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An Automated Process That Nudges Performance Higher
The Kelly Letter’s enhanced rebalancing guides you to buy stocks low and sell them high, through the power of price reaction alone. The farther stocks fall, the more the letter signals to buy. The higher they rise, the more the letter signals to sell. Repeated quarterly, this process nudges your performance higher to beat the market over time. See the plan in action in the current performance chart above.
A Longtime Subscriber Reports
My compound annual growth rate (CAGR) on the letter is back to 23.5% since I began following the letter at its start years ago, helped by the great recovery from the 2022 crash. Keeping up with the CAGR helps me when the market is down and I can still see that it is not so bad after all. I don’t think it ever got much below 15% in 2022 — that ain’t bad either. My other portfolios rarely ever got above 15% CAGR and the letter never got below it. No matter the ups and downs, 23.5% CAGR is awfully damn good. Thanks!

John Prather
28 December 2023
50+ Years of Investing Experience

Total Returns Compared

2019 2020 2021 2022 2023 $10,000
The Kelly Letter 56.7% 49.4% 37.2% -48.7% 80.9% 30,681 25.1%
Nasdaq Composite 36.7% 44.9% 22.2% -32.5% 42.7% 23,625 18.8%
S&P 500 31.5% 18.4% 28.7% -18.1% 24.9% 20,727 15.7%
Hedge Fund Index
9.9% 13.6% 10.5% -5.1% 5.9% 13,864 6.8%

Hello and welcome! I’m Jason Kelly.
I wrote the bestselling Neatest Little Guide to Stock Market Investing and The 3% Signal, and spent years developing a rules-based approach to the stock market that reacts to quarterly price changes. If you’re looking for an easy-to-manage, high-performance strategy that enables you to spend less time worrying about your financial future, this is for you. Many members say they wish they’d heard of this years ago so they wouldn’t have wasted time and money following unreliable media tips. Let’s get systematic!

I Put Volatility to Work — Automatically

My simple strategy uses just two funds, one for stocks and one for bonds, and sets a quarterly growth target for the stock fund. Once per calendar quarter, the plan looks at its stock fund to see if it has exceeded its growth target or fallen short of it, then reacts accordingly. Quarterly surpluses are sold and quarterly shortfalls are bought. Proceeds from sales go into the bond fund, and are used later to pay for stock-fund purchases. This process is shown on the chart to the right. →
Click here to see a larger image.

Introduction to The Sig Systems

The Kelly Letter Runs Four Variations of The Signal (Sig) System

  • Conservative
  • 1x Leverage
  • SmallCap Stocks
  • Quarterly Schedule
  • Rebalance to a
    3% Growth Target
  • No Need to Manage Leverage
  • Bold
  • 2x Leverage
  • MidCap Stocks
  • Quarterly Schedule
  • Rebalance to a
    6% Growth Target
  • Rules to Manage Leverage
  • Aggressive
  • 3x Leverage
  • Nasdaq 100 Stocks
  • Quarterly Schedule
  • Rebalance to a
    9% Growth Target
  • Rules to Manage Leverage
Income Sig
  • Income
  • 3x Leverage
  • Asset Mixture
  • Quarterly Schedule
  • Rebalance to a
    Fixed Allocation
  • Surplus Skim from Leverage

Here’s How the Sig System Works

1. Check Prices

Is your stock fund’s price above or below its quarterly growth target? If above, it’s a sell signal. If below, it’s a buy signal.

2. Generate Signals

The quarterly growth target of the plans is 3% for 3Sig, 6% for 6Sig, and 9% for 9Sig (hence their names). You will sell stock-fund surpluses above these amounts, and buy shortfalls below these amounts.

3. Receive Orders

Your spreadsheet (template on the subscriber site) or the easy calculator (also on the subscriber site) will tell you how many shares of your stock fund to sell or buy, and how many shares of your bond fund to buy or sell.

4. Place Orders

If the signal is a stock-fund sell, you will move proceeds of the sale to your bond fund in the following order of events: sell shares of stock fund, buy shares of bond fund. If the signal is a stock-fund buy, you will generate buying power by selling shares of your bond fund, then use the proceeds to buy shares of your stock fund, in the following order of events: sell shares of bond fund, buy shares of stock fund.

