Retail investors can subscribe to financial data portals such as Morningstar Premium, Yahoo Finance Premium, Value Line, etc. Is there a general guideline on the maximum amount one should spend on such subscriptions?

For example, an annual subscription that costs 5% of my capital is probably excessive. I heard that, every year, one should spend no more than 1% of one's capital on such subscriptions. Subscriptions typically cost at least $200 per year (The Value Line Investment Survey costs ~$600 per year), so I would need at least $20,000 in capital to afford a subscription while respecting the 1% limit. Does this mean that with less than $20,000, it is unwise to subscribe to financial portals? I feel that the lack of access to data may be a disadvantage to those with less than $20,000 to invest.


7 Answers 7


For the great majority of retail investors, the appropriate amount to spend is $0, because it would be a better idea to buy an index fund and pay no attention to the data from those subscriptions.

That said, you're considering the subscription as an investment expense. If your goal is to see if you can make use of the subscription to increase your returns, and you have the time and inclination to explore that, I think it's reasonable to consider the cost as not just spending on investments but also education or even just recreation (i.e., you want to see what the info is like just for fun). $200 a year is not an outrageous amount to spend on a speculative educational/recreational/hobby endeavor that you think could potentially turn into something lucrative (e.g., buying yourself a guitar, woodworking tools, whatever). So I think it's defensible to buy such a subscription for a year to see what it does for you. The caveat is that you have to recognize that it's speculative partly just a lark and be willing to cancel it (and potentially never buy it again) if you can't derive measurable benefit from it after your initial trial period (a year or maybe two, say). In other words, it's not crazy to spend $200 for one year to see if the product is useful, but it is crazy to keep spending $200 a year if it's not paying for itself.

  • I would urge caution on the idea of "throwing away $200 on an interesting hobby". If you must do it, at least choose one with a chance of success. What about spending the $200 on submitting an app to the app stores? (You have about 1:100,000 chance of making back $100.) Or better, spend the $200 on lottery tickets.
    – Fattie
    Sep 24, 2020 at 12:09

Two great answers are provided, and I would like to add something. Most people do not wake up with 20K and say "tomorrow I will start investing".

They start small with regular systematic contributions. This might take the form of $50 auto drafted from your bank account corresponding to your pay days, or in 401K investments through payroll deductions.

Whatever, just start. You won't be optimal, and that is okay. Just get started picking some low cost index mutual funds from a reputable broker like Fidelity, Schwab, or Vanguard. All three have zero fees for most necessary transactions.

One of the best things a young person can do to secure their financial future is to find a way to earn money beyond your regular job. This can be anything from delivering pizza to ebay to scrap metal. Whatever, then use all of that money to build an investment account.

Doing such does not require one being born of privilege, a college degree, or much intelligence. Living in an area with economic opportunity helps greatly. It does require discipline and gumption. To top it all off there is a bunch of us old people that will gladly encourage and give good advice for free.

  • I think this is the best advice to someone who is not currently investing - to just start, with auto deposits pointing to a diversified index fund or if that risk is intimidating, even just a simple GIC ladder or similar would add some discipline for saving, and if you have $0 in savings and could invest $50 a month this way, the biggest impact you'll see won't be from returns, it will just be from accumulated savings. Sep 23, 2020 at 14:50
  • @Grade'Eh'Bacon it is also a great way to live. All of my single stocks make up less than 1% of my portfolio, and about 30% in actively managed funds. The rest in boring index funds. Also I recently moved past picking up scrap metal to help fund my investments.
    – Pete B.
    Sep 23, 2020 at 14:59
  • 1
    i tried picking up scrap metal once to supplement my income... i gave it up after a single week and a trip to the recycler when i discovered i had made less than (about half of) minimum wage at the time.
    – user12515
    Sep 23, 2020 at 16:06
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    @Michael yeah the whole scrap metal pizza paragraph is a non sequitur.
    – stannius
    Sep 23, 2020 at 20:23
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    Don't waste your time trying to become a scrap metal dealer. In the UK, I'm convinced that the people who do make money from it have contacts in skip-hire companies, and therefore know exactly when and where to find stuff for free. No knocking on doors required!
    – alephzero
    Sep 23, 2020 at 22:06

If you want a financial data subscription to be merely inspired by things you hadn't thought about, stick to spending $0, or 1% of your capital.

If you want a financial data subscription to actually get specific data that supports a specific edge you already perceived, spend whatever you think your edge is worth that gives you enough left over for a consistent profit.

Your perception is accurate. Come back when you have enough money to play.


Consider how much value you're likely to get from any form of investment advice.

If you don't subscribe to anything, and do no research, but just purchase an S&P 500 index fund, you'll probably earn around 8% in the long run.

Now suppose you decide to pay for a service that provides investing advice (a publication or financial advisor). For this to make financial sense, you need to expect that following the advice will increase your earnings by more than the price. If the service costs 1% of the capital that you're investing, it needs to increase earnings by at least 1% (this is a bit of a simplification -- active investing can also reduce portfolio volatility, which is helpful in short terms).

But the situation isn't actually so bleak. Even if the increase in returns is not enough to offset the price of the advice, they compound over time. Eventually your portfolio may grow to a size where the cost of the service is well worth it. On the other hand, that will also happen with the index fund, so you might choose to wait until your investment grows to a size where it's worth getting more active.

