Motley Fool Review – Is Their Stock Advisor Legit?
Motley Fool is a stock-picking newsletter curated by two stock experts who have been in the business since 1993. While there’s no guarantee suggesting the stocks will make you rich, history shows following their newsletter may help you beat the market or at least earn double to triple-digit returns. This would be the case if you regularly invest, hold 25+ stocks in your portfolio, and hang onto them for at least five years.
At a Glance
What we like
- Expert-picked stocks each month
- Access to The Motley Fool community to bounce ideas off of
Low annual cost
What Needs Work
- No guarantee stock prices will remain low as millions of subscribers buy the same stock
- You have to do the work of buying the investments
To beat the market, you’ll need an entire portfolio of ‘Motley Fool’ investments
- Investors who don’t have time/patience for research
- Anyone looking to invest in up-and-coming businesses
- Investors who want someone to tell them what to invest in rather than deciding for themselves
Picking stocks is about as fun as going to the dentist, right? Unless you’re a seasoned expert (and even they have good and bad days), it’s hard to know if you’re picking a real winner or loser, and most people don’t even come close to beating the market.
Wouldn’t it be great if you had someone pick stocks for you inexpensively and could help you beat the market? Human advisors are expensive — unaffordable for the average investor, and they rarely beat the market. But with stock picking services like Motley Fool, you can have your cake and eat it too.
The Motley Fool has been around since 1993, making it safe to say they’ve been around the block and then some, but is the service and its fees worth it? Find out in our review below.
What Is The Motley Fool Stock Advisor?
The Motley Fool Stock Advisor is a subscription-based service that picks stocks for its followers. It claims to beat the market if you follow its strategy of buying at least 25 stocks and holding onto them for at least five years.
This is no small claim. What do you get?
The standard Stock Advisors subscription gives readers two new stock picks a month. It also includes an analysis of why they picked the stocks they did, allowing you to make your own decisions.
They don’t do the investing for you or even advise individuals. Its service provides the ‘top picks’ for the month — you can do with the information as you wish. If you decide to invest in the stocks they recommend, you’ll need a robo-advisor account or to work with a broker to make the investments.
What makes The Motley Fool Stock Advisor worth it? What claims do they have back them up?
First, two investment experts founded The Motley Fool. They aren’t your fly-by-night people claiming to be "experts." Before they founded The Motley Fool, Tom and David Gardner were already well-established experts, providing their investment ideas (which are different than the norm) online and in publications.
Their unique approach to investing and the humor they used when sharing the information created quite the following, making founding The Motley Fool a natural transition for them. It wasn’t until 1997 they launched an official website, and the rest is history.
Since their humble beginnings, the Gardner brothers have expanded their offerings to include money management and investing services. While they were never a broker or conducted trades, their Real Money Portfolio services allowed subscribers to track the firm’s portfolios, watching real-life trades.
This experience and transparency are what led to The Motley Fool’s popularity today.
How Does The Motley Fool Stock Advisor Work?
Once you sign up (and pay for) the service, you’ll receive two new stock picks from The Motley Fool’s founders — Tom and David Gardner. Tom and David conduct an immense amount of research before recommending specific stocks, doing the legwork for you.
In addition to the two monthly stock picks, The Motley Fool also provides an ongoing list of at least ten recommended stocks. It includes a list of starter stocks they feel every investor should carry in their portfolio, access to various educational materials, and a like-minded community to talk to about investing.
Motley Fool also provides access to historical picks to show its transparency so subscribers can see how good (or bad) the picks were at the time.
What Is The Motley Fool’s Investment Style?
Motley Fool’s stock picks are different from what you’ll find at any other investment advisor. Tom and David, although brothers, have slightly different approaches to investing, which both beat the market.
A majority of their picks are blue-chip technology stocks, but only after an in-depth analysis of the company, their management style, and other factors making Tom and David think the company has potential for incredible growth.
Their investment style is a long-term nature for buy-and-hold investors. This isn’t a get-rich-quick scheme but rather a long-term investment for long-term financial success. Both brothers provide detailed explanations as to why they picked the stocks they picked, including the price you should consider buying and selling the stock.
Motley Fool subscribers receive two stock picks per month. Not every stock will be a "make you rich" stock. Their goal is to help subscribers create a well-diversified portfolio with stocks that will "hit it out the park." Some picks will hopefully beat the market, and others will probably perform mediocrely. You may even find there are a few which fall flat on their face, which is normal. After all, Tom and David Garnder are human, too.
As with any investment strategy, it’s wise to have a "bailout" plan just in case. While it’s not the intention of the service, any plan can go awry, and you should always have a way out.
What’s the Cost of The Motley Fool Stock Advisor?
Like any good service, Motley Fool isn’t free, but it’s not unreasonable either. The first year is $99 for new subscribers, and then it’s $199 after the first year for the Stock Advisors newsletter. Your subscription automatically renews, so pay attention to your renewal date if you plan to cancel.
All new subscribers also get a 30-day, money-back guarantee. If you aren’t happy with the service or decide it’s not for you, cancel before the 30th day, and you’ll get your money back.
Motley Fool also provides a few other newsletters at higher prices for more targeted investments, including:
Rule Your Retirement - $199/year
Get advice on creating the optimal portfolio for retirement, including three model portfolios you can mimic. You’ll also receive Social Security tips and advice and get help on some of the most challenging retirement topics, including estate planning.
