Zacks Investment Research, Inc. 10 S. Riverside Plaza, Suite 1600 Chicago, Illinois 60606

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1 Zacks Investment Research, Inc. 10 S. Riverside Plaza, Suite 1600 Chicago, Illinois 60606

2 Contents Introduction 3 Section 1: The Mental Aspect 5 Section 2: Getting the Most Out of Technology Innovators 6 Section 3: Investment Philosophy & Stock Selection 7 Section 4: Follow the Leader 8 Section 5: How to Read Technology Innovators Alerts 9 Section 6: How to Read Technology Innovators Weekly Summary 10 Section 7: Virtues of Money Management 11 Section 8: Tying it All Together 12 2

3 Introduction: Congratulations on getting started with Zacks Technology Innovators! I m Brian Bolan, Stock Strategist at Zacks, and I m excited about our journey ahead as we take advantage of the many megatrends driving investment profits in the tech sector. Before I review those major drivers, let me explain a couple of things you should know about me. First, I am a former equity research analyst that covered internet and technology stocks for several different brokerages. With this background, this service is a natural fit for me. I have been at Zacks Investment Research as the aggressive growth stock strategist for 6 years. Over that time period I managed two of our most popular Investor Services: Home Run Investor and Stocks Under $10; both of which have seen great returns. Technology Innovators should fit in the middle of the Investor Services and the Trading Services as far as number of holdings and time horizon. What Is a Tech Innovator? It is pretty hard to distinguish between tech stocks that are innovators and others that would not be granted the same label. Let s face it, they are all trying to be innovative on some level, but as they say, the cream rises to the top. Recent examples of tech innovators would include names like Alphabet (GOOG), Apple (AAPL), Facebook (FB), Netflix (NFLX) and of course Amazon (AMZN). I mention these stocks specifically because they are the foundation of FANG. And to answer that question before we get too far along, yes, the FANG stocks will be candidates for inclusion into the portfolio. What Market-Caps Will Be Added? I think the best way to answer that is with a simple all answer. Our long-term Investor Services tend to focus on smaller-cap names while our shorter-term Trading Services are all over the board. With Technology Innovators, we have lots of time on our side and therefore the biggest of big cap names become that much more attractive. The way I am looking at it, we will have a number of core names and some trading stocks. This balance will work best for us when the market is moving higher. It will also work well during flat and down times. The idea is that our core positions won t be impacted as much in pullbacks as they are the biggest of big names. Allocation or Position Sizing Unlike the Trading Services, this service will not offer an allocation for each trade. Subscribers will have to determine how much they put into each individual name and if they want to add to a stock or take some profits on the way up. The rule of thumb is that the positions should be equal-weighted. With 30 names, each stock will have a 3.3% weighting. Investors would be wise to allocate a specific amount for trades in this portfolio, then parcel out the cash as the picks come. 3

4 Trading Frequency We are targeting about 4 trades a month, so some simple math means about once a week and one other trade. This is not a requirement, merely a target. The portfolio looks to top out around 30 names, but here and there we might have a few extra. On the low end I expect 20 names to be in the portfolio at all times, but that number may also change. Twitter Those of you that have subscribed to a service I ran in the past know that I use twitter to alert subscribers to when the next buy or sell was coming. I never give the pick to the public on twitter and I ask that you refrain from asking me on Twitter about the stocks in the portfolio. Messages on Twitter are public and people can see what stocks I am speaking to and which ones I am not (especially the tweets that I do not reply to). So if you want to follow me, do so at but you do not have to become a member of twitter to see my tweets. You can view the tweets on that same page but by joining there can be another layer of interaction. From time to time I will post ideas that are not part of Zacks and not related to the portfolio. Only act on the buy and sell alerts that come directly from Zacks. Text Messages Within the newsletter industry there are institutions that subscribe and get the same text and alerts. Texts come a little faster than s, and s could get delayed based on your computer, your service provider or any number of other reasons. Texts give you the best chance to get into a buy alert as soon as possible. I urge you to sign up for texts via the My Account section of the website. Summary We will be investing in a lot of tech stocks, and the service will evolve over time with core holdings that could remain for months and even years. My commentary will focus on our trades and will also address broader issues in the tech market. I am here to help, so feel free to connect with me over twitter. However, the best way to get a question answered is to me directly at BBolan@Zacks.com, or just reply to the and the team here at Zacks will see that I get it. I look forward to investing in some great tech stocks with all of you! 4

