When Paul V. Azzopardi started ETF Alpha, he had the aim to provide a service which actually worked and produced results better than buy-and-hold and, at the same time, was diversified.
The idea was to create a service that was easy to follow for anyone who has an online brokerage account, and wouldn’t take too much time.
As he said to us “there is a big market for something like this” and he’s right!
The financial world is full of so-called experts, but how many have spent their professional lives in the world of investing?
And how many services keep you diversified while striving for market-beating returns, or alpha, without overwhelming you with dozens of recommendations?
What Is ETF Alpha And How Does It Work?
ETF Alpha may not be a name you are very familiar with yet, but the chances are it soon will be because of its results and simplicity.
In a nutshell, what ETF Alpha provides is buy, sell, and hold recommendations on ETFs.
The coverage areas include U.S. bonds, U.S. stocks, U.S. real estate, developed countries stocks, emerging market stocks, and commodities.
For a fully diversified portfolio, you can follow ETFs covering all areas or if you care only about U.S. stocks, you can pick that category alone to keep an eye on and ignore the others.
You’ll also receive comments from the founder and editor of ETF Alpha, Paul Azzopardi.
You should always consult with your own financial advisor to assess the suitability of any buy or sell recommendations for your own circumstances, and if you decide to proceed with a one, you can simply login to your brokerage account and get started.
It’s generally wise to test out any new service risk-free on a virtual trading platform first before allocating real money, so you can build confidence in the recommendations and feel comfortable that they match your risk profile and financial goals.
Each month you receive a single newsletter, so you won’t feel overwhelmed with too much choice, a common pitfall of many financial newsletter services.
How Does ETF Alpha Performance Stack Up?
To gauge performance, you can view historical performance any time of the day or night by simply logging into the ETF Alpha online portal.
You can see the growth over a ten year period tracked by ETF Alpha in this snapshot below from 2006-2015.
Of course, what really matters is not performance as much as risk-adjusted returns, and when you compare ETF Alpha on that metric, the results are enviable too.
We should highlight as always that past performance is no guarantee of future returns, so the caveat is while the performance has been stellar, the future may not be as rosy. Still, ETF Alpha earns serious brownie points for generating handsome annualized returns in spite of the 2008-09 crash.
Many newsletter services and financial advisors will report returns starting in March 2009 at the bottom of the market, so the transparency is admirable, and we commend the team for showing performance stats that begin near the the top of a market cycle.
How Much Do You Need To Get Started?
The amount of money you need to invest is very much determined by your own personal financial circumstances. While ETF Alpha guides towards a minimum $5,000 per ETF or $30,000 for all six ETFs, the reality is if you have $2,500 in a brokerage account, you probably shouldn’t be leveraging it 100% using margin to follow a single ETF – the risk is almost certainly too high.
Equally, if you have $1,000,000 in a brokerage account, the minimum $5,000 amount may not move the needle much so higher allocations may be appropriate.
The best thing you can do is connect with a financial advisor, or you could even connect with one of the human experts at many of the top robo-advisors, who will probably help you think about how much money you can afford to risk investing.
How Much Does ETF Alpha Cost?
We were impressed by the pricing model at ETF Alpha, which isn’t much more than a few cups of coffee a month.
Plus, you can get started in a low-cost trial to explore the service.
Thereafter, your billing will renew each year so keep in mind that you must notify the team at ETF Alpha, otherwise your billing will be automatic.
Another cost which isn’t quite as visible is the taxes you will pay on any gains. Generally, trades are shorter term in duration so short-term capital gains taxes, if applicable, will apply.
You will also incur the cost of commissions when transacting unless you use a free stock trading account, such as Robinhood, which is a bare bones brokerage that features zero-commission stock and ETF trading.
ETF Alpha Bottom Line
The bottom line is if you are on the hunt for a newsletter service managed by an investment industry professional that charges reasonable rates, and strives to generate alpha as part of a diversified portfolio, ETF Alpha is worth checking out.