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In a world of robo-adviser services designed to hitch your fortunes to a stock index, the quiet genius of James Grant stands out, challenging, delighting and enriching his well-heeled subscribers. Mr. Grant is editor of the esteemed newsletter Grant's Interest Rate Observer, which he founded in 1983.

Despite its high price tag – $1,025 (U.S.) for a one-year subscription – Grant's has made itself indispensable over the past three decades for its ability to identify trends – and pick individual stocks and bonds – long before the broader market catches on. When Mr. Grant is right, as he usually is, he spares his subscribers from being whipped around by the market – measured by the aforementioned stock index.

Canada, too, has some independent analysts of renown, among them Fabrice Taylor, a chartered financial analyst and founder of the President's Club investment newsletter (in partnership with The Globe and Mail). The newsletter specializes in turnaround situations – think U.S. giants AIG and Microsoft – and small companies with substantial growth potential. His motto: Be early and prosper. His record: very good indeed.

"I always put my own money in, so I care a lot" how an investment performs, Mr. Taylor said in an interview. He credits his success to some big wins and a willingness to sell when he recognizes he has made a mistake. About a third of his picks turn out to be non-performers, he admits.

Mr. Taylor likens market cycles to farming. During the early stages of a bull market, "you should be fully invested," he says. As the upturn matures and more investors pile in, "you can start harvesting" or taking some profits. This is crucial because it readies investors for the inevitable bear phase.

Mr. Taylor now has about 40 per cent of his portfolio in cash. "There's just not as much value now," he says.

To benefit from newsletters, choose one that best suits your investment goals – and know how to use the information. If you subscribe to a stock-picking newsletter, for example, you must be willing to act quickly. Too often, investors watch and wait, finally taking the plunge about the time the stock is reaching an interim peak.

Mr. Taylor cautions against chasing a stock higher. "You never make money when you're late to the stock market," he says. "You're supposed to buy [the stock] with me, not watch it."

Turnarounds and up-and-comers are far more risky than a portfolio of blue-chips, he notes: "Only invest as much money as you can afford to lose." People enticed by the prospect of big gains on a hot stock often overlook this basic rule. "I always have to say, remember, this is a risky stock. It shouldn't be more than one per cent of your portfolio, if anything," he says.

Some notes of caution.

When you subscribe to a newsletter, don't think you're getting professional money management on the cheap. Newsletter writers don't know you, so they cannot tailor their recommendations to your needs and risk tolerance.

Some, such as The Successful Investor, offer model portfolios that they update periodically, which is helpful for do-it-yourself investors. Its publisher, TSI Newsletter Publications, also offers professional money management for a fee.

With 3,000 subscribers, the President's Club can move markets for smaller companies. This can be fun when a stock price is rising, but it can make it difficult for you to leg out of a position if Mr. Taylor concludes he has made a mistake. The stock price could fall as quickly as it rose.

The Hulbert Financial Digest, a newsletter that rates other newsletters, explores this phenomenon in its August issue, concluding that "for advisers who focus on the smallest-cap stocks, for which relatively few shares trade each day, popularity can be a major impediment to good performance."

A few noteworthy newsletters

  • The Successful Investor, published by TSI Newsletter Publications, founded by Patrick McKeough (12 times a year, current promotional price $89). Its three model portfolios focus on high-quality, mostly Canadian stocks with strong profit and growth potential. Its strategy can be characterized as “buy, watch and hold.”

According to Hulbert Financial Digest, Successful Investor has returned 14.4 per cent over the past 10 years, a period that included one of history's worst stock market crashes. All three model portfolios "have handily beaten a buy-and-hold in the stock market over the time the HFD has tracked them," Hulbert writes.

The TSI group also includes Canadian Wealth Advisor (12 issues, current promotion $69) for more conservative investors, Stock Pickers Digest (12 issues, $118) and Wall Street Stock Forecaster (12 issues, $94). Hulbert ranks Wall Street Stock Forecaster among newsletters with the greatest performance consistency over the past decade, with an average annual return of 10.6 per cent.

Investors interested in all four newsletters plus a host of other privileges – including having Mr. McKeough answer your investment questions – might consider the Inner Circle membership for $625 a year.

  • Grant’s Interest Rate Observer, $1,025 (U.S.) for a one-year subscription of 24 issues. This newsletter is witty, entertaining and all-seeing, covering central bank shenanigans, politics and financial, currency and commodity markets, among other things. A typical newsletter offers a long and short investment candidate drawn from markets for stocks, fixed income and real estate. Editor James Grant keeps a close eye on interest rates, bond markets and the economy.
  • President’s Club investment newsletter, from Fabrice Taylor. It offers two levels of service, one for beginners ($199 a year) and one premium ($750). It publishes something pretty much every week, but it’s not like a magazine with a fixed frequency, Mr. Taylor says.
  • Contra the Heard, from Benj Gallander and Ben Stadelmann, $500 a year, published quarterly, with e-mail updates when a stock is bought or sold, 20 to 35 updates in a typical year. The analysis is fundamental, the stance contrarian. The newsletter focuses on turnaround situations or stocks that are out of favour. Its President’s portfolio was up 49.4 per in 2013. Subscribers are limited to 1,000.