5 Section 1: The Mental Aspect It is important to realize how much investment success is related to what goes on between your ears. There are so many ways to get distracted and to question yourself while trading. You must be in the right frame of mind and have reasonable expectations to achieve success with this or any investment service. So be sure to pay attention to the tips in this section carefully; they will get you headed in the right direction. NOBODY IS 100% PERFECT First of all, there will be losing picks, but if we cut them out early to minimize losses and maximize gains on winners, then we can achieve phenomenal results. A little known fact is that the Zacks Rank, even with its 25% annual return, is only right 56% of the time. We are extremely confident that over time we will produce substantial returns, but it is important that you learn to take the losing picks in stride. COMPOUND YOUR RETURNS Zacks Technology Innovators uses the robust and time-tested foundation of the Zacks Rank quantitative model combined with deep, institutional-level research and analysis to find stocks in the tech sector with high, long-term growth potential. Although the road to huge winners will take time, it is a steady stream of consistent gains that we are hoping to achieve. This is what we call the beauty of compounding and how it works to an investor s advantage. Albert Einstein is said to have called compound interest the eighth wonder of the world and this is a prime example. So don t get discouraged when you are only seeing smaller incremental gains on each respective trade. As time progresses, these steady gains will become our home runs. 5

6 Section 2: Getting the Most Out of Technology Innovators It is our job to provide you with timely and profitable stock picks, but there are steps that you can take to ensure your success with Technology Innovators. Here are a few things you can do to get the most out of the product. 1. Read this guide carefully This guide is your friend. It has valuable information on how to use the product and succeed with the assistance of Technology Innovators. It gives you step-by-step instructions on how to receive alerts and what to do when you receive them. It has important money management tips. 2. Have a working address This is necessary to receive trading alerts. Make sure you can access your in a timely fashion because acting on trades is essential to success. The Summary will be sent around 8:00 p.m. EST, which summarizes the positions as well as what happened on Wall Street during that trading day. Intra-day trading alerts will typically be sent within the first hours of the trading day. Unfortunately, many Internet service providers have software programs that filter out s you want to receive, like Zacks Technology Innovators Summaries. To get optimal delivery of our s follow this link for quick and easy instructions. 3. Have an online trading account We are not advocating any particular company for this, but ideally lower commissions will help you achieve a higher overall return. You will make several trades a month, and high commissions can really eat into your profit margin, especially if you have limited capital. 4. Access the site To access the site, go to and enter your username and password. This will take you to the main page where you can view the portfolio, any pending trades, and the commentary. 6

7 Section 3: Investment Philosophy & Stock Selection Keeping in mind that we are aiming for long-term returns here, we will assemble a visionary portfolio of 20 to 30 stocks across various tech sector industries. When we have the Zacks Rank on our side, we ll pounce. And this may frequently offer you the opportunity to capitalize on the short-term power of the proven Zacks Rank quantitative model, which finds stocks on the move in between their quarterly reports. So while you may want to take the 5-20% gains we can see inside a given 1-3 month Zacks Rank sweet-spot window, I may hold stocks for much longer to realize their full potential. This also means I ll be experiencing their full volatility. But after every sky is falling correction, the powerful assets, brands, and cash-flow franchises come out on top for long-term, strategic thinkers. 7

