If you judge a stock picking service by the performance then it is hard to beat the Value Stock Guide Premium service. YTD in 2012, till Feb 10, the VSG portfolio has returned 19.02% compared to 6.76% with S&P 500. Of course, as a service that focuses on value investing for a long term portfolio growth, it is also important to look at the long term performance. Since Jun 23, 2009, when the portfolio started tracking at Covestor, it has returned 29.27% annualized compared to 0.68% annualized with S&P 500.

(Full disclosure: I own and operate this service)

VSG Stock Picking Service Gets Better

Performance aside, ever since the launch of the service last year, testimonials have accumulated. Still it was important for me to give access to investors who want to try out the service before committing to a term membership. Over the last two months I have added two new options to the membership. First, a new monthly membership option was added, which should be a great help. I have also now added an option to try out the service for 7 days for a nominal $10. All guarantees stay in effect. So if you are not sure whether this is a right investment for you, give it a try. If you like what you see, stay on. If it is not a good fit, just cancel.

Most investors sign up because they agree with my long term value investing philosophy. Some of the investors may still be wavering, and I understand, so a trial period makes a perfect sense.

For more information and to become a member and get my bargain stock picks, just click on the link.

Greg and Betty run a terrific site at Control Your Cash where they believe that only way to get people to adopt good financial habits is through plain speak. While their approach may alienate a few, who are used to hand holding and coddling, there is only so much of sugar coating you can do that can be effective.

This past week I had my guest post published at CYC where I argue that while successful investing is quite simple, investors often are their own worst enemies. Fundamentally, finding the best stocks to buy now is just half the battle. You also have to know when to buy, when to hold and when to sell these stocks. Investors often get carried away with the market currents and the Wall Street hype machine which kills their returns.

Watch out for other guest articles that are coming out next week on various sites.

Many of us would love to invest our money in stocks and shares but can’t always afford to do so. After all, there is generally a risk involved in investing in stocks and shares due to the volatility of the markets and not everyone is able to take on that risk. However, if you are still interested in making investments but would like to limit the risk to your money as much as possible, one interesting option for you to consider is a bonds and gilts ISA.

What is a bonds and gilts ISA? It is a type of stocks and shares ISA, but in contrast to most other types of investment ISA that invest your money solely in stock market shares, this one splits investments between government gilts and top rated corporate bonds. These types of investment are typically of a much lower risk than stock market investments, and so make an ideal option for people who are looking for a higher rate of return on their money than their regular savings account can provide but who are unwilling to make the move to riskier forms of investment.

The fact that there is less risk attached to this type of share ISA does mean that the rate of return can be significantly lower than the best performing ISAs, but many people find that the lower risk involved offsets this as they want their money to be more secure.

One thing to bear in mind with bonds and gilt ISAs, just as with all other share ISAs, is that the value of the investment can go down as well as rise. However, the bonds and gilts invested in by these ISAs are much more secure than most, particularly when you compare them with what are sometimes called ‘junk bonds’ that some investors put their money into.

This means that as well as being a good investment option for people who cannot afford to take too much of a risk, this type of share ISA can also be a good starting point for people who want to begin making investments but who are wary about jumping straight into the deep end.

If you are interested in a bonds and gilts ISA, you do have to be aware that they are riskier than putting your money into a cash ISA or deposit account. However, they are a relatively low risk form of investment and have the potential to offer a decent return on your money, making them a good choice for people who are looking to get more from their capital with as little risk attached as possible.

All investing is value investing, I have said this before. The only reason anyone buys any stock is that they believe the stock price will go up, or in other words, the stock is worth more than the current price. However, as “rational” people, we like to divide things in neat piles. Or at least create little buckets and try and fit every thing we see in these buckets.  Hence, the pre-occupation with discussing value investing as something entirely different from growth investing.

The approach to analyze an investment might differ. You can either be conservative and pay more attention to the present and tangible, or you can be more optimistic and find value in the future growth projections. I prefer to be on the conservative side, at the same time not being blind to the growth story. Apple seems to be a good example. Its stock has left many a media pundit scratching their heads – should they treat it as a value stock or as a growth stock? The valuation is definitely reasonable, but the growth is phenomenal

The investment universe has changed as well. What used to be seen as a value stock just a few years ago may not be a value stock anymore. In fact, it might just be a crap stock. Good example is financials. Traditionally the stock for retirees and widows for consistent dividends and low volatility, they are now loaded with hidden dangers and toxic sludge. While many investors have wised up, unfortunately many are still exposed to these ticking time bombs by the way of the so called value ETFs and value mutual funds. On the flip side, most growth funds are still loaded with tech stocks, most of whom have already seen their valuations fall from egregious to average to attractive in a matter of a decade.

