The Buckingham Report

Congratulations are in order for Mark Hulbert as his Hulbert Financial Digest (HFD) just celebrated its 25-year anniversary. The Consumer Reports of the investment newsletter biz, Mark performs an incredibly valuable service, acting as the watch dog for an industry fraught with dubious performance claims. In his publication, Mark tracks the actual advice offered by each of the 160+ newsletters that he follows, hypothetically buying and selling just as if he were a subscriber.

Last month via this forum, I wrote about a publication that promises to double your money every year, yet in the latest issue of the HFD, Mark writes that the greatest annualized return any newsletter was able to achieve over the last 25 years was 19.0%. The lesson here is, as Mark puts it, "if anyone says he consistently makes spectacular profits don't believe him." Mark adds, "To be sure 19.0% compounded over 25 years produces an obscenely large number (more than 7,600%, in fact). But 19.0% annually is a far cry from the high double-digit and even triple-digit returns so often touted in the investment arena."

Hopefully, it will not come as much of a surprise to learn that The Prudent Speculator is Hulbert's top 19.0% performer and we are pleased that The Prudent Speculator also tops the charts on Hulbert's lists for 10 and 15 years, with annual returns of 24.5% and 22.3%, respectively.

Obviously, these numbers are terrific, especially as Hulbert also reports that the 19.0% 25-year record is better than any mutual fund over the same time span. Interestingly, according to mutual fund information source Lipper, Inc., the top-performing mutual fund, CGM Capital Development had a 16.9% annualized return! In second place was Fidelity Magellan with a 16.6% annualized return.

Of course, making 19.0% per year doesn't sell as many newsletters as get-rich-quick promises. In fact, Mark said just last night in a MarketWatch.com article that he had just received a newsletter solicitation touting, "300% GAINS In the Next 18 Months." Sounds fantastic, but I am perfectly content growing wealthy slowly. After all, I invest right along side our subscribers via my Buckingham Portfolio and I know that it is next to impossible to triple or quadruple our money in a short period.

For what it is worth, I would be very happy making 300% over the next eight years. Why do I say this? Because that would work out to a 19.0% annualized rate of return!

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The information contained herein is believed to be reliable. However, such information has not been verified by us and we do not make any representations as to its accuracy or completeness. Neither the information, nor any opinion expressed, shall be construed to be or constitute an offer to sell or a solicitation of an offer to buy any securities. Opinions expressed are those of John Buckingham, which are subject to change and are not intended to be a forecast of future events, a guarantee of future results, nor investment advice. Past performance is no guarantee of future results.

You should not assume that the future performance of any specific investment or investment strategy will be profitable or equal to corresponding past performance levels.

A newsletter’s Hulbert Financial Digest’s Ranking is based on an average of its several portfolios in the event it recommends more than one (and includes portfolios that the letters have discontinued). Through 06/30/05, The Prudent Speculator is ranked #1 out of 79, 53 and 13 newsletters monitored for the 10, 15 and 25 year periods and #2 out of 30 newsletters monitored for the 20 year period, respectively. Hulbert currently monitors in excess of 160 newsletters. For more information about The Hulbert Financial Digest call 866-428-6568 or go to www.hulbertdigest.com .

The Buckingham Portfolio is managed by John Buckingham and is leveraged and real. If a client or subscriber does not use leverage, the client or subscriber’s total returns could be materially different. The Buckingham Portfolio has been in existence since 12/31/02.

The Buckingham Portfolio performance results calculated by actual total return including effects of margin leverage, margin interest charges and trading costs but not advisory costs.

About Al Frank Asset Management

Al Frank Asset Management, Inc. (AFAMI) is an Investment Adviser, registered with the Securities & Exchange Commission and notice filed with the State of California; is editor of The Prudent Speculator (TPS) newsletter, editor and publisher of the The Prudent Speculator TechValue Report (TVR) newsletter, and is the Investment Adviser to two value oriented no-load proprietary mutual funds.

Al Frank Asset Management, Inc. is committed to assisting our customers build wealth. We are a leading resource for value-based investor information in the financial community, where we combine our simple, proven philosophy of buying under valued securities for their long-term appreciation with our experience, hard work, and intensive research to give you actionable investment information that can be used on a daily basis.

For information on separate account management, please call us toll free at (888) 994-6827. Or, visit us at http://www.alfrank.com/.