Motley Fool is a company offering a wide range of online information and services dedicated to helping the individual investor with their investment strategy.
Based in Alexandria, Virginia, the privately-owned firm has about 300 employees and was founded in 1993 by two brothers, Tom and Dave Gardner.
It has a robust website (Fool.com) with free articles about investing, stocks and retirement planning. An active community of members share information and opinions about their investment choices.
The site also includes a competition-based crowdsourcing feature and a suite of paid premium services offering investment advice on stock picking and portfolio construction.
At its core, Motley Fool operates under the belief that individual investors can “beat the market” by building their own portfolios using smart stock selection.
It also believes that a long-term investing approach can allow the average person to build wealth.
The Fool is not an advocate of passively managed index funds, though it doesn’t outwardly criticize them, either.
Motley Fool’s focus is on stock-picking advice, but it also has an asset management arm offering actively managed mutual funds and exchange-traded funds.
In addition, it has a wealth management arm and oversees a fund for investing in early-stage private companies through Motley Fool Ventures.
Note that Motley Fool is not a site for buying and selling stocks or funds. When you’re ready to do that, you may instead want to look at the best online stock brokerages for trading stocks, and at our list of the best investing apps.
Lets get’s started with this in depth Motley Fool review.
Motley Fool Review
For $149 a year, you can receive two new stock recommendations each month, plus a selection of “best buy” stocks and foundational stocks for new investors.
Table of Contents
- Free Content on Motley Fool
- Premium Services
- CAPS Community
- Discussion Boards
- Sister Companies
- International Sites
- Motley Fool on Social Media
- Motley Fool’s Marketing
- The Bottom Line
Free Content on Motley Fool
Motley Fool offers a series of subscription products that we’ll discuss later, but it’s entirely possible to learn a lot about investing and retirement planning simply from the free content on the website.
Anyone looking for some general information on how to invest, how to get started with retirement planning and how to build a basic retirement portfolio will find plenty to draw from.
There are a number of great investing information websites to consult if you’re trying to educate yourself on the basics of investing. Motley Fool makes a good complement to other sources that encourage the use of index funds.
Just be aware that many articles will have links to encourage you to read more, and then ask that you sign up for a paid subscription. For example, at the end of many of the articles on Netflix, there’s a link to an article called “10 Stocks We Like Better Than Netflix.”
That link takes you to a page where it asks for an email address. Once entered, you’ll be sent to a signup page for Motley Fool Stock Advisor, which normally costs $199.
Let’s examine how the free content is broken down on the Motley Fool website.
Motley Fool offers up-to-date information on the stock market and on specific stocks making news on any given day. There are thousands of articles on individual companies, written by a combination of staff and freelance writers. (Motley Fool claims it has published more than 4,600 articles on Netflix alone!)
How to Invest
Perhaps the most useful part of Motley Fool for beginning investors is the robust section with detailed information on getting started. To the company’s credit, it knows that no one is going to pay for one of its subscription services if they don’t know the basics of stock investing first. A new investor can easily read through this entire section of the Motley Fool website and feel a lot more confident.
How-to sections include How to Invest in Stocks, Start Investing With $100 Per Month, and a step-by-step guide to opening a brokerage account. New investors may find the “13 Steps to Investing Foolishly” series to be particularly helpful.
Retirement planning is one of the most important areas for investors to focus on, especially if you’re just getting started with an investing strategy. You’ll want to understand your 401k, Roth IRA and traditional IRA options.
Motley Fool’s section on retirement is detailed and robust, in keeping with the company’s broad emphasis on investing for the long-term. It begins with basic information on 401k and IRAs. It also includes information on Social Security.
Plus there’s a section titled 13 Steps to Retire Foolishly. There are also specific guides on retirement planning for people in their 20s, 30s, 40s, and 50s.
In addition, there a numerous articles on various retirement topics, such as Should I Get a Reverse Mortgage?, Should I Get a Long-Term Care Policy?, and 6 Important Retirement Dates You Should Know.
Motley Fool’s content is not limited to written articles. In recent years, it has launched a series of podcasts on various investing and personal finance topics. They range in length from 15 minutes to an hour, and are available on the Motley Fool website and through Apple iTunes and Stitcher.
Sections of these podcasts (with video) are available on the Motley Fool YouTube channel, too. Transcripts are also available.
- Rule Breaker Investing. Fool co-founder David Gardner offers his view of the most disruptive and innovative publicly traded companies. Recent topics include 5 Stocks Shrouded In Mystery and Get Your Kids Started in Investing!
- Motley Fool Answers. This podcast is focused on personal finance with tips on saving, spending and planning. Recent topics include Marshalling All Your Resources for Retirement and Were the Gurus Right About 2018?
- 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. Recent topics include: 20 Stocks in 2019 and Taking Stock in Cannabis.
- Market Foolery. Listen to this short daily podcast if you want to hear about stocks in the news. Recent topics include Investor’s Guide to Oscar Nominations and IBM, Comcast and eBay’s Quandary.
- Industry Focus. Each episode of this daily podcast breaks down a specific industry and the key stocks worth highlighting. Recent topics include The Future of Batteries and Three Low Risk Ways to Invest in Biotech.
In July 2018, Motley Fool launched a new portal devoted entirely to personal finance topics outside of investing.
The Ascent features an extensive library of reviews of financial products, including credit cards, savings accounts, online brokerages and insurance products. The site offers detailed information on interest rates for banks, personal and auto loans, and mortgages.
