We’ll examine The Motley Fool, the investing advice platform known for its blend of education, stock recommendations, and market analyses, weighing its pros and cons to discern if its bold promises translate into tangible returns.
Quick Summary:
The Motley Fool is a comprehensive financial services company offering a range of resources, including investment advisory services, educational content, and community support for investors of all skill levels. With its focus on long-term growth through well-researched stock picks and a wealth of financial knowledge, it empowers individuals to take control of their financial future and confidently navigate the investing world.
Overall Rating:
Tools & Features:
Ease of Use:
Price:
PROS
- High Long-Term Returns
- 2 Stock Picks Per Month
- Stock Screeners
CONS
- Constant upselling
- Limited Portfolio Analysis
Price:
$79/year
Features:
2 Stock Picks Per Month
Detailed Research Reports
Daily trading commentary
Trading commentary
Mobile App:
No
Current Promotions:
$79/year for new subscribers
In this comprehensive review, we’ll delve into one of the best investment newsletters, The Motley Fool, the revered investment advice service, exploring its offering’s depth and breadth—from stock picks, educational resources, and customer service to its overall effectiveness—to evaluate its worth in the crowded landscape of financial advisory platforms.
What is Motley Fool?
Over the years, The Motley Fool has evolved into a comprehensive investment advisory service, expanding its portfolio beyond traditional written content to offer many services to investors of all types. Whether you’re a seasoned investor or a newbie looking to understand the stock market basics, The Motley Fool has resources that cater to your needs.
The platform works in a straightforward manner. Subscribers gain access to various financial advice and resources, including podcasts, books, a radio show, and, most prominently, their highly sought-after stock picking service – Motley Fool Stock Advisor.
The Motley Fool is a widely recognized financial services company based in Alexandria, Virginia. It was established in 1993 by brothers David and Tom Gardner. Their goal was to provide ordinary individuals with uncommonly good financial advice, dispelling the myth that only Wall Street insiders could profit from the stock market.
One thing to remember about Stock Advisor is that David Gardner is no longer making picks. A lot of the success the advertise (AMZN, NVDA, etc.) were his picks. They used to show a competition between the two brothers, and David was clearly the winner.
How Does Motley Fool Work?
The Motley Fool provides an extensive array of investment resources, including stock-picking services like Stock Advisor and Rule Breakers, which offer detailed analyses and stock recommendations. Plus, educational investment guides like Rule Your Retirement.
This breadth of resources, focusing on long-term investing strategies, caters to novice and experienced investors, aiming to equip them with the knowledge and tools needed to make informed investment decisions.
Stock Advisor
The “Stock Advisor” is The Motley Fool’s flagship service.
Launched in 2002, it offers monthly stock picks from the company’s co-founders, Tom and David Gardner, who each manage separate teams of analysts. The service recommends stocks from established companies with proven track records and strong growth potential. Stock Advisor also advises when to sell, a feature differentiating it from many other stock-picking services.
Rule Breakers
“Rule Breakers” is another popular service offered by The Motley Fool. This service targets high-growth stocks, particularly those considered disruptive in their respective sectors.
It’s tailored towards more adventurous investors willing to embrace volatility for potentially higher returns. Just like with the Stock Advisor, you get two new stock picks each month, again backed by comprehensive reports and analyses.
Rule Your Retirement
“Rule Your Retirement” is a dedicated retirement planning service offered by Motley Fool.
It provides subscribers with a comprehensive array of resources to help plan a comfortable retirement. The service includes model portfolios, asset allocation advice, strategies for Social Security, and tips on retirement tax efficiency, among other things.
Rule your Retirement is not a stock picking service like Stock Advisor and Rule Breakers.
Who Should Use Motley Fool?
Motley Fool is Good For…
- DIY Investors: For those who prefer to manage their own portfolios, The Motley Fool provides a wealth of resources to make informed decisions.
- Lifelong Learners: The Motley Fool fosters a community of lifelong learners. Subscribers have the opportunity to continually learn and grow their financial literacy through an array of resources.
- Long-Term Investors: The service particularly benefits those focused on long-term wealth growth. Focusing on companies with sustainable competitive advantages and potential for long-term growth, The Motley Fool encourages a buy-and-hold strategy, which can lead to substantial returns over time.
Motley Fool is Not Good For…
- Passive Investors: If you’re a passive investor or prefer robo-advisors to manage your investments, the service might not align with your investment style.
- Short-Term Traders: If you are a day trader or swing trader seeking short-term gains, The Motley Fool’s advice may not align with your strategies. The platform focuses primarily on long-term investment opportunities, which may not provide the quick returns that short-term traders seek.
PROs and CONS Explained
PROS
- Comprehensive Tools: The platform offers a wide range of research and screening tools, including stock screeners, financial calendars, watchlists, and detailed financial data, which can help users to conduct thorough analysis and make informed investment decisions.
- Community and Learning Resources: With its chat rooms and extensive educational resources, Benzinga Pro fosters a community of traders and investors and provides ample learning opportunities, which can be highly beneficial for both beginners and more experienced users.
