Stock selection is one of the biggest challenges for investors of individual stocks. In response to that, an entire industry of investment advisories has grown up over the years. They provide individual stock recommendations, and often market commentary and other information.
One of the most popular investment advisory services of the past two decades has been Stansberry Research. The company is a bit controversial due to a 2003 lawsuit brought against the company by the SEC, which we are going to discuss, but this review will focus primarily on the merits of the advisory services provided by Stansberry Research.
Is this investment advisory service worth the cost? Or like a lot of advisory services, do we need to wonder if Stansberry Research is legit?
Table of Contents
- About Stansberry Research
- Stansberry Research Complete Portfolio Solutions
- Stansberry Research Investment Advisory Letters
- Stansberry Investment Advisory
- True Wealth
- Retirement Millionaire
- Extreme Value
- Advanced Options
- Other Stansberry Research Newsletters
- Who is Stansberry Research Best For?
- Stansberry Research Alternatives
- Bottom Line
About Stansberry Research
Stansberry Research was founded in 1999 and is based in Baltimore, Maryland. The company gets its name from its founder, Frank Porter Stansberry – or simply Porter Stansberry – a controversial figure because of his unconventional investing style.
Stansberry Research nonetheless offers several different stock-picking newsletter options. It’s one of the most popular stock-picking newsletters available, with more than 500,000 subscribers worldwide, including 70,000 lifetime subscribers.
The newsletters offer strategies for different types of investing, including:
- dividend investing
- fixed-income investing
- value investing
- energy and precious metals investing
- alternative assets
- and conservative, income-generating options-trading strategies
But the site also includes a wealth of investor resources to help you learn more about the process.
Is Stansberry Research a Scam?
This is a question that comes up frequently in discussions of Stansberry Research. While it’s hardly unusual for there to be allegations of scams in connection with investment advisories, there is a legitimate basis for the claim with this company.
Back in 2003, the company was the target of a lawsuit by the Securities and Exchange Commission (SEC). Briefly, it involved the claim of a specific stock having the potential to double in a single day. The claim was purportedly based on “insider information.”
That insider information proved to be baseless. However, it is alleged the company used the claim of that information to sell the name of the company whose stock was expected to double for $1,000 per disclosure. The company made over $1 million selling that information, which the SEC considered to be misleading.
The case went to court and was decided against Porter Stansberry (and other defendants in the case) in 2007. In subsequent appeals, the court upheld the original decision.
You can read the full details of the case at Brian Deer’s Introducing Porter Stansberry and the “Stansberry scam”.
That said, we’re only reporting the basic information on the case. We make no determination as to the merits or outcome of that case. You’ll need to investigate the details and decide if it impacts your decision for or against signing up for any of the Stansberry Research newsletters.
Is Stansberry Research Legit?
This is the central question with virtually any investment advisory service. Investors sign up for such services for the purpose of receiving guidance with specific stock purchases. If those purchases turn out to be profitable, the investor is generally pleased with the service.
However, should investors lose money on one or more stock picks, the word “scam” trickles into the conversation. It’s a natural outcome when people lose money based on information provided by others.
Despite the SEC case against Stansberry Research in 2003-2007, it’s worth noting the advisory continues to be popular 14 years later.
That’s not a resounding endorsement to sign up for the service. But it does indicate that perhaps the events that took place nearly two decades ago are in the distant past. Investors and consumers vote with their feet, and the continued success of this advisory tends to indicate it is legitimate.
Stansberry Research Complete Portfolio Solutions
Stansberry Research offers three model portfolios, each with its own specialization. Unlike robo-advisors in traditional investment advisories, Stansberry Research doesn’t actually manage your portfolio for you. Instead, you’re provided with investment recommendations for each portfolio type.
Unfortunately, the company does not indicate the cost of its services. In fact, you cannot purchase the services online. You must call to get the price.
The three portfolio options are as follows:
The Total Portfolio
This is a hedge portfolio using about 40 stock recommendations. They’re drawn from safe income, growth stocks, emerging markets, and small capitalization stocks. The service for this portfolio is published on a monthly basis.
This is a generally conservative portfolio mix, with a recommended minimum portfolio size of $100,000. The typical holding period is from 1-3 years, and emphasizes “super-high-quality, capitalization-efficient companies.” However, there will be occasional recommendations for short trades.
One of the main advantages that comes with The Total Portfolio is lifetime access to all Stansberry Research and newsletters, as well as immediate access to all publications available for both The Capital Portfolio and The Income Portfolio.
