Sound Mind Investing Newsletter Review

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Sound Mind Investing (SMI) Newsletter is America’s best selling financial newsletter written from a biblical perspective.

I have been an SMI subscriber for a year and a half and I have been very impressed with the quality of the material.  The articles are well written and very timely to current market conditions.  Since those who work with the newsletter are Christians I feel like the articles have already been filtered by Christians.

In fact, Mary Hunt’s comments at the introduction of the The Sound Mind Investing Handbook – A Step-By-Step Guide To Managing Your Money From A Biblical Perspective 5th Ed mirror my thoughts on both the SMI book and the SMI newsletter.  Mary Hunt writes:

In the same way that I’m not economist, I’m not exactly an investment wizard either.  That’s why I’m a huge fan of Austin Pryor, author of The Sound Mind Investing Handbook.  … Everything I know about investing I learned from Austin Pryor.

Today I want to introduce you to the SMI Newsletter.

The Sound Mind Investing Newsletter

Each 16 page newsletter is broken down into the following major sections / categories:

Cover Article – Here are the cover article titles for 2009

Is a College Education Still Worth the Investment?, The Richest Man in Babylon, Almost Too Good To Be True, How to Avoid Panic and Reduce Fear, Protecting Yourself Against “The Big One”, A Dollar in Danger Leads Many to Gold, Investing with Rising Inflation in View, Making Money From Home, Biblical Wisdom For Giving, and A Road Map For Investing in Gold.

Editorial – comments by Austin Pryor (founder of Sound Mind Investing)

Level One Article – addresses those who are working towards becoming debt free.

Level Two Article – addresses those who are in the process of building an emergency fund.

Level Three Article – addresses those who are venturing into the world of investing and who are setting aside money for retirement.

Level Four Article – addresses those who are dealing with an investment portfolio in excess of $25,000.

Recommended Funds: Each month SMI suggests mutual funds that are performing well against their peers.

Money Talk – deals with financial discussions in the news.

Looking Ahead – General financial planning suggestions.

Additional features, benefits, and products:

The Newsletter offers both a traditional print subscription or an online subscription.

Online members have access to a members only blog with investment news, 401(k) tools, several investing strategies, fund performance rankings, and more.  You will also have access to eight additional free special reports.

SMI describes their community boards:

With over 10,000 members, our message boards are a great resource for getting questions answered, gaining valuable input on financial issues and decisions of all types, and a place where you can share your knowledge on a particular topic or just offer an opinion on a recently written article or blog post.

There are many additional features and benefits to SMI, but I won’t take the time to introduce everything.  You can visit their site and get more details.

Web Membership: A Web Membership delivers each complete issue of the printed newsletter in electronic form. Plus Web Members get additional valuable benefits: early access to new issues, use of SMI’s 401(k) Fund Tracker, a monthly update of our Fund Performance Rankings, information on our Advanced Strategies, access to our content archives, Member’s Forums and Editors Blog, and more.

To subscribe to the Sound Mind Investing Newsletter click here.

Why I first subscribed to the SMI Newsletter:

  • After about a decade of investing through a financial advisor I was ready to have more direct control over my own investments.
  • I am looking for investment, teaching, and education along with guidance.  SMI provides both some structure and flexibility to your investing plan.
  • Superior investment Returns: When I was considering my investment options I went back and dug through my previous five years of investment performance.  In each and every account SMI Upgrading outperformed (at times significantly) my current investments.  This was not a short term streak, but each year over a five year period.SMI actual returns

SMI Preformance History

  • Lower overall maintenance cost: When we made the change to following some of the SMI strategies we had two Roth IRA accounts, 1 ESA account (with one on the way), and a general funds account.  Each account came with its own layer of fees.  With SMI I paid for the newsletter and was able to handle all the investing by myself.
  • Free Trial – Hey, I like for free trials.  During my two month free trial I downloaded every article for the last three years.  I have now read every word of every article and found the information extremely formative to my understanding of investing.  I don’t see the free trial as a current offering, but there is a 100% MONEY BACK GUARANTEE. You must be completely satisfied. If SMI doesn’t live up to your expectations for any reason, just cancel during the first three months and receive a full cash refund of the print subscription price, no questions asked. You risk absolutely nothing!*
  • Appealing options for smaller accounts with a huge amount of diversification.  SMI has a mutual fund called SMIFX.  This mutual fund is different than most because it owns a batch of other mutual funds, not a batch of other stocks.  Thus, each SMIFX share represents ownership of at least 20 different mutual funds.  This was especially appealing for smaller ESA accounts.
  • Because of my age, I was looking for a higher risk/reward component to add to my investing plan.  The SMI sector rotation strategy provided that missing ingredient in my investing plan.

*Updated: It is important that you personally verify to see if  the above offerings/benefits are still current offerings.    To verify information please visit the SMI website and contact them directly.

*Updated 2/3/2010 – I removed some information regarding TD Ameritrade that is no longer valid. 

Three reasons not to subscribe to SMI:

I would not subscribe to SMI if any one of the following applied:

  • You feel that the Bible teaches Christians should practice faith based investing.
  • If you are new to investing.  I’ll preface this by saying that subscribing might be a good decision, but at least for the first few years I would use an advisor who will give you some guidance.  If you want to learn more about investing and the market, then the newsletter subscription would be of value to you.
  • You are paying off debt and do not plan to actively invest over the next few years.  Even though SMI does have an article that addresses those in this category, you would be better served focusing your time reading material like The Total Money Makeover: A Proven Plan for Financial Fitness or Debt Free Adventure.

Cost:

The Sound Mind Investing Newsletter costs $79.00 per year.  If you also want to add a web membership you will pay an additional $4.50 per month.

If you prefer to get just the web membership (you can download the newsletter online plus access to a ton of other information) the cost is $8.95 paid month by month.