CONS
- Lack of Portfolio Building Tools: No insight on how to actually build a portfolio out of all their picks
- No recommendations on Valuations: Buy picks are only justified by generalizations about the role said the company will play in shaping their industry in the future
- Not for Passive Investors: While useful for active traders, the real-time news feedmay not be necessary for passive investors or long-term holders who don’t need to respond quickly to market events. For them, simpler, cheaper, or even free platforms might be more suitable.
- Constant upselling: After I signed up for Motley Fool, I was immediately bombarded with promotions to upgrade my account, which I found quite annoying.
Motley Fool Stock Advisor
The Stock Advisor service is The Motley Fool’s flagship product and one of the most widely recognized investment newsletters in the industry.
The service operates on a simple premise: each month, subscribers receive two new stock recommendations, one from each of the Motley Fool co-founders, David and Tom Gardner.
Every stock recommendation comes with a comprehensive report, providing a detailed analysis of the company, its financial health, competitive position, risks, and potential for future growth.
Beyond the monthly recommendations, the service also provides a list of “Best Buys Now,” which are considered top opportunities from among all the stocks they’ve previously recommended. The service doesn’t just tell you when to buy; it also advises when it might be a good time to sell, which is relatively rare among stock picking services.
Key Features
2 Stock Picks per Month
The Motley Fool’s Stock Advisor has earned a reputation for quality stock picks. It focuses on companies with strong financials, solid management teams, and compelling growth prospects. The stock picks typically span diverse sectors, allowing for natural portfolio diversification.
Motley Fool’s stock picks are generally known for focusing on long-term, buy-and-hold strategies. They are typically bullish on the growth potential of individual companies, and they often recommend stocks they believe could provide significant returns over a period of years.
Some of their stock picks have been very successful, and they are particularly well known for having recommended some high-performing tech stocks, like Amazon (2002) and Netflix (2009), very early on.
Stock Advisor subscribers get two new stock picks per month. Every stock recommendation comes with an in-depth research report explaining the proposal’s rationale.
Members also have access to a record of every recommendation the company has ever made. The information is laid out clearly in a table so members can see how past recommendations have performed.
Motley Fool offers full transparency by showing its track record of both winning and losing investments.
Access to the Latest Picks & Research
When Recommending a stock, Motley Fool provides an easy-to-digest analysis of the stock.
They provide stock details such as:
- Thesis why they are recommending the stock
- Reason for Recommendation [Buy, Sell, Hold]
- What could go wrong with the recommendation
- Alternatives
- Who the stock might be good for/not good for
Investing Tools
Motley Fool offers 3 helpful tools to make educated investing decisions.
Simulators
See the probability that a portfolio would have made money over time while holding a given number of stocks based on the historical performance of random Motley Fool stock picks. All stocks are of equal weight in their analysis.
Honestly, I think this is a bit gimmicky. It’s a simulator based on Motley Fool stock picks, it seems like a marketing tool, in my opinion.
Allocators
Every portfolio is different. Motley Fool Stock Advisor Teams offer model portfolios based on various risk tolerances and time horizons to help understand how a portfolio can be constructed.
Using the selectors, sort through the available style teams. Read the description for each Style Team and pick which one most closely aligns with your interests.
Indicators
The Potential Growth Indicator measures the cash sitting in taxable money market accounts versus the total value of U.S. stocks. It tells us how hesitant or how eager investors are to have money into the stock market.
The PGI is designed to give a sense of investor sentiment for using their available cash to invest in the markets. The higher the PGI is, the less excited investors are to invest today.
This tells us that there could be better times ahead for stocks when investors eventually return to putting savings back into the market.
The Potential Growth Indicator can be somewhat helpful, but it’s just one of many, many metrics available, and this information can be found online for free.
Historical Performance
Historically, The Motley Fool’s Stock Advisor service has shown strong performance.
As of this writing, Stock Advisor’s average stock pick has significantly outperformed the S&P 500, returning 459% vs. 124% for the S&P 500.
Note, Motley Fool may make recommendations more than once.
Since its inception, Motley Fool Stock Advisor has made 176 Stock Recommendations with 100%+ Returns.
Some picks, such as Amazon, Netflix, and Tesla, have yielded exceptionally high returns for subscribers who held onto those stocks.
Price
When you subscribe to the Stock Advisor service, you receive two new stock picks each month, complete with comprehensive reports that provide an in-depth analysis of the company, its financial health, competitive position, risks, and potential for future growth.
In addition to these monthly recommendations, subscribers also gain access to a list of “Best Buys Now” – top opportunities among previously recommended stocks.
- Retail Price: $199/yr with a 30-day Money Back Guarantee
- New Subscriber Promotion: New subscribers can get a full year for just $79
Moreover, The Motley Fool is not just about stock picks; it’s a platform designed to educate and guide you. You gain access to a wealth of investing resources, including investment guides, articles, and podcasts, helping you better understand the investing landscape and make informed decisions.
The price of the service also includes the potential peace of mind that comes with getting advice from seasoned professionals, making the world of investing less intimidating and more accessible.
