The Face of Action Alerts Plus – Jim Cramer:
The Action Alerts Plus (AAP) portfolio is controlled by former hedge fund manager, Jim Cramer. He is now a TV personality (host of CNBC’s “Mad Money”, co-anchor of “Squawk on the Street”, etc.), best-selling author (Confessions of a Street Addict, Get Rich Carefully, etc.), and financial media advocate (co-founder of TheStreet.com) – just to name a few of his many accomplishments.
Expert Education→Professional Analysis→Profitable Investing
Cramer’s Director of Research, Jack Mohr, co-manages the AAP portfolio with him and is responsible for daily management, including macro strategy, portfolio construction, and stock selection. Mohr comes from an investment banking background at Barclay’s and has has been featured on CNBC, ABC News, CNN, Fox News, and Fox Business during his time working with Cramer.
$2.5 Million in Charitable Contributions Since 2011:
The Action Alerts Portfolio is a Charitable Trust, meaning the capital gains and dividends earned are donated directly to select charities. Since 2011, $2.5 million in charitable contributions have been made thanks to Jim Cramer, Jack Mohr, and the rest of the Action Alerts Plus team.
Jim Cramer has deposited his own money into the AAP portfolio, but in March 2005, he irrevocably conveyed the funds to a charitable trust. He still has full discretion over all securities contained in the trust, but as mentioned above, all gains are donated to charity at the end of each year.
The Focus is Long-Term Holds on Blue-Chip Stocks:
Here’s what I like most about Action Alerts Plus. While the focus is long-term holds on dividend-paying “blue-chip” stocks, the portfolio is still actively managed on a daily basis for opportunities to add, trim, hold, or sell off positions completely. To “buy-and-hold” without analyzing/scrutinizing positions on a consistent basis is simply foolish, but the AAP team provides a steady dose of in-depth research, which allows you to take immediate action on opportunities while avoiding pitfalls.
The ideal time horizon upon the purchase of any stock is typically 6-12+ months. The ultimate goal is to build a portfolio with a low turnover rate. Cramer elects to invest in companies that pay dividends because they tend to outperform the market over the long term. He personally recommends a portfolio size of at least $5,000 for true diversification – a common question amongst first-time investors.
Action Alerts Plus Portfolio Performance – Annual Returns:
The Action Alerts Plus portfolio is currently valued at over $2 million. Discounting the partial trading year in 2001, the average annual return is roughly 5% (not including dividends). The chart below depicts AAP performance data versus the S&P 500 since inception:
The Advantages of Following Action Alerts Plus:
Friday Bulletins: At the end of each week, Cramer and Mohr release the “Weekly Round-Up”, which discusses market overview, open positions, and the upcoming economic data schedule in great detail. Nobody is left in the dark as to what their thoughts are concerning the current market environment, as well as each and every position they’re currently holding.
Monthly Members-Only Calls: Thanks to member feedback, the AAP team has begun holding members-only calls on a monthly basis. This follows a similar structure to the Friday Bulletins, including discussions on market overview and open positions, but also allows for real-time Q&A sessions. Of course, you can always contact Cramer and Mohr directly via email as a member as well.
Advanced Notice on Trades: They say that no one plays with an open hand on Wall Street, but Jim Cramer is proving that notion wrong. Each member is notified via email well in advance of any moves being made in the AAP portfolio – you no longer have to worry about being “late to the party”.
Diversified Portfolio Construction: The Action Alerts Plus portfolio holds positions in every major sector of the market. Depending on their outlook on each sector, they “weight” their holdings appropriately. For the ones they think will outperform in the long-term (6 months to 2 years), they go heavier on, and the ones that they’re concerned will underperform will carry a lighter load. Construction of the portfolio can always be adjusted if and when their outlook changes.
30-Day Money Back Guarantee: Upon signing up for Action Alerts Plus, you will be granted a 30-Day money back guarantee. In addition to that, you will receive a handful of special bonuses (special reports, books, etcs.), all of which can be kept if you decide to cancel your subscription. If you’re on the fence about joining, there’s really nothing to lose and everything to gain.
Honesty and Integrity: If you dig down to its core, Action Alerts Plus is a long-term investing newsletter that provides guidance from two unbiased professionals, Jim Cramer and Jack Mohr. Every position they enter has to be spoken for on a weekly basis at a minimum. If they make a mistake, they’re not afraid to discuss it. There’s no hiding from neither the good nor the bad.
The Wrap Up – Is Action Alerts Plus Worth the Subscription?
Action Alerts Plus is nearly two decades old. If the longevity of the service alone isn’t enough to prove its legitimacy, then I’d recommend taking another look at the portfolio’s historical performance as well. Through education, consistent discussions, and active management, AAP truly gives the average individual investor an inside look at how professional portfolio managers think. Armed with that knowledge, investors can develop their own diversified set of holdings in an attempt to beat the market. These are well-known, high-volume stocks that have the potential to not only produce capital gains, but consistent dividend income as well.
Best of all, Jim Cramer is absolutely obsessed with the market and your success within it:
He Believes That You – and Every Individual Investor – Have the Potential to Achieve Your Financial Goals. All of Them. ~ Jack Mohr
Are you ready to create a diversified portfolio of blue-chip stocks like a professional portfolio manager? Please leave any questions or comments concerning Action Alerts Plus below.
Written by Matt Thomas
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I haven’t done much investing myself except for mutual funds and retirement savings plans. This looks like a pretty steady plan. I’ve seen Cramer on TV before and he sounds like he knows what he’s doing. I really love how he’s giving away the the gains to charity. That’s really awesome!
Hi Yaki. I agree with you completely. The fact that gains from the Action Alerts Plus portfolio go to charity at the end of each year really clarifies Cramer’s intentions with this advisory service – there’s no personal greed behind it. He wants to help you, the average investor, as well as various other philanthropic ventures close to his heart. You don’t find this being the case for many other newsletters out there, in fact, it’s the only one I’ve come across so far. Take care!