Motley Fool Review: Is Stock Advisor Worth it?

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Investing is important to building wealth and saving for retirement. In addition to investing in index funds and target-date retirement funds, holding individual stocks can boost your investment performance.

However, finding high-quality stocks to invest in can be time-consuming. Motley Fool can help you invest in individual stocks that you can produce long-term gains with two new stock picks each month.

This Motley Fool review can help you decide if this stock research platform can help you become a better investor.

4.3
Overall Rating

Summary

Motley Fool is a well-respected source of stock investing ideas. Stock Advisor is well known for offering two monthly picks to reduce your research time to invest in quality stocks as well as a depth of investment insights. 

  • Cost

    4

  • Ease of use

    5

  • Layout

    4

  • Extra features

    4

Pros

  • Two monthly stock picks
  • In-depth research
  • Full access to all active recommendations

Cons

  • Layout can be overwhelming
  • Not for short-term stock trades
  • Annual fee can be high for some investors

What is Motley Fool?

Brothers Tom and David Gardner launched Motley Fool in 1993 by researching stocks and giving investment ideas to ordinary investors.

At its core, Motley Fool operates under the belief that individual investors can “beat the market” by investing in single stocks.

To help investors achieve this goal, Motley Fool Stock Advisor is a premium newsletter that recommends two new stocks each month. The Fool analysts believe these stock picks can outperform the overall market for the next three to five years.

When you’re ready to buy a stock recommendation, you can buy shares through the best online stock brokerages for trading stocks.

What is Motley Fool Stock Advisor?

Most investors use Motley Fool for its Stock Advisor premium newsletter that launched in February of 2002. This service costs $99 for new members the first year and provides two new stock picks each month from growth industries.

You won’t see ETF or mutual fund recommendations in Stock Advisor. However, you will see many investing ideas for stocks in these industries:

  • Tech
  • Banking
  • Online shopping
  • Alternative energy
  • Consumer staples

According to Motley Fool, the total performance of the Stock Advisor portfolio is 501% since launch. The S&P 500 has only returned 102% over the same period (as of October 27, 2020).

As you get two monthly recommendations, one pick follows David Gardner’s investment style and the other pick models Tom’s strategy. David tends to be more aggressive as his all-time performance is at 754% while Tom is at 248%.

This track record is impressive is why Motley Fool is popular as many active investors lose money long-term.

How Does Motley Fool Stock Advisor Work?

Stock Advisor recommends two new stock picks every month.

For each stock pick, you will see a detailed summary of why you might invest in the stock along with its potential risks. As Motley Fool doesn’t offer personal investment advice, you will need to decide if the stock pick fits your investment strategy.

If so, perform your due diligence to understand the stock and its potential risks. Also, make sure you keep your portfolio balanced and diversified.

Investing in two new stock picks each month can be difficult if you can only invest small amounts of money. Thankfully, many investing apps now offer fractional investing and commission-free trades.

Motley Fool wants investors to initially stirve to hold 15 Motley Fool recommendations. Ultimately, Stock Advisor members should own at least 30 stocks.

Investment Strategy

What makes Motley Fool different than most investing newsletters is its “buy and hold” mindset. Other newsletters advise using trailing stops to reduce downside risk. Stock Advisor will hold stocks through sharp corrections if the stock remains a good long-term investment.

Most of the Stock Advisor recommendations are for tech-related stocks. After all, the tech sector has the best long-term growth potential at the moment. But you will also see medical and consumer goods stocks to get exposure to multiple market sectors.

You will likely be familiar with many of the names that Stock Advisor recommends. But you will also discover names that might become the next Amazon, Google or Apple stock.

Some of the most successful picks include Shopify, Amazon, Netflix and Zoom.

These stocks are growing and tend to be leaders in their industry. Some earn dividends but are more volatile than a “dividend aristocrat.”

Pricing

Motley Fool Stock Advisor costs $99 for the first year, including a 30-day risk-free trial period.

After the first year, your subscription renews at $199. This annual cost is competitive with other investing newsletters. However, most Motley Fool alternatives only make one monthly pick. Plus, Stock Advisor offers other features that similar newsletters don’t.

Features

Stock Advisor gives you several ways to find investing ideas.

Starter Stocks

To help you start investing, Stock Advisor provides a list of ten “Starter Stocks.” These stocks come from a variety of industries. Motley Fool believes these stocks are a good fit for most new investors ready to buy their first individual stock.

In fact, Motley Fool recommends buying some Starter Stocks plus the monthly picks.

Two Monthly Stock Picks

The new monthly stock picks arrive on the first and third Thursday of the month.

Each stock pick comes with a summary that you can read in several minutes and is easy to understand.

The research report includes these details:

  • Brief summary of what the company does
  • Key financial stats
  • Why Motley Fool likes the stock
  • Best reasons to buy the stock now
  • Potential business risks

Reading the report gives you a good idea of why you might invest in the monthly stock pick. You can also read the latest earnings call transcripts and other research articles for the Stock Advisor recommendations.

Best Buys Now

On the off-weeks, Stock Advisor updates its “Best Buys Now” list of the five active recommendations that can be worth buying shares of first.