The Income Portfolio
This portfolio consists of between 20 and 30 securities with emphasis on generating a monthly income. It focuses on income-generating stocks, fixed income bonds, and bond funds. This is also a portfolio with a generally conservative orientation.
Along with your subscription, you’ll have access to no fewer than nine Stansberry Research investment advisory newsletters, plus all those available for the Capital Portfolio.
The Capital Portfolio
This is the entry-level portfolio model. It comprises 20 of Stansberry Research’s “highest conviction ideas.” Those include companies in gold stocks, foreign stocks, insurance firms, technology, real estate, energy, and biotech.
Like the other two portfolios, The Capital Portfolio has a conservative orientation. The service is published monthly, and a minimum portfolio balance of $100,000 is recommended. Once again, the typical holding period is 1-3 years, and there are occasional short trade recommendations.
The portfolio will give you access to seven newsletters.
Stansberry Research Investment Advisory Letters
What Stansberry Research may be best known for is its investment advisory newsletters. They offer no fewer than 24.
We’re not going to cover all 24 in detail, but here’s a list of the most popular and interesting newsletters:
Stansberry Investment Advisory
This is the company’s flagship research advisory. It is published on the first Friday of each month. Recommendations will center on individual stock positions and between 20 and 30 companies.
The recommended holding period is at least one year, with a minimum $1,000 investment. The cost of the newsletter is $199 per year, but you can start with a 30-day trial subscription.
This newsletter focuses on value stock selections. It can include unusual investments, like timber, gold coins, and government tax certificates. Others include farmland, oil and gas royalties, and virtual banks. The recommended number of positions is 25 companies, and its orientation is conservative.
A minimum investment of $1,000 is recommended, and you’ll be invested in individual stocks and exchange-traded funds. The newsletter comes out monthly, and is available at $199 per year, with a 30-day trial subscription.
This newsletter has a bit of a different angle. It’s designed to instruct readers how to live “a millionaire lifestyle on less money than you’d imagine possible.” It’s a monthly newsletter subscribed to by almost 100,000 readers.
The newsletter focuses on 20 to 25 stocks, with a recommended holding period of at least two years. You’ll need at least $1,000, and it’s designed for beginning investors, retirees, and those planning to retire. The newsletter comes out the second Wednesday of each month.
Like other Stansberry Research newsletters, the subscription is available at an annual fee of $199, with a 30-day trial subscription.
This newsletter focuses recommendations on value investing. Once again, that’s the process of investing in stocks that are out of favor with the general investing public. Historically, this has been one of the best ways to profit from investing in individual stocks. The portfolio recommendations are considered to have a moderate risk level. The newsletter comes out in the middle of each month and is recommended for investors with at least $5,000.
Portfolio recommendations will focus on stocks in 20 to 25 companies. The typical holding period is three or four years and may involve short trading.
The cost of a subscription is $1,500 per year, which would seem to make this newsletter more appropriate for investors with at least $100,000 to invest.
As the name implies, this newsletter focuses on options trading. It starts by providing readers with the ability to learn to trade options using the company’s detailed educational materials. The advisory presents options-trading ideas based on stock research. This is an aggressive trading strategy that aims to double and triple your investment.
The newsletter is published twice each month, on the second and fourth Mondays. Email updates are provided as needed. A recommended minimum portfolio size is $5,000, so you can make investments of as little as $100 or $200 each. The typical holding period of each recommended option trade is 2-3 months.
Stansberry Research does not indicate the subscription fee on this newsletter service.
Other Stansberry Research Newsletters
There are at least 19 other newsletters offered by the company, with most being highly specialized.
- Stansberry Gold and Silver Investor
- Commodity Super Cycles
- Stansberry Innovations Report
- Retirement Trader
- Stansberry’s Big Trade
- True Wealth Systems
- True Wealth Opportunities: China
- True Wealth Real Estate
- Stansberry Venture Technology
- Stansberry Venture Value
- Stansberry Credit Opportunities
- Income Intelligence
- Daily Wealth Trader
- Cannabis Capitalist
- Crypto Capital
- Gold Stock Analyst
- Silver Stock Analyst
- Stansberry’s Election 2020 Portfolio
- Ten Stock Trader
In addition to providing specific company recommendations, Stansberry Research tends to be long on industry and market commentary. That information can help an investor better assess what’s going on in the bigger picture environments that have a great influence on the performance of individual stocks.
And since the firm generally sees difficult times ahead for both the economy and the financial infrastructure of the US and the world, there’s a strong emphasis on alternative investments, like gold, silver, and other commodities. You’ll need to make your own determination about expected outcomes on the macro level.