However, there may also be non-financial considerations, as @BrenBarn mentions. Simply parking your money in a few mutual funds is boring. If you consider investing to be an interesting process, it will be more fun if you do it actively. In that case, you can consider subscribing to financial data similarly to a sports fan subscribing to Sports Illustrated. Even if it doesn't increase earnings to compensate for its price, you're enjoying the activity more.

Another factor is that as the size of your portfolio increases, more investment avenues open up for you (e.g. hedge funds). Many of these investments have eligibility requirements: minimum net worth and initial investment amounts. These types of investments are also more complicated, and you should seek out advice before considering them. The price of this advice is likely to correlate with the amount of your capital that you're investing.


For newsletters and advisory services, once upon a time you could get a free sample. Today, I think that many are geared toward a small free trial period or monthly subscription.

The most valuable one to me was one that I subscribed to in the late 1990's for $300 a year. It ranked first day IPO performance with a high degree of accuracy. I had access to many IPOs then and it was counter productive to have 'dead money' tied up in a crappy issue, as compared to an issue like Calloway Golf at $20 that opened up at $35.

Another aspect of this is time. Every some number of years there's an opportunity in preferred stocks due to interest rate gyrations (see the inverted yield curve fear of two years ago). Maintaining a database is worth the effort during such periods but doing so in the interim years is tedious. There's a chap who wrote a good book on this, contributes occasionally on Seeking Alpha and has a worthwhile fee based online advisory site with all of the data details of preferreds (Moodys and S&P ratings, call date, maturity date, dividend, cumul, non-cumul, etc.). For me, it's well worth an infrequent one month subscription for $30 to capture his data, saving me many, many hours of work.

The short answer is that you should subscribe to anything that either saves you a significant amount of time or increases your return with that increased return handily exceeding the cost of the subscription. The process of finding that source is the tricky part.

  • What is this book you are referring to?
    – Flux
    Sep 23, 2020 at 15:06
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    "Preferred Stock Investing" by Doug LeDu. It's about 250 pages soft cover and could use an editor to 1/2 that length. It's a good introduction for beginners to swapping preferred stocks for yield and cap gain. The one thing that I disagree with is his exit sell strategy but that's a personal decision for all to make as they see fit. Don't waste your time on the books by Paul Josephs and Kenneth Winans. Sep 23, 2020 at 20:08
  • 1
    @BobBaerker I've read Le Du's book and apply a similar approach to the Canadian preferred shares market. Le Du's book seems to be the only book like it out there for preferreds -- at least that I could find? There is a similar expert up here in Canada, James Hymas, who shares opinions and knowledge about preferred shares with the public through articles, and a good blog at prefblog.com. He has an occasionally valuable newsletter with data for Canadian preferreds, but hasn't written a book (yet). Sep 24, 2020 at 2:41
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    @Chris W. Rea - There's a meager amount of Pfd info out there, especially books. LeDu's is the best of them - a very good intro to the sector. I wish it had been around 20 years ago when I started investing and later swapping them. There's a good BB on Silicon Investor with some really savvy people - some financial pros participate as well. It tends not to be my cup of tea because I think that they may be chasing the high yield (lower quality issues) with a bet that they'll collect enough before gravity sets in. Thanks for the prefblog.com address but my virus program is flagging it (sigh). Sep 24, 2020 at 2:56
  • I feel the takeaway from this answer is, if you are profoundly expert in a niche highly technical field it might be worth spending $30 on certain highly technical information!
    – Fattie
    Sep 24, 2020 at 12:12

There is a fundamental rule that applies to every decision making process:

If you don't know what you are going to do with some piece of information when you have it, don't waste time and money trying to get it.

So unless you know how you are going to use this financial information, it isn't worth having even if it is free, because you will be wasting time looking at something you don't understand.

If you already have a strategy and you are confident using Value Line data will increase your profit by more than $600, then paying $600 for the data might be a good use of your money.

But if you just have the vague feeling that "knowing more stuff will help you make better decisions", don't bother!


The "trading information disease" - TID.

Humans en masse and on average behave in predictable common ways.

(Random example: there are now some four million people who have made an "app! on! the! app! stores!" because (i) about 8 (sic, that's eight, 12345678, ten minus two) people have become millionaires from apps and (ii) everyone knows that anyone can easily become a millionaire from an app.)


(A) a human gets "trading fever"


(B) almost always the human also gets TID. They become obsessed with finding that "secret piece of information that will allow them to become millionaires overnight by Trading!"


(C) it is incredibly easy to make money based on (B) in the obvious way. Just sell any information in any format (newsletters, Professional! Level! Feeds!, blogs, books, PDFs, talks, 800-lines, whatever - makes no difference) to the people in B.

If you want to very easily make really great money from trading, just do what it says in C.

  • Can you provide a reference to these app store statistics? (including the claim "You have about 1:100,000 chance of making back $100" from your other comment)
    – Flux
    Sep 25, 2020 at 11:54
  • Yo Flux! No, because (A) it's a example mentioned in passing of a well-known phenomenon, not part of the discussion, (B) I'm too lazy (C) it could be you're as old as me (and that's saying something! :) ) but you can instantaneously find all information these days by speaking the question out loud. (if you have incredibly old devices, type the question rather than speaking!)
    – Fattie
    Sep 25, 2020 at 12:04
  • 1
    @Fattie if you’re not willing to provide evidence for your claims, don’t make them. It’s a waste of everyone’s time to read an answer that’s not correct / using made up statistics.
    – Tim
    Sep 25, 2020 at 20:18

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