The 20% Letter Review: Is Tim Melvin’s Service Worth It?

I first discovered The 20% Letter while looking into a stock teaser presentation by Tim Melvin, which centered around a so-called “perfect” dividend stock. And after joining the service, I decided to put this review together to share my thoughts on it.

What’s it about?

In short, the main goal of Melvin’s newsletter is to help subscribers generate a 20% annual return, and he primarily recommends dividend-paying bank stocks and REITs.

Is it worth it?

As with any service, there’s no guarantee it’ll help you make money, and whether or not it’s worth it will depend on what you’re looking for.

But if you’re looking for potentially undervalued bank stock and REIT ideas and ongoing market commentary from Tim Melvin, you may find it worthwhile, especially for $79.

What are the main pros and cons?

The biggest standout for me was the clarity of Tim Melvin’s insight. He explains things in a way that anyone can understand and makes his thesis very clear in each newsletter.

He also focuses on the most relevant topics related to the economy and markets (for example, rising rates and inflation) and explains how they relate to what he’s recommending. He also shares relevant charts to illustrate his thesis.

As for the drawbacks… the main one is probably that the service is only new, so it doesn’t have an established track record yet. And out of the handful of stocks that have been recommended so far, most of them are down as of writing.

Another thing some may not like is that the member’s area lacks some of the basic features you might expect for a service like this. For example, from what I’ve seen, the model portfolio is not updated in real-time, it’s only manually updated occasionally.

Neither of those are deal breakers for me, though.

I actually prefer companies that spend less on marketing and focus more on the research itself. And as I’ll soon explain, this is a long-term, dividend/value stock-focused service, so it’s way too early to properly evaluate how Melvin’s picks have performed.

Read on for the full review.

My Full Review of The 20% Letter

Tim Melvin’s 20% Letter service, which is published by Investors Alley, launched in September 2022. And according to the company website, the main goal of the service is to give subscribers recommendations that “deliver 20% annualize total returns.”

“The premise of The 20% Letter is simple: provide you with stocks that through a combination of dividend payouts and share price growth to deliver 20% annualize total returns.”


Of course, no service can guarantee you results.

But that’s the goal. And Melvin seeks to achieve this primarily by recommending dividend-paying bank and REIT (Real Estate Investment Trust) stocks.

These are the bedrocks of The 20% Letter service.

Why does he focus on these?

Based on what Melvin said in the first newsletter, he focuses on banks and REITs because these are what he found work best after years of testing different strategies.

Melvin breaks down his strategy in detail in the first newsletter, so that’s the best way to learn the ins and outs of it. But in short, he looks for smaller, lesser-known banks and says his formula for picking them is “heavily weighted on valuation measures and dividends.”

And as for his REIT picks, Melvin says he mostly focuses on choosing companies that are “growing cash flows and asset values.”

What are REITs?

REITs (real estate investment trusts) are companies that generate income by buying and renting out different types of real estate.

And they are required to pay out at least 90% of their taxable income to shareholders, making them popular among investors seeking to generate income.

So, to sum it up… the 20% Letter focuses on banks and REITs that Melvin believes are undervalued and that pay decent dividends. And according to Melvin, he’s designed the service specifically for the rising interest rate environment we find ourselves in.

Ahead, I’ll give you an overview of Tim Melvin’s newsletters, discuss the model portfolio, and highlight other aspects of the service to help you make a more informed choice.

Monthly Newsletter Issues

As of writing, only two newsletters have been published for The 20% Letter, as it’s a brand-new service. But that was enough to get a pretty good idea of Melvin’s style.

The first newsletter was basically an introduction to why he focuses on banks and REITs, which boils down to a combination of what he’s learned from other successful investors and what he’s found by analyzing different approaches.

It also discussed the main goal of the service (generating 20% annualized returns) and went through each of the five companies he recommended upon launching the service.

The second newsletter (October 2022) was a lot more relevant to the current market environment. For example, Melvin discussed inflation, rising interest rates, and his take on what the Fed might do next.

Preview of The 20% Letter monthly newsletter.

To me, his take was informative and very down-to-earth.

No one’s right about everything, but I think most people who join will appreciate his style of writing because it’s easy to digest and comes across as both intelligent and honest.

In any case, toward the end of the newsletter, Melvin provides updates on the portfolio and (usually) discusses any new recommendations he has.

I say “usually” because there were no new picks mentioned in the October issue because, from what I can gather, Melvin was waiting for a more favorable entry point.

And there are currently six picks in the model portfolio (one more than the service launched with). So he must have added another pick to the portfolio after the October newsletter was published, which I’m guessing will be discussed in the next issue and/or weekly videos.

My point being… there’s not always a new pick every month, but you are always kept up to date on what he’s recommending (somewhere) in the member’s area.

Model Portfolio (Stock Picks)

As mentioned, The 20% Letter focuses on REITs and bank stocks, and the model portfolio is essentially a list of the companies Melvin is recommending.

It shows you the ticker, date it was recommended, buy price, max price Melvin recommends buying, and other related info.

The 20% Letter model portfolio preview.

The reason the screenshot above is blurred is that I can’t share his picks, given it’s a paid service. And the prices of the stocks in the above portfolio haven’t been updated for almost two weeks, so it’s pointless sharing that info as it’s outdated.

