Personal Finance: A Core, All-In-One Investment Service
The best way to stay invested while keeping peace of mind is to make quality and total returns your primary focus. The shares of good dividend-paying companies provide a double benefit: (1) income that gives you a head start on total return and (2) less volatility than the broad market.
— Philip Springer, Personal Finance
Personal Finance is KCI Investing’s flagship investment service. It won Best Financial Advisory Newsletter awards in 1991, 1992, 1994-1996, 1999, 2000-2001, and 2007. And according to Hulbert’s Financial Digest – the undisputed authoritative source in evaluating newsletter performance – its investment portfolios have outperformed the overall stock market over each of the past 3, 5, and 10-year periods.
Everything You Need in One Newsletter
Too often today, when I read investment newsletters, I find niche products that focus only on a single, narrow investment style. Sure, such specialized niches are great for advanced investors looking to add extra spark to their investment returns, but for the average investor, who is seeking financial advice on how to construct a core, well-diversified portfolio, it can be frustrating. It seems as though one is required to purchase several different newsletters just to get the general investment advice needed.
No so with Personal Finance. It provides everything the average investor needs under one roof. I am amazed at the amount and scope of investment information provided. A subscriber gets access to three portfolios that cover the spectrum of basic investing styles:
(1) Growth stocks (a third of which are foreign companies);
(2) Income securities, including common stocks, REITs, preferred stocks, bonds, and cash, with a recommended percentage allocation to each type; and
(3) Mutual funds and ETFs, including stock funds, bond funds, and “special situation” funds.
In Part 1 of my series on Asset Allocation, I explain how wealth generation requires diversified investing that avoids “the big loss.” With three portfolios to pick and choose from, any investor can construct a well-balanced portfolio of growth stocks and income securities that include real estate and international exposure. Personal Finance is not for traders, but is meant for long-term investors. As I wrote in The Growth vs. Value Debate, growth stocks make the best buy-and-hold investments and dividend-paying income stocks are the best defense against bear markets. Put them together, and you’ve got a powerful portfolio. Furthermore, the U.S. represents less than half of the world’s equity capital, so it is important to invest throughout the world, and Personal Finance does just that.
Three Advisors for the Price of One
The breadth of investment recommendations is just one of Personal Finance’s benefits. I also like the fact that it is a team effort, with each portfolio managed by a different KCI investment expert. Philip Springer manages the growth portfolio, David Dittman manages the income portfolio, and Ben Shepherd manages the fund portfolio. Three heads are better than one. As the newsletter’s editors once wrote:
We believe PF, unlike most other advisory services, should be more than one person’s view. No one can rely on a single voice.
The editors provide updates on their portfolio recommendations on a regular basis in their “The Growth Track,” “The Income Report,” and “Fund Focus” articles.
Extra Features You Won’t Find Anywhere Else
Philip Springer also writes a “Marketwatch” column in each issue which provides his very latest opinion on the direction of the market during the next few weeks and months. The “On the Money” segment adds another layer of value to the newsletter with its discussion of retirement planning, tax strategies, money management, investment-related resources and book reviews, just to name a few.
In addition, there are at least three good reasons not to rely only on print versions of the newsletter, but to access on a regular basis PF Online, the newsletter’s webpage at www.pfnewsletter.com. First, PF Daily provides real-time daily updates on stocks in the PF portfolios, info that perhaps can’t wait until you receive the print issue in the mail. Second, the website offers video commentary from Philip Springer. Isn’t it much more pleasant to see and listen to your advisor rather than just read his copy?
But the thing I like most about Personal Finance is its top-down analytical approach. The quotation with which I start off this article is a good example of the newsletter’s mindset. In How to Pick Industry Sectors, I noted that three out of every four stocks follows the trend of their respective index. In other words, no matter how good one is at isolating great businesses with improving fundamentals, if its industry group is out of favor, the stock will most likely go down anyway.
All too often, when reading other investment newsletters, it’s clear to me that the stock recommendations made are based on nothing more than fundamental stock screens. No thought is given to the economic backdrop or long-term economic or demographic trends. If a stock passes the screen, it makes the cut.
In stark contrast, the editors at Personal Finance pick individual stocks only as the last step. The first step is identifying long-term economic trends and which industries are most likely to benefit from the tailwinds the identified trends provide. Only after the best industry sectors are found do they go to the final step of picking individual stocks.
Industry Sector Analysis in Each Feature Article
Personal Finance publishes twice a month (24 issues, not the typical once-per-month frequency of other newsletters). Each issue has three feature articles which show you how to profit from current trends in various markets and industry sectors. And each feature article provides buy recommendations, but not all article recommendations are included in the portfolios.
Just as there are regular updates on portfolio recommendations, there are also regular updates on these feature articles to let subscribers know if the industry analyses discussed within them remains valid.
While the S&P 500 has been on a great run the last few years, stocks that were portfolio recommendations have done even better. For example, a Growth Portfolio pick in the industrials sector is up 72% in just the last two years, an Income Portfolio pick is up over 700%, and a Fund Portfolio pick is up 33% in a little more than a year.
A True Value
Probably the most amazing thing of all is that you can obtain a one-year subscription to this information-packed newsletter for only $39.95. If at any time up until the last issue of your subscription you are not happy, you are entitled to a 100% refund, not just a pro-rated one. Amazing. Personally, given the newsletter’s comprehensive all-in-one investment advice and its market-beating returns, I think the price is way too low for the value received, but fortunately for you I’m not in charge.