Rule Breakers - $299/year
Invest in high-growth businesses predicted by The Motley Fool to be big winners in the future. You’ll get two stock picks from some of the hottest stocks available. Five other stocks are chosen out of a list of 200 top stocks and a specific portfolio for new investors.
Stock Advisor and Rule Breaker Combo $498/year
If you want to make your mark as a successful investor, try the SA and RB combo. You’ll get a total of four monthly stock picks and 15 ‘best buys now’ picks to create the most disruptive (and profitable) portfolio.
Motley Fool Pros and Cons
- Monthly stock tips meaning you don’t have to do any research (unless you want to)
- Detailed reports on why they picked the stocks, the company’s profile, and even around-the-clock monitoring
- Instant access to the latest news affecting your investments
- Access to historical picks
- Access to a decent stock screener to filter the information you receive
- No guarantee the stock picks will perform
- You still have to do the work of investing in the stocks once you decide
- Stock prices may increase quickly once Motley Fool releases their newsletter because of the higher demand
Who Should Use Motley Fool?
Just like investing isn’t a one-size-fits-all approach, who should or shouldn’t use Motley Fool varies, but it generally appeals to the following:
- Investors who don’t have the time or patience for extensive research
- Investors branching out into stock investments versus fund investments (ETFs, mutual funds)
- Anyone who wants someone to tell them what to invest in and has the research to prove it
- Anyone looking for a community to talk to about investing
Who Shouldn’t Use Motley Fool?
- Anyone who likes to research before choosing stocks
- Investors who need more control over what they invest in rather than relying on a third-party
- Investors who won’t have money available every month (around the same amount) to buy both recommended stocks
The Motley Fool Stock Advisor Features
The main feature of The Motley Fool Stock Advisor is the stock picks. All subscribers receive two stock picks per month. You’ll receive the pick, the reasons they chose it, why you should consider it, and 24/7 monitoring of its performance.
The news affects your investments tremendously. The Motley Fool includes the latest news on the main screen, so you’re always up-to-date on what’s next.
You can set up alerts for your favorite stocks. When something changes drastically (prices rise or fall) or something happens in the industry, undoubtedly affecting the stock, The Motley Fool will alert you immediately.
List of Starter Stocks
If you’re just building your first portfolio, The Motley Fool provides a list of 10 stocks you must have in your portfolio. The list is ever-changing, and you won’t have the same starter portfolio as someone who started a few months or years ago.
Access to Historical Stock Picks
If you wonder how The Motley Fool stock picks did before, you’ll have access to all stock picks back to 2016. The historical stock picks aren’t meant for you to invest in them but rather to see how Tom and David do with their selections.
Access to the Investment Community
All Motley Fool subscribers have access to the community boards where you can talk to one another, swap ideas, and learn more about investing. It’s an excellent place for like-minded people to come together and discuss investing.
You can easily filter your search results with robust stock screeners. They are similar to what you’d find on a robo-advisor. You can enter information for a specific stock or put in other filters to narrow your results down.
Great Customer Service
If you need help with the newsletter or other products offered by Motley Fool, you can get live customer support. You can’t get help with investment questions. However, they are just there to help you navigate the system and answer your technical questions.
Is Motley Fool Safe And Legit?
Since you aren’t investing your money directly with Motley Fool, they are safe and legit. However, you should always vet your investment options before adding them to your portfolio.
They take security seriously and encrypt all payment information (credit card for the subscription). While the site itself may feel a bit spammy with many advertisements and upsells, it’s legit and safe.
How Accurate Are Motley Fool Picks?
Motley Fool claims it has beaten the market for the last 18 years. Their average stock has a 580% return. Still, they are transparent in all of their advertisements about fluctuating investments. It’s their philosophy to comb through every corner of the market to find businesses worthy of investing for powerful long-term growth. They also buy and hold them for at least five years to help their recommended portfolios perform.
Motley Fool Alternatives
Morning Star offers a similar service to Motley Fool, with one big exception — they don’t offer new stock picks monthly. Instead, you receive a long list of stocks, ETFs, and mutual funds with robust research for you to use to decide which investments are suitable for you. It’s less of an aggressive approach and more about providing as much information as possible.
Motley Fool and Zacks provide similar services but to different audiences. Whereas Motley Fool is all about up-and-coming businesses, Zacks look at the entire economy. Zacks breaks its picks down into various categories, including growth stocks, value, and momentum categories.
The Final Word: Is Motley Fool Worth It?
If you’re looking to beat the market or at least give it the old college try, The Motley Fool can be worth it. At only $99 for the first year, it’s worth giving it a shot to see how your investments perform.
If you’d rather focus on ETFs or mutual funds, or you’re brand new to investing, it may not be worth it right now, but when you’re ready to include stocks in your portfolio, it never hurts to have another opinion.
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About Millennial Money Man
Bobby Hoyt is a former band director who paid off $40,000 of student loan debt in 18 months on his teaching salary and then left his job to run Millennial Money Man full-time. He helps other Millennials earn more through side hustles, save more through budgeting tools and apps, and pay off debt. He is a personal finance expert who has been seen on Forbes, Reuters, MarketWatch, CNBC, International Business Times, Business Insider, US News, Yahoo Finance, and many other personal finance and entrepreneurship media outlets.