Bottom line is ignore the labels and know your stocks.

In my earlier article I described how guest posting is working out to increase the readership and engagement at Value Stock Guide. Last week was awesome in terms of guest posts as well as new mentions and syndications.

Guest Posts

I had one guest post out at Financial Highway with advice on what to do when a stock you own falls in price

Another one at Benzinga on the EMH

I have several other guest posts in the pipeline scheduled to be published over the next week so I will update when that happens.

Mentions

The week started off with a nice mention at Kapitall in their article on best dividend stocks. This was then picked up at Investopedia and later at Nasdaq.

Greg McFarlane of Control Your Cash writing at Problogger included a nice mention as well in his article on creating and hosting a blog carnival

Miranda at Planting Money Seeds wrote an article on the best stocks series at Value Stock Guide. Miranda is a Premium member at the Value Stock Guide stock picks service.

Syndication

Trefis.com now syndicates articles from Value Stock Guide. Here is the first one to go live, again on EMH. This article was later picked up at Nasdaq as well.

Finally, I was on the radio show It’s Your Biz with Susan Solovic. Please listen.

Update (Feb 8, 2012): Here are a couple of press releases about the radio appearance 1) PRLog, and, 2) PitchEngine

On Jan 31, 2012, Value Stock Guide Premium membership will cost $799.97/yr or $99.97/month. This pricing is in line with the industry and reflects the premium benefits and superior stock picks that the members receive. Current members will stay at their current subscription rates and will not be affected.

Here are the press releases on this change:

PitchEngine

PRLog

More details are available on the Premium Stock Picks Membership page

January traffic to Value Stock Guide has tripled, compared to the Dec traffic, which in itself was much higher than November. I also streamlined and tweaked quite a few things on the site and as a result, the traffic flow through the website works much better and the readers are finding more relevant content than before. Keeping the readers on site as long as possible, is of course, what every site owner wants. It reflects that the right audience is being attracted and the content is interesting and relevant. For example, I now have visitors that spend 30 minutes on the site on a single visit. This level of stickiness was elusive when I ran Personal Dividends.

FYI, the daily traffic to Value Stock Guide in less than a year of its launch is more than the daily traffic at Personal Dividends after 2.5 years of its existence, and climbing every day. And all other engagement indicators are way better as well.

Perhaps, better focus on a topic or niche has something to do with it. There is a lot of demand for good stock advice.

Sign Ups to the newsletter are up as well. In 2011 I was happy when someone signed up every other day or so. In January I have not gone a single day without a sign up and I have had days with 7-8 sign ups. So January is definitely turning up to the the best ever month for VSG.

A big reason of course is the content, specifically my best stocks for 2012 series. Cool thing about these posts were that I also included a spreadsheet for each screen that readers can download that included much more information than what was provided on the site. And they are still being downloaded. I think this has gone a long way towards putting the brand out there in the visitors’ consciousness, which can only help.

So now, the traffic is up and increasing, sign ups and the sales funnel are better defined and coordinated, the content is stickier and the bounce rate has improved a lot. Brand recognition is improving.

To help along the branding and positioning aspect, and to further introduce new readers to Value Stock Guide, I have started writing guest posts at other respected and relevant blogs. The first post in the series is already up at OutOfYourRut.com. This post talks about the fact that investors need to take complete responsibility for their investing. Other articles are scheduled and I will update when they go live. In February, there will be at least one guest post going live every week, some weeks perhaps more.

Assaf at BestRatesIn.com is helping me with the guest posting. Here is a shout out to him, and if you are in the market to find best cd rates, he has you covered.

Entrepreneurs know it takes money to make money. Most embrace this concept begrudgingly. After all, money spent on advertising could be better spent on purchasing more inventory or visiting more clients. Still, it makes good business sense to advertise and schmooze clients when necessary.