8 Section 4: Follow the Leader The process to receive our trades is very simple, yet we feel it is so important that we are going to spell it out for you. Here are the four steps: Receive the with the summary or intra-day signal Read the to determine appropriate action Place trades through your broker Follow the s to determine when to sell ACT PROMPTLY = MOST SUCCESS And if you don t beat the market, you can take advantage of our 100% Money Back Guarantee. SPEAKING OF THE GUARANTEE. We feel that if we are not able to live up to our word and help you beat the market then we shouldn t be deemed worthy enough to take your money. So in addition to the 90-day, no hassle guarantee, there is a 100% Money Back Performance Guarantee. There are a few conditions that have to be met first, but the bottom line is that we have to perform. Click here for details. 8

9 Section 5: How To Read Technology Innovators Alerts This strategy will often have a trading alert during the trading day. When a Buy, Sell, or Intraday Alert is sent out, you should receive the alert within the first hours of the trading day detailing what stock or stocks are being added or sold and the rationale behind the move. It is important that you act as soon as you can. Here is an example: Signal = The type of alert. It will be a green ball for a buy alert or a red ball for a sell. Company Name = The name of the company that is being added to or sold from the Technology Innovators portfolio. Symbol = Ticker symbol of stock being added to or deleted from the portfolio. Date Added = The date on which the stock was added to the portfolio. The alert will also show the current price at which the stock is trading, as well as the market cap and industry of the recommendation. Technology Innovators Portfolio Commentary = As part of the alert, Brian will explain his rationale for the buy or sell. You will learn his reasoning for adding or selling the stock. Intraday alerts use the average of the price at the time of the alert and the closing price that day. 9

10 Section 6: How to Read Technology Innovators Summary The Summary provides a wide array of details for Technology Innovators each week. This summary may have new signals as well as the current open portfolio with commentary. This is valuable information as it conveys what our game plan is, why we are in each stock, when to get out and why, as well as any relevant news. This is ed to you around 8:00 p.m. EST. In regards to the price added for the portfolio, Zacks uses the average of the price at the open and the closing price on the day the stock is added and deleted. 10

11 Section 7: Virtues Of Money Management Money management can be the difference between realizing large gains and going broke, even if the winning percentage is the same. How can this be? The key point is that winning investors know to ride their winners and cut their losses quickly, and stick with a plan that has proven to work in the past. Here are a few rules that you can follow to further improve your returns: First of all, don t dump your entire portfolio into these Technology Innovators picks. Only allocate that portion of your capital that can be comfortably devoted to speculation. This portfolio will typically hold positions. You should be able to sleep soundly and act rationally if you are only trading with your speculative money. Keep in mind that reinvesting profits and the power of compounding are your friends in this portfolio. EVER-PRESENT CLICHÉ RINGS TRUE It has been said millions of times before, but it is so important it needs to be said again: Don t put all your eggs in one basket. Even if you are the most brilliant investor in the world, there will be losing trades. The key is staying in the game and building your equity over time in a systematic way. This can only be done when diversification is put to use. Not that we have to remind you, but the main point is that your capital was earned through years and years of hard work. Capital conservation sounds boring, but without it, you are fighting a losing battle. We don t want to see the money you have put your blood, sweat, and tears into evaporate due to lack of discipline. 11

12 Section 8: Tying It All Together It is our goal at Zacks to enhance your trading results via the Technology Innovators service. This booklet touches upon the details of the service and provides several useful tips to realize the vast potential that these stocks hold. We feel it is our job to let you know that we are here to help you get the most out of Technology Innovators. Again, let s go over some of the important points made in this booklet. Small Gains Add Up To Big Results Not Every Trade Will Be A Winner Timeliness Is Of The Essence Money Management Matters Greatly Have A Working Address We Are Here To Help The last point is important as we have free customer support that should be taken advantage of. Additional questions that you may have can be answered by just picking up the phone and giving us a call or ing us: (outside the US, ) or technologyinnovators@zacks.com. 12

Zacks Investment Research, Inc. 10 S. Riverside Plaza, Suite 1600 Chicago, Illinois 60606

www.zacks.com/homerun Zacks Investment Research, Inc. 10 S. Riverside Plaza, Suite 1600 Chicago, Illinois 60606 Contents Introduction 2 Section 1: The Mental Aspect 3 Section 2: Getting the Most Out of