Obviously for those who are comfortable with the Internet I recommend the web membership.

From the SMI website:

The average price of the financial newsletters featured in the authoritative Hulbert Guide to Investment Newsletters is $234 per year. Our Print Subscription + Web Membership costs just $133 per year making SMI an unbeatable bargain. Your total annual cost, including the web membership, is $100 less than typical investment newsletters.

I highly recommend the web membership as you will have access to three years of archived newsletters.  That is a ton of valuable resources for this already low price.

Start increasing your investment return – subscribe to the SMI Newsletter.

This post does contain affiliate links.  I have been a user, subscriber, fan, and promoter of the SMI team before they introduced their affiliate program.  You can read this post where I talk about why I fired my financial advisor.  In that post I explained that I subscribe to the SMI Newsletter.

Anyone else subscribe to the Sound Mind Investing Newsletter?  What do you think?

Comments

  1. says

    Craig,

    I haven’t read or used the SMI newsletter, but it seems like you did a thorough review here.

    I would caution you, however, against using 5 years or even 10 years as a long-term point of view when evaluating investment returns. It is very possible to encounter a lucky streak within those periods of time. In the investing world, 5 or 10 years is not long-term even though the financial media often touts it as such. Frankly, you can’t have a reasonable idea of the long-term success of any investment (or strategy) until you’ve got at least 20 (but preferably 30) years of history behind it. I have some data I can show you sometime to explain this logic.

    Still, this is a great summary format and very helpful for your readers.
    .-= Paul Williams @ Provident Planning´s last blog ..Tithing in the Bible: The Statute of Tithing (Numbers 18:20-32) =-.

    • Craig says

      Paul,
      Thanks for your comment.
      Interestingly the SMI folks take a different stance. They feel as thought long-term results contribute little to today’s results.
      They have an effective strategy (upgrading) that goes against what I always commonly believed about investing. Short term preformance is a better gauge to tell us how a fund will preform in the near future. For example, some funds are more agressive and others more conservative. As a result some will preform better in weak markets and others in stronger markets. Upgrading owns mutual funds that are out preforming their peers within the last year.
      Again, it goes against conventional wisdom, but has outpreformed the market something like 10 of the last 11 years.

  2. Craig says

    Paul,
    One other thing I should mention is that I had only been investing for five years and I was comparing my returns to those of the SMI returns. I did not have a larger time period to compare returns as I was limited by my investing time frame.

  3. says

    Craig,

    I don’t know anything about their strategy. I wasn’t commenting on whether the theory behind their strategy will work. My point was that you need to look at more than 10 years of their results with their strategy in order to correctly conclude whether it has been successful because it works rather than pure luck. It is possible for an investment strategy or guru to have a 10 year streak and then absolutely bomb over the next several years (e.g., Bill Miller).
    .-= Paul Williams @ Provident Planning´s last blog ..Tithing in the Bible: The Statute of Tithing (Numbers 18:20-32) =-.

  4. Tim says

    Craig,

    I agree with Paul. Also, you have to be careful about how you pick the time period. SMI started publishing in 1991 and their results from 1991-1998 significantly underperformed the market.

    Perhaps the years from 1991-1998 aren’t representative of their current strategy but I doubt that the years from 1999-2007 are going to be useful in predicting their performance in the future.

    Tim

    • says

      @Tim
      Thanks for the comment.
      I should mention that SMI has multiple strategies. I suspect it would be hard to argue that their “Just the Basics” strategy under-performs the market since it uses passive index funds. But, this article does focus on the upgrading strategy.
      I’ve tried to find results from 1991-1998 and I’m having trouble. Can you pass along that data or a source? I do think that is very interesting if they completely ignore those years. I guess it is typical that companies only provide info from the previous 10 years.
      Ultimately, the question I have is how far does one need to look into historical performance to get an idea of future performance? Does the further you look really become a better indicator of the future? Does the period form 1991-1998 give me a better idea or the period from 1999-2007? I feel like the more recent date indicates what they are currently doing.
      In my case over the last two years my investment performance has been better than when I track my current investments with what I previously owned.

  5. Tim says

    I linked to the review from your comparison of passive vs active so I intended to focus on passive(JtB) vs active(Upgrading).

    Someone on SMI’s forum posted the results from 1996-2001 and I noticed a note on it saying that the previous results were listed in Feb 1999 newsletter so I emailed SMI and requested a copy of it.

    Most companies provide information from fund (or newsletter) inception. At the risk of misstating SMI’s position they dropped the previous years because they changed the strategy in 1999. I tend to think the strategy change was a result of the underperformance therefore the underperformance was at least the indirect cause of dropping those years. Regardless of the reason it points out the difficulty active management has in beating passive management.

    I would say the issue of how far back to look depends on what is being advertised. If I saw a mutual focusing on a 20 year history I would look at more recent history. If I saw one focused on a 3 year history I would look longer. If I saw one focused on 10 years I would look shorter and longer. By my calculations JtB and Upgrading are roughly equivalent over the last 2 years and over the last 19 years. So I think it’s very likely that Upgrading’s performance in the future will be closer to JtB that it is to beating it by 5%.

    • says

      Tim,
      Thanks for the follow-up and the fantastic information. I think anyone who reads this post will find this information very helpful.

  6. Andrew says

    Craig, have you found a website that allows you to easily display/compare historical returns of a mutual funds? I’d like to give such a calculator a date in history and a dollar amount and have it tell me what that money would be worth after x number of years.

    • says

      Andrew,
      I don’t know of a site like that and a few searches on Google didn’t show a very good result. I use my brokerages (Td Ameritrade and Schwab) and both allow me to calculate the gains and I can easily figure out how much that would be based on a specific dollar amount.

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