With interest rates rising globally, more investors are looking into high-yield investing strategies to achieve better returns. This has led to a proliferation of high-yield investing subscription services that aim to help investors identify attractive high dividend stocks and bonds. However, not all services are created equal. When evaluating a high-yield investing subscription, investors should look at key factors like the investment philosophy, track record, transparency, fees, and customization options.
Focus on a proven investment philosophy and process
The cornerstone of any high-yield investing service should be a time-tested philosophy and process for selecting investments. For example, some may focus on identifying undervalued dividend stocks based on fundamental analysis, while others take a more quantitative rules-based approach. Understanding the methodology can give investors confidence that there is a sound rationale behind the recommendations.
Have a long-term track record of success
Past performance does not guarantee future returns, but a long track record does demonstrate that the service’s philosophy has worked over multiple market cycles. Investors should look for services with at least a 5-10 year track record of consistently high total returns and dividend income.
Provide transparency into holdings and decision making
Reputable high-yield investing services should disclose their current portfolio holdings as well as provide context on why investments are added or removed. This level of transparency allows investors to better evaluate the service and have confidence in its stock selection process.
Offer reasonable fees for the value provided
High-yield investing services can charge annual fees ranging from 0.5% to over 2% of assets under management. Investors should gauge whether the fees charged are commensurate with the caliber of recommendations and level of service provided. Lower cost services can provide good value.
Allow for sufficient customization based on investor needs
While many services provide model portfolios, the best ones allow investors to customize based on individual criteria like risk tolerance, income needs, sector preferences, etc. The ability to tailor a portfolio to an investor’s specific requirements provides additional value.
In summary, when evaluating high-yield investing subscription services, investors should carefully examine the investment philosophy, performance track record, transparency, fees, and customization options. This due diligence is key to finding a service that aligns with one’s investment objectives and risk profile.