boring" blue chips aren't exciting to brag about to your friends, but their dividends and appreciating stock prices will make you rich over a period of time.

December 28 2013 at 11:23 AM Report abuse +4 rate up rate down Reply
2 replies to Valerie's comment
Brian Lund

Hi Valerie,

The only problem with your argument is that you have absolutely no idea what you are talking about.

Nothing you say has anything to do with the ideas in the article. It is not about "predicting market moves" or a "stock picking service," it is about streamlining the process of finding good stocks candidates for a fee.

How much is your time worth? Is it worth $0.68 per hour? Because if you are paying $99.00/mo for a service where they spend 40+ hours a week watching and analyzing the market, then that is what it costs. And for that minimal fee, you get the 8,000+ stocks in the market boiled down to a list of 5-10 that you can consider. That to me is the most efficient use of money vs. time that I can think of for an investor.

And I even went as far to indicate that "yes" there can be some shady operators out there, but that most legitimate ones offer a free trial.

So, you could try a service for free, see if it works for you, and if they know what they are doing, and if so, subscribe to them for pennies a day to make your life easier....

OR.....

You could just dismiss the idea completely.

You made your choice.

Thanks for reading.

-B

December 28 2013 at 12:31 PM Report abuse -5 rate up rate down Reply
1 reply to Brian Lund's comment
Valerie

Okay. I'll be blunt. A free trial of something of questionable value is wasted time. And, just for the record ---a $99 a month subscription advice service isn't "pennies a day". It's dollars a day. If you don't understand the concept of how continued "little expenses" of a few dollars here and there can have a negative effect on your investment portfolio AND your net worth --- you are missing an important factor.

Wealthy people seem to understand this concept intuitively. They don't make the mistake of telling themselves: "Oh, it's just a few bucks. No big deal." On the contrary, they watch their expenses AND their investments like a hawk.

Your article was primarily a smoke screen. You offered NO substantial proof of the value of the service you are promoting. Just a lot of vague possibilities of future opportunities of being able to get in on the ground floor of high-flying stocks. This is an old story on Wall Street. There is never any shortage of slick fast-talking opportunists looking to pick the pockets of small investors. For a price, of course. This "stock selection service" is just the latest twist on an old theme of "expert financial advice".

So, thanks for the offer. But, I don't need to be "streamlined". I very much enjoy doing my own stock research. That activity has been, and continues to be, both interesting and profitable. I know how to read a balance sheet and a corporate profit and loss statement. Also, if I want to screen stocks for specific criteria, there are many websites with search engines for this function.

Yes, you are correct in assuming that I distrust anyone who claims to be able to predict the future. NO ONE can know, with any certainty what is going to happen in the future with any kind of stock or other investment. All financial outcomes are loaded with uncertainty. All self-appointed "financial experts" are just taking their best guess.

The stock market is dominated by people who make their living by buying and selling stocks for others. And, even with all their considerable experience, these "experts" make mistakes every single day. There are NO foolproof ways to invest in individual stocks. (This is why those "boring plain vanilla index mutual funds" consistently outperform all other types of stock investments 80% of the time.)

All that having been said, the stock market is still the best place to build considerable net worth over a period of time. Dividend paying stocks can be a wonderful investment. Growth stocks can be a much larger gamble. But people need to learn to think through every investment decision by themselves. Don't allow yourself to be influenced by others promising "get rich quick" short cuts. Do your homework, research extensively, keep adding to your financial knowledge, and don't get greedy.

December 28 2013 at 9:43 PM Report abuse +2 rate up rate down
Richard

Ever think about this. If investment counselors are so good, why aren't they independently wealth, sitting in Bimini with a small (or large) cigar. If they are still working peddling investment advise, then they are obviously NO GOOD!!

December 29 2013 at 12:11 PM Report abuse rate up rate down Reply
jdykbpl45

Follow the lead lemming? Over the cliff?

December 28 2013 at 10:40 AM Report abuse +1 rate up rate down Reply
1 reply to jdykbpl45's comment
Brian Lund

Actually, most lemming outperform the market indexes.

December 28 2013 at 12:32 PM Report abuse -2 rate up rate down Reply
1 reply to Brian Lund's comment
jdykbpl45

Better than AOL at any rate.

December 28 2013 at 4:39 PM Report abuse +2 rate up rate down
alfredschrader

Sure Brian. Nice article but I have 35 years of market experience. I don't make investment advice, but I can tell you that I never buy on record highs. All the time I hear about so-called market guru's like Warren Buffett for example. Then I do some research and find their big source of funds
isn't the market but something else like in Buffett's case it's life insurance.
Did you know that less than 1% of all the life insurance policies ever written have been collected on ? The number one reason why ? Most people simply stop paying the premiums.

December 27 2013 at 2:12 PM Report abuse +2 rate up rate down Reply
1 reply to alfredschrader's comment
jdykbpl45

Brian is a wall street pimp.

December 28 2013 at 10:40 AM Report abuse +2 rate up rate down Reply
1 reply to jdykbpl45's comment
Brian Lund

Yes, but I dress well.

December 28 2013 at 12:31 PM Report abuse +2 rate up rate down