What is a Market Letter?

Also known as an advisory newsletter or a brokerage newsletter, a market letter is a publication that contains timely information regarding market conditions, investment news, and sometimes recommendations that investors can utilize in trading activities. In some cases, the text of the letter is prepared by brokers and sent out to clients of the brokerage firm. At other times, the market letter is an independent effort that is prepared by one or more industry analysts and made available to investors by way of a subscription. Investment newsletters of this type may focus on a particular type of investment opportunity or offer news and commentary covering a wide range of options.

A basic market letter is a relatively short document that is published on a consistent basis. While there are examples of letters that are published daily, many publish on a weekly or semi-weekly basis. The contents of the letter will vary, depending on the purposes for the publication. For example, a market letter may focus on the real estate market within a given metropolitan area, or include information regarding real estate investments currently available in a state or province. In like manner, an investment market letter may focus on trading activity on a specific exchange, within a particular country, or a specific type of investment, such as stocks or bonds.

Several types of information are found in most examples of market letters. News that is relevant to the subscribers is often the foundation of the publication, with commentary on those events typically included. Along with the news and commentary, there is a good chance that at least a few suggestions regarding buying or selling various assets will also be included. Increasingly, advertising that promotes products such as automobiles, vacation homes, or other high-end products are found in the letters, with the advertising usually adapted to appeal to the subscriber base.

Opinions regarding the effectiveness of the market letter vary. Proponents find that good quality newsletters of this type provide a flow of reliable data that is targeted to the needs of the readers, without the need to find that information by reading several different publications or spending time searching for the information online. Critics note that while market letters were once extremely helpful, access to real time data via the Internet has made the resource all but obsolete. In spite of concerns, many brokerages and independent financial analysts continue to offer market newsletters to their clients.

In times past, the market letter was strictly a print publication. Today, it is not unusual for publishers to offer the letters in both print and electronic versions. In some cases, a small discount on the subscription price is provided if the subscriber opts for the electronic version.