Nevertheless, what I can say is that out of the six recommendations currently in the model portfolio, four of them are down, one is almost breaking even, and one is up.

So, on the one hand, the portfolio is down overall (percentage-wise) as of writing (October 21, 2022). But on the other hand, this is a long-term focused service, these are all very recent picks, and the average percent drawdown, by my calculations, isn’t much overall.

Not to mention, all of the companies he’s recommended pay dividends.

And all of his recommendations are currently still active, meaning how they’ve performed can and will change from day to day.

So, in my opinion, it’s way too early to judge the success of these picks.

Weekly “Mailbag Videos”

The “mailbag” videos are weekly videos where Tim Melvin shares his latest market commentary and shares any updates he’s made to the portfolio.

Video featuring Tim Melvin in the member's area.

As of writing, there’s only one video available, which was less than 20 minutes long, but it was pretty informative, and I think this is a nice way to stay updated in between the monthly newsletters. It’s also something that makes the service unique compared to others.

Special Reports

The “special reports” tab is where you can access the latest research reports Tim Melvin has released, which detail different investments he’s recommended.

Right now, there’s one called “This Tiny Bank is the Perfect Dividend Stock” and one called “The #1 Bank About to Be Acquired.”

Each of these breaks down what companies Melvin is recommending, why he likes them, and exactly what he’s recommending.

He does a similar thing in the newsletters, but these reports are dedicated to discussing his picks, and they are also used as “hooks” to promote the service.

So it wouldn’t surprise me if some people joined The 20% Letter just to access these reports, as Melvin teased both of them in a stock teaser I wrote about recently.

Cost and Refund Policy

When I first learned about the 20% Letter, it was being advertised for $49. But that was a few weeks ago, and I couldn’t join for that price, so I ended up paying $79 to join.

There’s also an auto-renew system in place whereby the service automatically renews for $99 after the first 12 months. So if you join but don’t want to continue on for a second year, this is something you’ll need to cancel before it renews.

What about getting a refund?

According to the Investors Alley website, it is possible to get a refund at any time during the first 365 days of becoming a 20% Letter subscriber.

That’s pretty solid and more than most companies offer.

I don’t know if that’s the case for all of the services the company offers, though. Investors Alley sells numerous services, some of which are pitched to you as a subscriber. But that is what the company says about the refund policy for this newsletter.

Is Tim Melvin the Real Deal?

Tim Melvin’s 20% Letter service is brand new, but he has contributed to numerous well-known finance sites over the years and seems to have a good reputation.

For example, he has contributed to Money Morning, Benzinga, and Marketfy (among others). He also has a YouTube channel where he shares some of his insights for free.

What’s his backstory?

According to his Money Morning profile, Melvin started out as a door-to-door vacuum salesman and eventually “became a financial advisor to millionaires.”

It’s unclear who he worked for, but according to, Melvin is a former hedge fund manager and has served as a broker, advisor, and portfolio manager.

All told, Tim Melvin has around 30 years of experience in the world of finance, and from what I can tell, he is a value investor through and through.

What about the company he works with, Investors Alley?

Investors Alley, which is based in New York, has been around for several years and seems to be one of the more reputable financial publishers in the space.

The company has a very good BBB rating, mostly positive reviews, and from what I’ve seen, their services (like the Dividend Hunter, for example) are rated pretty well too.

That’s pretty rare in the financial newsletter space.

There are a lot of scams and overhyped newsletters out there, so it pays to be careful who you buy from. And Investors Alley seems to be one of the better companies.

Anyway, aside from The 20% Letter, Tim Melvin runs another Investors Alley service called Underground Income, which was an upsell I encountered when joining. This costs $595 to join and focuses on “arbitrage opportunities in the closed-end fund space.”

Aside from that, Melvin runs an investment research firm called Thunderclap Research, and one of the main services this company sells is called Takeover Targets. Although I’m not sure if that service is still running, as it wouldn’t let me join when I tried signing up.

In any case, no stock picker is right all of the time, and there’s never any guarantee their recommendations will make you money. But everything I’ve seen suggests that Tim Melvin is a legitimate expert and one that shares useful insights with subscribers.

Bottom Line: Is The 20% Letter Worth It?

If you’ve read this far, you should have a reasonably good idea of what The 20% Letter service is about and whether or not it’s something that interests you.

But is it really worth it?

On the one hand, yes, it could be worth it if you’re interested in learning from Tim Melvin and want to find out about the dividend-paying bank stocks and REITs he recommends.

I’m not an “expert” stock picker or market analyst by any stretch, but I personally did find the macro insight he shared (i.e., Fed policy, inflation, interest rates) worthwhile and found his analysis of the companies he likes informative.

I also like his no-fluff, honest, down-to-earth approach.

On the other hand, The 20% Letter is probably not ideal for those searching for growth stocks or “10-bagger” opportunities. Melvin does seek out stocks he thinks are undervalued, but most would probably consider them “boring” from a growth perspective.

That’s not necessarily a bad thing, it just depends on what you’re looking for.

As for how his strategy will work out, only time will tell.

The service is virtually brand new and so far hasn’t established enough of a track record to have declared victory on its 20% annualized return target.

But if you’re looking for a legitimate, reasonably-priced service that gives you Tim Melvin’s latest market insights and bank/REIT investment ideas, this might be worth a look.

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