One of the most challenging aspects of trading in the stock market is keeping up with the changing dynamics. The most common way of keeping track of the market is through watching the news or via indicators. However, these two methods can be tiresome and boring for some.
Wouldn’t it be great to keep tabs on the stock market without being stuck in front of the TV all day long? At this point, we will introduce you to Action Alert Plus by Jim Cramer, a newsletter that offers you stock investment tips so that you remain up to speed with whatever is happening in that sector.
Our detailed review of the service shall touch on all its vital aspects so that you can decide whether it would be a perfect fit for you.
A Brief Overview of the Action Alerts Platform
This is a newsletter designed and operated by Jim Cramer himself with the aim of providing you with stock-market beating tips. Here, he offers you valuable advice on the stocks to buy and sell, plus the best portfolio that you ought to invest in.
The other bit about this service is that Cramer has an expert team behind him that helps in analyzing the movement of the stocks in the portfolio. Cramer executes the issued recommendations in the Action Alerts Plus charitable trust to ensure that his interests and subscribers remain aligned.
In general, this service is the perfect fit for novice traders who aspire to develop into medium and long-term traders.
Who is Jim Cramer?
Before we get to this platform’s main features, we must discuss a bit who the creator is. Jim Cramer had a rather unusual start in the stock market where he practiced his trade at Harvard law school, unlike most pros who hail from business schools.
He had a creative way of marketing his stock picks, and he used his answering machine to do so. It is here that he captured the attention of the owner of The New Republic, who gave him $500,000. Two years later, Cramer returned 30%.
Later on, he joined Goldman Sachs as a stockbroker and proceeded to become a very successful hedge fund manager.
Cramer hosts a TV show on CNBC known as Mad Money, whereby he invites stock market gurus and offers them a platform to air their expert opinion on the trade.
Key Features of Action Alerts Plus
In this section, we shall take a look at the individual components that make up this service. Here they are.
I) Alerts and Analysis
Each alert you receive will be accompanied by short paragraphs explaining Cramer’s rationale for making a particular recommendation. Then, the team’s in-depth analysis aims to ensure that you do not miss any significant event in the stock market.
You will also find the analysis on other stocks that are not on the portfolio but that Cramer’s team is monitoring. Expect these posts to be longer and more detailed than those that come with the alerts.
If you want to make full use of this feature, you should have a passion for reading as you will have a lot of news articles and previous newsletters to go through.
This is a listing of all the stocks that Cramer and his team have recommended. They come in spreadsheet format so that you can easily see how each stock is performing.
The information you find here includes the recommended price target, the returns of a certain stock on the list, the stock’s overall weight, among others. By sorting the portfolio by the recent buy dates, it will be quite easy for you to find the best stocks to buy right now.
Another aspect of the portfolio that we should talk about is the rating system on a scale of one to four of each stock. This system tells you whether Cramer recommends buying more of the stock, waiting for a pullback, or selling. The significance of this system is that it helps subscribers understand the rationale behind an alert.
Unlike typical forums in other platforms, the one in Action Alerts is designed in a Q&A format whereby the subscribers pose questions to Cramer’s team directly. Then, the analysis team sends the response instantly.
This is different from other forums, whereby it is a room of traders interacting with each other and offering solutions to problems posed. It is easy to receive misleading answers in such instances.
IV) Weekly Roundups
These are newsletters that come at the end of the week, and they focus on the general market and economy rather than specific stocks. The newsletters summarize vital economic indicators, global events affecting the market, and investor reactions to notable earnings reports.
The roundups may also include investment advice for investors who are keen on the market’s weekly performance.
How It Works
The working of this service is pretty straightforward. This is a newsletter that you can access via Cramer’s website, i.e., TheStreet.com. Any time he recommends a particular stock to be bought or sold, the team will send you an alert via email.
You will not receive an alert only, but each one of them comes with more details about the stock, the rationale behind his move, and the next move he is about to make. Further, there is the Charitable Trust Plus, which features weekly analysis of the stocks in addition to any significant event you can expect in the coming week.
By now, you must be wondering how much the service costs. To access the different services that Action Alerts Plus has to offer, there are three subscription plans that you could follow, i.e., monthly, annually, or biannually.
The monthly plan will cost you $59.95 per month, while the annual subscription costs $299.95. As for the biannual plan, it will cost you $499.95.
One thing we liked about this service is that it offers you a free two-week trial where you can try it out before making any financial commitment.
Once you subscribe to the service, you have thirty days to conclude whether it has everything you are looking for in an alerts service. If you are not satisfied with it, you can ask for a full refund of your money, no questions asked.
Who is Action Alerts Plus Most Suited for?
If you are an investor who wants to invest in both medium and long-term stocks, this service would be the perfect fit for you. Further, since its niche is stock recommendations, you may also find it ideal if you have an idea of how the stock market works, but you do not wish to go in on your own.
Another thing is that since the program focuses on scaling positions, passive investors would not find it appealing. Instead, the active traders who like playing a part in their investments would find it very useful.
Pros and Cons
What are the advantages of this service? Does it have any drawbacks? The answer to both questions is yes. We shall state both the pros and cons of this service below in brief.
- This is a transparent service that offers a summary of all that was traded during the day
- The stocks involved are well-known and liquid and so you can expect an easy time trading them
- All the recommendations come with an in-depth analysis
- The profits that this platform makes go towards a charitable cause of helping the vulnerable in society
- Relies a lot on scaling positions, and this leads to high commission fees
- It may be time-consuming as it requires you to do the actual trading
- Does not specify how you can place stop losses on positions
The stock market is a volatile and unpredictable space where reliable advice does not come by easily. So, it would be best if you had all the genuine help and guidance that you can get to wade through this murky path.
The Action Alerts service is one such platform that would help you actualize your dreams of becoming a world-class trader. It was developed and run by Jim Cramer, a stock market guru with a proven track record of beating the market. Most of the recommendations he has given have returned huge profits.
With this newsletter, you will get tips, relevant news, and reports that will help you improve your game in the market. You will have developed into a pro that every upcoming trader looks up to in a short while.