Often, this is where the line between personal and business finances becomes blurred. Shelling out cash for a client's meal directly from the business owner's wallet is a legitimate write-off. Simply turn the receipt over to the accountant and it's done. However, other instances aren't so easily handled.

How does one separate personal and business finances?

• Maintain Separate Accounts
  Business owners will find neater organization and IRS compliance by maintaining two checking accounts: a personal account and a business account. This not only allows for a speedy reconciliation when tax time comes around, it doesn't leave the IRS wondering if any funds were co-mingled. When funds are mixed, even visiting BusinessInsurance.org for quotes on business insurance won't solve the problem.
   
• Apply for a Business Credit Card
  Your business will be allowed to deduct interest on the balance owed when filing the business's tax return. What's more, like a business checking account, it keeps a record of activity. Your accountant will thank you for using a business credit card exclusively because all the information is in one place.
   
• Create a Separate, Distinct Entity
  Sole proprietorships are attractive on many levels. But forming an LLC or S Corporation will erect a barrier between your personal assets and those of the business. These legal entities create a professional appearance among your customers and the public at large. An added benefit is forming an LLC or S corporation is protecting your personal finances and property.
   
• Make the Right Choice
  When it comes to business, keep it all business and leave the personal credit cards, cash and checks aside. In other words, don't pull out the business credit card to charge air fare for a personal vacation to rack up points or miles. Simply use common sense and resist the spur of the moment urge.

As the markets open today up significantly with data on China’s growth and Europe inflation rate dip, this is a great time to reflect what it means to be a small investor. 10 days ago my article on why small investors have an advantage over wall street appeared at Business Insider and the reaction has been really positive. The fact is that in a rapidly changing economic environment like that of today, Wall Street gets caught up in the frenzy of reacting to the news. So many investors try to be in the front of the herd, but most fail, be definition. What is really needed is a disciplined investing process that for the most part insulates the investors from the macro economic trends. This, is quite possible to do and this is where a small portfolio can be quite nimble.

Over the last week, I participated in the following carnivals. I suggest you check them out.

• Carnival of Wealth – Special shout out to Greg at Control Your Cash for being so nice to me since he took over the Carnival from me a few months ago
• Self-Directed Investing for Retirement Carnival – Ken, who runs the AAAMP site and blog is a great friend and I really appreciate his support

To learn more about investing, you can subscribe to the free stock newsletter at Value Stock Guide. Or if you think you are ready to take control of your investments for real, you can sign on to the Premium program to get the really good stock picks that you will not find anywhere else. Before you do, you may want to check out the reviews for Value Stock Guide written by some of the current members.

Sometimes, it is best to just turn the CNBC and Bloomberg off and stop reading the quotes. Or maybe I should rephrase this. It is always best to ignore the daily or hourly or by the minute barrage of data from the markets. This data does not mean anything. It is not information.

I have tremendous respect for all the chartists and technical traders out there. This is an entire field on its own that tries to impose some sort of a meaning (or orderliness) to what is essentially random stock price movements on a daily basis. The way I see it is that it works at times, but only because a lot of investors believe that it does. It is self fulfilling in many respects. For example, if 100s of traders see a particularly bullish indicator on a chart, and they all rush in to take advantage of this signal, the stock price will surely rise as demand goes up. It works until it works. Then it stops and reverts to the mean.

Smart long term investors leave this short term play on price movements to the professional technical traders and solely focus on the “mean”.

In the short term, the markets are seemingly random, and the stock prices are a result of demand and supply forces acting within the small slice of time. In the long term, the stock prices move  on a path that is defined by the value the company creates for its shareholders or the value that the company already possesses. This is the “mean” that all short term trades work to converge the price to. When the price gets too off-whack with the mean (or the intrinsic value of the stock), it creates an opportunity for a value investor to profit from by buying or selling the stock.

Essentially, an investor should focus on estimating the intrinsic value of the stock and make a decision to purchase or not. Once a purchase is done, the investor is wise to ignore the daily flux and all the market noise and stick with the investment as long as the intrinsic value does not decline.

Both technical traders and fundamental investors are essential for the smooth functioning of the stock market. And both can win on the same stock. The question is, what kind of an investor you are?

If you are a long term value investor, you do not have to worry about the traders or even the computer generated trades. They do a great job of creating liquidity in the market.