Disclaimer: This blog post reflects my personal experience with the “verified investing alerts” service and is not intended as financial advice.
Intro
Shortly after I started earning my own money as a teenager I became interested in the stock market and I must have opened my first trading account right after I came of age (18 years-old in Germany). My first investments were some mutual funds that I got recommended by my local bank representative as well as funds that I found interesting because of personal interests (e.g. technology). Over the time, I started to become more confident and started to invest also in specific large cap stocks without taking huge risks. All my investment decisions were made using a rather “fundamental” analysis approach without using any official practices that qualify for such an evaluation.
Fundamental vs Technical Analysis
Fundamental and Technical Analysis are the 2 most common types of analysis that is used to evaluate stock investments. The fundamental analysis is rather a comprehensive analysis that tries to determine the fair or real market price of an organisation based on various different factors. These include the business model, economic situation (e.g. competition) and financial situation of the company. The technical analysis on the other hand is rather an evaluation of the price trend and chart patterns that can be drawn from the historical trading activity. It is often attributed to market psychology that predicts the future development based on the investor’s emotions.
“Verified Investing Alerts” service
The Verified Investing Alerts service is making trading decisions based on a technical analysis called the PPT (Price Pattern Methodology). Also a bit outdated, you can watch this Youtube video to get a rough overview of how such an analysis looks like in practice.
Verified Investing Alerts Overview
- Roughly 5 to 10 trades per week
- Long and short trades depending on the current market situation and individual stock’s price development
- Only large cap stocks and ETFs typically from the S&P 500 or NASDAQ 100 index
- Alerts send via email or mobile app (but mobile app works pretty bad)
- Daily analysis video looking at the market indices and some specific stocks and commodities like Gold, Silver, Natural Gas and BTC that takes between 10 and 15 minutes
Personal Review
I’ve started using the Verified Investing Alerts in August 2022 and can report mostly positive things about it but I would not recommend it to everyone. There are a few obstacles or important factors that you should consider which I outline in more detail below.
Most importantly, looking at my 2022 trades the track record is over 90% of successful trades with an average profit of about 9%. In total I only had 3 trades out of 36 that led to a loss. The trade record for 2023 looks very similar so far.
Stick to Portfolio size!
There are a few things that you should be aware of when using the service. Trades often start with a small position (when a stock hits a “resistant” or “support” level) but in many cases the stock actually moves further to the same direction. That means a 2nd, 3rd and sometimes even a 4th trade is performed in order to lower/increase the average price. Therefore it is very important to stick to given portfolio sizes that are sent out with each trade alert.
In general I’d advise anyone to start with a rather conservative approach with lower trading amounts in order to get familiar with the service before spending the exact recommended portfolio size.
Be patient!
In many cases you are not able to execute a trade at the same price that is mentioned in the trade alert as the price has already changed by the time you see the email alert. In my experience the price often goes back to the target price that is sent in the alert so patience is often needed. Even if the price does not reach the target price at the same day it often does on the following day. In general, I’d not try to follow a trade if the price has changed negatively more than 2% from the target price. In that case it’s better to wait for another trade instead of entering with a less favourable price.
Use low fee broker with a good mobile app
Using a low fee broker with a good mobile app is very important when considering using a trading service like the “verified investing alerts”. There will be situations when you don’t have access to a normal computer and you will be forced to execute a trade via the mobile app. Especially when a trading alert is being sent for a stock that had been already traded before and 2nd or 3rd trade is used to improve the average stock price, it is highly recommended to follow that trade to reach a similar average price.
I personally recommend using Interactive Brokers, especially when you live in Europe. They offer low commission trades on US stocks without any monthly inactivity fee. In addition you get a very competitive interest payment on uninvested cash. But most importantly, the mobile app works very well and it’s easy to trade on your mobile phone.
If you use my referral link you can earn up to $1000 of IBKR stock. https://ibkr.com/referral/dominik362
Confusing “stop” targets
On the critical side I made the experience that “stop” prices are not really meaningful in the trade alerts. I once emailed the support team asking why a stock had not been sold with a loss after reaching the “stop” target. The response was that the stops are based on the “Confirmation Principle” which is a key aspect of the used PPT methodology. Without knowing specific details about how this works in practice I find it rather confusing and I don’t see a point of mentioning a “stop” target if the stop targets are not used for stop loss trades.
Portfolio size matters!
Another important factor is the size of your portfolio. Currently, the “verified investing alerts” service costs $99 / month or $999 / year. This means you need to generate trading gains of $99 (after taxes) each month to make it worthwhile using the service.
Let’s illustrate this with a simple example of a portfolio with a size of 20,000€. If you invest 1% (200€) which is the size of a typical trading alert, you would earn 20€ on a trade that makes a 10% gain. This would require at least 5 successful trades of the same size per month just to cover the fees (ignoring capital gain taxes). Therefore I recommend having a portfolio size of at least 30,000 or ideally 50,000€ to make it worthwhile using the service.
Some trades stick around for a long time
Another negative impression is that some rare trades have been “lying around” for several months. For instance I followed a trade on shorting the MCD (McDonald’s) stock that had been sent out early November 2022. In April 2023 a 2nd and 3rd trade had been executed to increase the average price. About 10 months afterwards the open trade still has not been closed and without renewing the trading service I won’t find out when the stock will eventually be sold. Since it’s a short trade I also have to pay fees for borrowing the stock from my broker which can lead to a significant amount of fees.
Weekly Time investment of roughly 5 hours
If you plan to use the service you should calculate with a weekly time investment of about 5 hours per week. There are daily analysis videos which take about 10 to 15 minutes each and there are frequent live broadcasts where subscribers can submit their questions. You will also need to check your emails regularly to make sure to get notified about the trading alerts. If you use an app like Slack or Discord I’d recommend you forward the trading alert emails to those tools to make sure you don’t miss any trading alerts.
Final remarks
Overall, I can completely recommend the “verified investing alerts” service as a great way to generate some additional income to your day-to-day job. I’ve been using the service for a bit longer than 1 year now and I’ve increased my overall portfolio size by about 10% within 1 year.
It is important to note that any trading service comes with a risk and it is very important to control your emotions and consider the above mentioned things before starting the service. Trading at the stock market always involves risks and you should never invest any money that you can’t afford to lose!
