Jim Cramer’s Action Alerts Review

Action Alerts is a newsletter providing recommendations for online stocks. The service offers the investment advice and stock picks of Jim Cramer. He is a popular analyst, host of Mad Money on CNBC, TheStreet.com founder, experienced hedge fund manager and best-selling author. The investment advice is based on the strategies he actually uses. The investment philosophy is conservative, with a focus on retired investors.

All of the recommendations for purchasing and selling stocks are intended to benefit the readers of the newsletter. Everything is executed through the charitable trust for Action Alerts Plus. This service has become popular for investors due to the advantageous tips and recommendations. Jim Cramer is one of the best-known Wall Street personalities. He began investing in the markets using a nontraditional approach.

When he was still attending law school, Jim Cramer started promoting his picks for stocks using his answering machine. Eventually, he received $500,000 from the owner of The New Republic to invest. Within two years, he secured a profit of 30 percent. He then went to work for Goldman Sachs as a stockbroker prior to establishing his own hedge fund.

The Platform

Jim Cramer displays his recommended portfolio by discussing the best stocks to purchase or sell. An analysis is provided regarding the performance of the stocks in the portfolio. The analysis relies heavily on scaling positions while analyzing the details of the individual picks. This newsletter is an excellent option for active and retired traders interested in both medium and long-term positions.

Action Alerts is also popular among the less experienced traders requiring guidance from analysts with more experience regarding which stocks are beneficial during any period of time. Subscribing to the service provides traders with the insight necessary to be successful in this industry.

The Trading Strategy

The investment strategy recommended by Jim Cramer focuses on making investments using a balance between growth and value stocks. This approach is ideal for both medium and long-term investments. The recommended portfolio is divided into different categories including income, growth, value and blend stocks.

The specific distribution of stocks varies according to the time period. A good example is value stocks. The recommendation of Jim Cramer is a grouping of core holdings. This is a representation of basically sound companies the investor can hold for several years at a time.

The Indices

The strategy recommended for indices is scaling in and out of different positions. A lot of the platform recommendations regarding trading actions are purchasing more of any given stock than currently contained in the portfolio when there is a pullback. During strong trading days, the recommendation is to sell stocks piecemeal. This strategy is extremely effective for mitigating the risk.

It is important to note more active trading is required to be successful than with some of the other recommendations. The strategies offered by Action Plus are generally successful. When the stocks recommended in the past are considered, the gains have often been more than 20 percent. I believe the benefits shown by the historical data are an important consideration when deciding whether or not to subscribe.

The Features of the Action Alerts Portfolio

The portfolio recommended is in a style similar to a spreadsheet. All of the currently recommended stocks are displayed in a listing created by Jim Cramer and his team. I have found this list effective for looking at the returns of a specific stock in my portfolio easily and quickly. I can review both the overall weight of the stock in my portfolio and the price target recommended.

The best way to find stocks is by sorting the list into the most current purchase dates. This enables traders to view the complete history of trades and closed positions Actions Alerts has made. The idea is to see the historical returns for any stock of interest. Although certain stocks have resulted in a loss, a lot of them beat out the S&P 500.

There will be both losses and wins when investing in stocks. The reason I recommend Action Alerts is because the newsletter has enabled me to receive more wins than losses. No, there is no guarantee I will come out ahead of the market, but the picks are chosen to help me do just that. I also took Jim Cramer’s advice to heart, and initiated a risk management strategy of my own.

I have found one of the most unique aspects of the recommended portfolio the rating issued for every stock on a scale from one to four. This shows if purchasing more of a specific stock is recommended, if I should sell or wait for a pullback. I also use a rating system I established on my own in combination with Jim Cramer’s system to determine the stocks I purchase.

I have found his rating system very effective for providing a much better understanding of the alerts behind any of the stocks.

Alerts and Analysis

Every time Jim Cramer makes a trade, he posts an alert. I have found these alerts one of the best benefits of the newsletter. I like the idea the alerts are not more than a few paragraphs, yet still provide insight as to why a specific trade is recommended during a specific period of time. The majority of these analyses are focused on current news and stock fundamentals as opposed to technical indicators.

In most cases, I read some of the trade alerts issued in the past, the weekly newsletter and external news articles for additional context. Analysis posts are issued on a regular basis. These discuss stocks the team is already holding in their portfolio or currently watching as opposed to providing recommendations for specific trades.

I have found these posts very similar to the alerts, but more in-depth and longer. The focus is on fundamental changes and current events. This is a good assessment of the risk and potential value of the stock for the future.

The Forum

A forum is run by Jim Cramer and his team. I have found the forum more structured for the analysis team to answer questions instead of looking to the other users for answers.

Weekly Roundups

These are a type of in-depth analysis with the focus placed on the economy and the market as opposed to specific stocks. A summary is provided for important economic indicators, world events, earnings reports and the reactions of investors as to how these factors shape the markets. I have received excellent investment advice, very useful for determining the weekly performance of the market.

The Difference Between Action Alerts and the Other Newsletters

The key difference with Action Alerts is the in-dept analysis focused on using trades for the creation of a balanced portfolio containing growth and value stocks. I have learned by combining the analysis with external news articles and watching the stocks closely, I know when the time is right to buy stocks.

I have found the reasons specific stocks are recommended for active investors at any given time very useful. I appreciate the fact Jim Cramer limits portfolio risks with core holding offers. The difference between growth and value stocks is explained well.

The Bottom Line

I recommend subscribing to Action Alerts for several reasons. First, I have found the recommendations are generally right on target. I have also learned how to build a portfolio with less risk, and a much greater chance for success. I believe subscribing to this newsletter will be beneficial for all different types of investors.

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