5. Wrap Up

When you’re finished, you will note the prices of this quarter’s calculations, including the fund closing prices used to generate your signals and the fill prices of your orders, for use three months later when the cycle repeats.

There’s an Easier Way to Sync With the Letter

A spreadsheet or the subscriber-site calculator will generate precise signals for you, but an easier, close-enough-is-good-enough way of following the plans is to copy the letter’s new stock allocations after each set of signals. For this purpose, the subscriber-site calculator includes an “Allocator” tab. The following are its instructions:

Here’s An Easy Way to Sync Your Plans With the Letter’s

1. Go to The Kelly Letter Calculator
on the subscriber site.

Click here to see a larger image.

2. Click the Allocator tab.

3. Enter the requested figures from your accounts.

4. In the “Desired Stock Fund Allocation (%)” field, enter the figure per plan. All of them are summarized in the letter. For example:

You Won’t Be Alone

In addition to Sunday letters, email support, videos, a podcast, and occasional conference calls, you’ll enjoy access to the forums. Here, Kelly Letter readers gather to discuss ideas, and ask and answer questions. You’ll be pleasantly amazed by the thoughtfulness of your fellow members and the quality of these interactions. The forums are exclusive to subscribers. Start by introducing yourself, then fire off questions in our Newcomers forum, and we’ll make you a success.


Simple and Effective, The Kelly Letter Can Help You Stop Worrying About Your Financial Future

Kent Lacey
I have followed you, and your weekly letter for some years now. … When the markets tanked after the virus hit the US early this year, I was intently watching how your system would weather that investment method’s biggest test ever. Both you and your style of investing were just perfect during a time when many others were pulling their hair out. Nicely done.

Vasco Gurch
La Mesa, California
The Kelly Letter is the only investment newsletter needed for anyone who is interested in understanding how markets work. Not only does it provide excellent economic commentary and clear investing advice, it is also full of deep philosophical insights and provides great tools to learn and apply various lessons in life. I am thankful for being part of The Kelly Letter subscriber community and hope it continues to grow in popularity.
to learn about the system. As a bonus, I’ll send you the famous first chapter of my book, The 3% Signal,
“Why Markets Baffle Us.”

Chapter One: Why Markets Baffle Us

  • The Zero-Validity Environment  4
  • Coin Toss Forecasting  15
  • Evidence of Inability  24
  • Paging Peter Perfect  27
  • What We Think versus What Is Real  33
  • Executive Summary of This Chapter  34
A Complete Investment Management System
Your membership in The Kelly Letter community brings you much more than a Sunday morning report. You’ll get all the tools you need to boost your performance, lower your costs, and reduce your financial stress, including:
The Kelly Letter every Sunday morning by email.
Like no other. Many subscribers say this is the best read of their week, astonishing in its ability to distill seven days of noise into one succinct overview of the very few items that might matter. Start your Sundays right!
A one-page Quick Start Guide
with page number references to full information in The 3% Signal. You’ll receive access to this right away so you can begin transforming your portfolio into a performance machine immediately.
The 3Sig Calculator.
A thing of beauty! You’ll use it to generate your own personal signals every quarter including exact share amounts to buy and sell based on your account balances. It emails you the results to make later quarters easy by keeping last quarter’s numbers at your fingertips. Some subscribers say this tool alone justifies their subscription price.
The subscriber-only section of this website
where likeminded investors are commenting on notes and discussing in forums. Jason joins these interactions every day. They’re a treasure trove of investing tips and wisdom.
The archive of Kelly Letter notes.
It’s a research center, searchable and smartly tagged to make gathering time-stamped material on covered subjects easy.

The subscriber podcast.
Jason reads every letter word-for-word. This feature was requested by subscribers who prefer audio. They listen on their Monday morning commute, during a workout, or while reading along at their computer.
Join The Kelly Letter Community


When you join The Kelly Letter, you’ll receive access to the step-by-step workings of the plan, all back issues and reports, and the member community in which your fellow members and Jason answer questions. There’s even a forum dedicated to newcomers, where you’ll feel right at home.

Bestselling Financial Author