You can expect the newest picks to make the list for most weeks. But you might also see recommendations that Stock Advisor first suggested over a year ago.

motley fool best stocks

CAPS Community

Premium members can interact with other Motley Fool members in the CAPS community. This online discussion board is similar to Bogleheads.

Instead of focusing on index funds, CAPS lets you read and share opinions about specific stock tickers or copy the investment portfolio of other members.

You can also see which stocks are most popular with Fool members. These stocks can differ from what’s in the Stock Advisor portfolio.

Investment News

Motley Fool also publishes many free investment news articles each day. Some articles focus on a specific stock and others discuss an investing theme. If an article mentions a stock that you’re watching, you receive a notification when the Fool mentions the ticker.

These articles can be good follow-up information after reading the initial buy report. You can also discover new investment ideas.

Investing in individual stocks requires more portfolio monitoring than passive investing. Stock Advisor can send you text and email investing alerts for stocks you’re watching.

Investment Guides

There is a lot to learn a lot about investing and retirement planning as a new investor. Motley Fool has several resources providing general investing information. You can read guides on how stocks work, asset allocation and retirement planning.

Stock Advisor also sends regular emails highlighting sections of the Motley Fool investment strategy.

Podcasts

Motley Fool offers free and members-only investing podcasts. In addition to reading the stock pick summary, Stock Advisors can listen to an in-depth podcast about the company.

You can also enjoy these free Motley Fool podcasts:

  • Rule Breaker Investing. Fool co-founder David Gardner offers his view of the most disruptive and innovative publicly traded companies.
  • Motley Fool Answers. This podcast is focused on personal finance with tips on saving, spending and planning.
  • Motley Fool Money. This podcast is taken straight from the Motley Fool syndicated radio show, which airs in markets across the country each week. It features several analysts discussing major investment news and stocks.
  • Market Foolery. Listen to this short daily podcast if you want to hear about stocks in the news.
  • Industry Focus. Each episode of this daily podcast breaks down a specific industry and the key stocks worth highlighting.

Other Motley Fool Newsletters

Motley Fool offers several newsletters in addition to the entry-level Stock Advisor. These other newsletters cost more than Stock Advisor. You might consider them if you’re an aggressive investor or have plenty of free cash.

motley fool premium

Rule Breakers

For $299 annually, you get one monthly recommendation for top growth stocks. The stocks in Rule Breakers are smaller and more volatile than the Stock Advisor picks.

It’s not uncommon for Rule Breakers to invest in a stock first. After the initial rapid growth and volatility phase passes, Stock Advisor will recommend the stock.

Rule Your Retirement

This $149 annual service includes recommendations for mutual funds and exchange-traded funds. There are also tips and strategies for maximizing Social Security benefits.

Options

For $999 a year, you can get access to an “Options University” to learn options trading strategies, from basic to advanced. There are also options trade recommendations and a weekly news commentary.

Who Should Consider Motley Fool?

New and experienced investors ready to buy new stocks can benefit from Motley Fool Stock Advisor. You will benefit the most from Stock Advisor if you own few or no stocks.

The Stock Advisor Starter Stocks list is a good starting point to build your stock portfolio. From there, you can new monthly picks until your portfolio has at least 30 stocks. Motley Fool recommends the 30-stock benchmark but you can decide the best number for you.

You should avoid Motley Fool if you’re a short-term trader or focus on earning dividends. Stock Advisor is best when you can hold single stocks for at least three years.

Is Motley Fool a Scam?

Motley Fool is a legit service that has been helping individual investors since 1993. During that time, we have seen several stock market recessions and Motley Fool is still around.

You can see the performance for each Stock Advisor pick since its 2002 inception. This level of transparency lets you see the performance of each monthly pick. Stock Advisor also compares the pick to the performance of the S&P 500.

Also, the share price for new Motley Fool recommendations tend to increase temporarily. This price effect demonstrates the number of investors that trust Motley Fool. As the Fool takes a multi-year investment outlook, these share price jumps shouldn’t deter you.

Motley Fool has a 2.6 out of 5 Trustpilot score. One common complaint is the constant marketing for pricier premium newsletters. This is a common practice for investing sites.

Positives and Negatives

Pros

  • Two monthly stock picks
  • Outperforms the S&P 500 long-term
  • Access to all active stock recommendations
  • Exclusive investment research and podcasts

Cons

  • Doesn’t cover ETFs
  • Requires annual membership
  • Shares prices might jump temporarily for new stock picks

The Bottom Line

Motley Fool is a well-respected source of stock investing ideas. The Stock Advisor newsletter’s two monthly picks reduce your research time to invest in quality stocks.

Author

Comments

  1. I’m a fan of Motley Fool for their informational articles, no doubt. The only piece that irks me is their pitch at the end of posts that calls out things like “find the 7 stocks to invest in today…”. Sometimes I fear that lures new or eager investors away from passive index funds and into the risk game of stock picking.

  2. It is hard to sell the idea that one can become good at investing by reading articles on a website. Considering that Motley is charging $199 for the service.

    The fact that investing has professionals that have years of education and experience behind them means that this business model is tricky. How can I come through and suddenly become as good as seasoned investors by reading articles?

    If they provided some form of copy trading/investing platform like what we see with eToro and the likes then their offerings would be more convincing.

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