Ultimately, the value of the Stock Advisor service is about more than just the stock picks – it’s about gaining knowledge and resources that can help you become a more confident and savvy investor.
While the cost of the service might be a deterrent for some, it’s important to remember that investing in reliable, high-quality advice could potentially lead to substantial returns in the long run. After all, the ultimate goal of investing is not to save on advisory fees but to grow your wealth.
Best Alternatives
If Motley Fool Stock Advisor isn’t right for you, several other subscription-based investing services may be a better fit.
1. Action Alerts Plus
Overall Rating:
Read our full Action Alerts Plus Review.
- Why it Stands Out: Action Alerts PLUS stands out for its transparency, giving subscribers full access to its portfolio and real-time trade alerts.
- Investing Tools: Actionable investment advice, detailed recommendations on what to buy, at what price, and when to sell.
- Subscribers gain from monthly members-only calls, fostering learning and direct communication with the team.
- Comprehensive market analyses and weekly roundups of market activity, changes in the portfolio, and future outlooks, keeping subscribers well-informed and prepared.
- Best For: Investors seeking real-time alerts on trades and insights into market trends.
- Pros: Strong Emphasis on Investor Education, 14 Day Free Trial, Easy-to-use Interface
- Cons: Oriented towards short-term trading, Requires Active Management
- Price: Starts at $16.67/mo
- Current Promotions: Free for 14 Days
2. MorningStar
Overall Rating:
- Why it Stands Out: Robust portfolio management tools offer investors the ability to track performance, conduct risk analysis, and create detailed reports, making it a versatile tool for effective portfolio management.
- Best For: Investors focusing on mutual funds and ETFs and those who appreciate detailed analysis.
- Pros: In-depth fund analysis, robust portfolio management tools, and comprehensive financial data.
- Cons: Might be too complex for beginners; some premium content requires a subscription.
- Price: $34.95 per month, $249 annually (41% savings)
- Current Promotions: Free for 7 days
Read our complete Morningstar Review.
3. Seeking Alpha
Overall Rating:
- Why it Stands Out Seeking Alpha’s unique crowd-sourced content model allows for an array of analysis and opinions from different investors and industry experts, providing a comprehensive view of market trends and investment options.
- Best For: Investors looking for diverse perspectives and those interested in a broad spectrum of investment types.
- Pros: Wide range of topics covered, content is crowd-sourced from a variety of investors and industry experts.
- Cons: Premium content requires a subscription; quality of analysis may vary due to crowd-sourced nature.
- Price: $239/year
- Current Promotions: $4.95 for the first month
Check out our complete Seeking Alpha Review.
Is Motley Fool Worth It?
Motley Fool provides more guidance than I’ve seen with other services, and I like to use them as the anchor in my portfolio.
So, Yes, Motley Fool is worth it.
That said, don’t expect to sign up for Motley Fool Stock Advisor and expect your portfolio to skyrocket in 6 months, that’s just not how investing works.
Motley Fool should be considered a tool in your toolkit, not an investing panacea.
I also combine my research and use their monthly picks to add to positions I may already own. What makes the service worth it to me is the live streams so that I have a pulse on what’s going on and learn about businesses I would need more time researching.
Review Methodology
Investing in the right financial products is crucial for achieving your financial goals. That’s why our review methodology is designed to give you a comprehensive understanding of various investing platforms and tools. Here’s a breakdown of what we focus on:
Tools and Features
We dig deep into the suite of tools that each platform offers. Whether it’s automated investment features, tax-optimization, or specialized charting tools, we evaluate how these features contribute to smarter investing decisions. We ask questions like:
- Does the platform offer portfolio diversification?
- How effective are the risk assessment tools?
- Are there any value-added services like educational content?
Price and Value
Price matters, especially when it comes to investing, where every penny counts. We analyze:
- Subscription fees
- Hidden Charges
- Price compared to the overall value received
We’ll let you know if the platform gives you the most bang for your buck.
Ease of Use
User experience can make or break an investment platform. We assess:
- Interface Design – Is it intuitive and easy to use?
- Mobile app availability and functionality
- Customer Support – where applicable.
Nobody wants to navigate a clunky interface when dealing with their hard-earned money.
Stock Analysis
Good investing is rooted in great research. We examine:
- The quality of stock analysis tools
- Availability of real-time data
- Depth of research reports
We check if the platform provides actionable insights to make informed decisions.
How We Do It
- Hands-On Testing: We sign up for accounts and put the platform to the test. This is how we give our nuanced opinion.
- Customer Reviews: What are other users saying? We look at reviews and customer feedback to gauge public opinion.
- Comparative Analysis: Finally, we compare each platform against competitors in terms of features, pricing, and user experience.
We take a comprehensive approach so that you don’t have to.
Why You Should Trust Us
Our reviews are unbiased and data-driven. While we may receive a commission if you purchase a product through our link, it does not impact our editorial integrity. In addition, all articles are independently reviewed by individuals who have extensive experience in the investing and personal finance space. Lastly, for further validation, we often refer to authoritative financial sources like Morningstar, The Wall Street Journal, and Kiplingers, to name a few.
