Investment newsletters: Their numbers are legion, and in good times they seem to spread and multiply like an insidious virus.

Some are excellent; some are harmless; and some are downright dangerous, financially speaking.

Because there are so many newsletters, most people may find it difficult if not impossible to select the appropriate one for them, said Mark Hulbert, editor of Hulbert Financial Digest, which ranks newsletters.

That’s right – there’s even a newsletter about newsletters.

“The publications range from kitchen-table affairs all the way up to those with research departments that would be the envy of a graduate school finance department,” Hulbert says.

Investors who followed the stock recommendations of the best of the lot would have seen annual returns of 44 percent over the last five years, and 16 percent over the last 20 years, well above the return of the Standard & Poor’s 500 index.

But the vast majority of newsletters – about 80 percent of them – don’t even match the performance of the S&P 500 over long periods. That also holds true for mutual funds, investment advisers, brokers or anybody else who claims special investing savvy. And that, says Hulbert, is an important first step in gaining wisdom.

Hulbert monitors and ranks about 160 newsletters for which subscribers pay an average of $135 a month. Most publish monthly, have only a handful of employees and typically are six to 12 pages long.

Circulation ranges from about 1,000 to 5,000, but newsletters published by some of the so-called stock gurus, such as Louis Rukeyser, have circulations of more than 100,000. That’s rare, though.

Kevin Kennedy, editor of Coolcat Explosive Small Cap Growth Stock Report, who started his newsletter in 1997, is a more typical newsletter publisher. He basically relies on the performance of his newsletter’s so-called model portfolio to bolster its current circulation of 1,500.

Coolcat, with annual returns of 44.5 percent over the last five years, was the best performer during that period, according to Hulbert.

“I haven’t wanted to toot my own horn, because I haven’t been around that long,” Kennedy said from his home office in Sanger, Calif. “But now I’m thinking about doing some marketing and maybe even opening an office and hiring someone to help.”

He is Coolcat’s only employee. (The name, by the way, comes from a character in one of his daughter’s school plays.)

Kennedy’s investing strategy is to find small-capitalization stocks that are hitting new highs on heavier-than-average volume. His newsletter typically begins with a general comment about the market and perhaps some upcoming earnings news, and then he just lists the stocks that meet his screens. There is little or no analysis.

His January newsletter has five new stock listings, including Zoom Technologies Inc., a telecom equipment maker, and RF Monolithics Inc., a Farmers Branch, Texas-based maker of radio frequency components.

“I just give a brief description of the company,” Kennedy said. “I don’t do a lot of fundamental analysis of earnings and stuff like that.”

One of the nation’s longest-running newsletters, and another top performer, is The Prudent Speculator, based in Laguna Beach, Calif. Unlike Coolcat, The Prudent Speculator offers its 7,500 readers a heavy dose of analysis in its Stock of the Month section.

The Prudent Speculator has average annual returns of 16.3 percent over the last 20 years, making it the best long-term performer tracked by Hulbert.

It should be noted that only 19 of the 36 newsletters that Hulbert began tracking in the mid-1980s still exist today.

The biggest expense for most newsletters is marketing, or more specifically, buying the mailing lists to get access to prospective subscribers.

“Subscriber acquisition costs are very high,” Buckingham said.

“Newsletter writers are constantly looking for ways to get their message out.”

Most newsletter publishers buy names from subscriber list brokers, said Tom Bishop, editor of BI Research, a newsletter based in Redding, Conn.

He said a list of 1,000 names costs about $150, and he typically buys 10,000 names at a time for about $1,500.

BI Research charges $110 a year, and for an additional $60, Bishop sends e-mail updates. His newsletter ranks just behind The Prudent Speculator in annual performance, with a 15.7 percent return in its model portfolio over 20 years.

Several newsletters focus on mutual fund investing, and the big dog here is a long-running San Francisco-based publication called No Load Fund X.

This newsletter, which began in 1976, has more than 10,000 subscribers and charges $149 a year, editor Janet Brown said.

Any newsletter publisher would be hard-pressed to find a simpler strategy than the one employed by No Load Fund X.

Brown simply recommends the five mutual funds that have performed the best over the last 12 months.

“It’s really momentum investing and a simple way of staying with what is doing well,” Brown says.

“With some newsletters, it’s difficult to employ the advice they give, but our strategy is simple, and it works.”