Who is Stansberry Research Best For?
Stansberry Research will work best for larger investors, for whom the cost of the newsletter will be easily offset by the investment gains from the recommendations.
For example, if the recommendations earn 10% on a $20,000 portfolio, it will be well worth the cost of a $200 newsletter.
But if you only have $1,000 to invest, the 10% return will be more than swallowed up by the cost of the subscription.
Stansberry Research is also designed primarily to benefit passive investors with a long-term commitment. Their investment recommendations are slanted in favor of value stocks. Those are stocks that are currently out of favor in the investment community but have strong fundamentals. The expectation is that they will outperform other stocks over the long term. You’ll need to be prepared to commit to the recommendations for several years.
Because of the cost of this newsletter service, Stansberry Research is better suited to large, experienced investors. It can cost – potentially – several thousand dollars per year if you want to subscribe to several of the newsletters at the same time.
Stansberry Research Alternatives
If you find Stansberry is not for you there are several alternatives to check out.
Consider Seeking Alpha if you want in-depth research on just about any stock or ETF and also want to find investment ideas for multiple strategies.
Unlike an investment newsletter, you won’t receive monthly investment recommendations to buy a specific stock. But you can access lists of top-rated stocks, a stock screener, and a rating system to find investment ideas.
Once you find an idea, you can read analysis articles that can present the bullish and bearish case for the company you’re researching from several authors. These articles can help give you a better understanding of a stock and its potential risks and rewards that a monthly Stansberry publication may not have time (or space) to cover.
It’s also possible to follow your favorite authors and track their long-term recommendation performance. These authors may also have a model portfolio that can give you investing ideas.
In addition to the research articles, the stock profile also includes the fundamental financial data and the exclusive Quant Ratings.
The Quant Ratings provides a bullish or bearish score for these factors:
- EPS Revisions
These ratings and the research articles can be the best reason to consider Seeking Alpha as you have more control over your research process.
Other core features include:
- Stock and ETF screener
- Portfolio tracker
- Stock dividend grades
You receive more hands-on research tools than a standard Stansberry Research subscription.
There are three different membership plans available:
- Basic (Free): Limited access to research articles and analyst ratings. You don’t have access to the stock screener, Quant Ratings, or investment idea lists.
- Premium ($29.99.month): Unlimited access to articles, Quant Ratings, stock screener, and other research tools.
- Pro ($199/month): Access to additional stock lists, screening tools, and newsletters.
Want to know more? Check out our full review of Seeking Alpha.
We have negotiated a lower rate for Wallet Hacks readers – you only pay $14.99 per month when you pay the annual fee ($179.99) up front. So it’s an additional savings of $60 over the regular discounted price.
The Motley Fool
The Motley Fool is an investment advisory newsletter service, and one of the most popular in the industry. They have a history of picking some of the most successful stocks of the past 20 years. It’s a fee-based service, that provides two new stock picks each month.
Morningstar is one of the most respected investment information sources in the industry. Not only are they regularly quoted by the financial media, but they’re frequent choice of investment brokerages to provide information and ratings to their customers. Their proprietary five-star rating system for stocks and funds is one of the most popular in the industry.
But if you want to get more detailed investment information directly from the source, you can sign up for Morningstar Premium. It provides analysis and ratings of individual stocks, bonds and funds. In addition, it comes with a wealth of investment tools, like analysts reports, top investment picks, portfolio manager, screeners, and their proprietary Portfolio X-Ray.
Another of the most popular newsletter services is Zacks. Much like Morningstar, Zacks is one of the most respected information sources in the investment industry and frequently quoted by the financial media. But they also offer investment research and stock picking to their more than 800,000 subscribers.
And not only does Zacks provide security ratings, similar to Morningstar, but they also offer their ESP (Expected Surprise Prediction). It’s a weighted prediction of the likelihood a company will beat its consensus earnings prediction each quarter.
Zacks offers three different newsletter services, so you can pick the one that best suits your investing style and your budget.
If you do choose to sign up for one of the Stansberry Research services, use it only as a starting point. This should be the case with any investment advisories you choose to work with.
While an investment advisory can recommend buying stock in certain companies, none can guarantee you a successful outcome. You can shortlist the recommendations they make, but be sure to do your own research.
Investment advisories do make the job of individual stock selection easier. But no one is more responsible for the investments in your portfolio than you are. So, start with selections recommended by an investment advisory, then drill down and do your due diligence. A good investment advisory, in combination with your own efforts, may be the best stock selection source possible.