I was particularly struck by the length and breadth of many of the personal finance pieces, which go beyond simple reviews to financial advice. For example, an article on the best personal loan products of 2019 offers an extensive section outlining the reasons why you may or may not need a loan in the first place.
The Ascent operates as a separate editorial entity from the Motley Fool’s main website and its content is produced and edited by a different team of analysts.
This is a good addition to Motley Fool’s offerings, because it is based on the underlying belief that you can’t invest money unless you save it first.
In the early years, Motley Fool made its money from online advertising. But over the years it shifted it to a subscription model, offering premium advice, research reports and other services for an annual fee.
These services range from $199 for an annual subscription (though it’s possible to find promo rates for less) to $999 on the high end. Anyone who has ever received an email from Motley Fool has undoubtedly received a pitch for one of these premium services. Let’s examine the Motley Fool paid offerings.
For $149 a year, you can receive two new stock recommendations each month, plus a selection of “best buy” stocks and foundational stocks for new investors. According to Motley Fool, the stock picks from the founders have beaten the market.
Tom Gardner’s picks have generated a 149% return since the inception of the service, while David Gardner’s have generated a 527% return, according to Motley Fool. For comparison, the S&P 500 saw a 77 percent return during the same period.
For $299 annually, you get recommendations for top growth stocks. Motley Fool claims that it was among the first to recommend some high-profile stocks, including Tesla and Under Armour.
Rule Your Retirement
This $149 annual service includes recommendations for mutual funds and exchange-traded funds. There are also tips and strategies for getting the maximum Social Security benefit you’re allowed, and in-depth articles on subjects and news impacting retirees or those who are approaching retirement age.
They do offer a 30 day 100% membership refund period. This is great so you can try it out and see if it is worth the money for you.
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.
Motley Fool also has six other premium services that are currently closed to new members, ranging in price from $1,499 to $8,499 per year.
Whether or not these premium services are worth it is largely up to the investor. While Motley Fool claims that its stock picks have greatly outpaced the S&P 500 over the years, your success will be based on your own timing of when you buy the stocks and when you plan to sell them.
In addition, it’s notable that while the average of all the recommendations together may have beaten the market, there are individual stocks that may have fallen well short. So if you are an investor who bought based on some of the recommendations but not others, your returns may differ.
And as is the case with any paid investing service, you must determine if the cost is justified by the added value to your investment portfolio.
In addition, many investors likely eschew the notion of investing based on individual stock selection in favor of broader mutual funds that allow for steady growth with a more passive approach. Thus, many of the services may not be a good fit if you’re that type of investor.
It’s also unlikely the average investor would choose to sign up for the service devoted to options investing. That’s an advanced tactic beyond what you may be interested in.
One of the unique features on Motley Fool is a free crowdsourcing community designed to assist users in finding good stock tips.
The idea is this: Users rate stocks, based on whether the user thinks the stock will over or under-perform the S&P 500 in a given time-frame. Motley Fool keeps score, with users receiving an accuracy percentage and a rating on a scale of 1 to 100. (There are more than 69,000 rated users currently.)
Stocks also receive ratings based on the collected view of users about whether they will outperform or under-perform. Players with higher ratings have a greater impact on a stock’s rating. The player with the highest rating is awarded the title of Top Fool, and receives a prominent spot on the website.
As of this writing, the Top Fool was a user by the name of TMFBabo, who had an accuracy rating of 95.04 percent and a rating of 100.
CAPS is designed to get smarter over time, as it collects more and more data and refines the “community sentiment” of a stock.
To receive a rating, you must make at least seven active picks. When you rate a stock, you have the option to make a “pitch” and offer a detailed analysis of why you believe a stock will perform a certain way.
In addition to the CAPS community, Motley Fool services offers countless free discussion boards on just about every investment topic you can imagine, as well as many boards that have nothing to do with investing at all (one of the top boards happens to be focused on U.S. politics.)
Many of the most active boards are labeled as “investment analysis clubs” devoted to a certain stock type or sector. There are boards devoted to many individual stocks, which you can find simply by searching with the ticker symbol.
There are also discussion boards tied to Motley Fool premium services. According to some online reviewers, these discussion boards are often the most valuable component of the premium services.
Motley Fool offers a free and useful online tool to help you track your investment portfolio or other securities you’re keeping an eye on. The Scorecard is available on computers and mobile devices and allows you to enter your investment holdings and see the performance of your entire portfolio on a customizable dashboard. (Portfolios can be entered using a spreadsheet, so each holding doesn’t have to be added manually.)
The Scorecard provides 40 different data points and can track as many portfolios as you want.
Motley Fool has three sister companies focused on investment management, wealth management and venture capital: Motley Fool Asset Management, Motley Fool Wealth Management, and Motley Fool Ventures.
Motley Fool Asset Management
Formed in 2008, this was the Fool’s first foray into directly selling investment products. MFAM’s products include an Emerging Markets Fund, a Small Mid-Cap Growth Fund and a Global Opportunities Fund.
In 2018, MFAM entered the ETF space, introducing the Motley Fool 100 Index ETF and the Motley Fool Small-Cap Growth ETF. MFAM’s investments are available directly on the company’s website, or through most major online brokers. MFAM has about $2.5 billion in assets under management.
Motley Fool Wealth Management
This is Motley Fool’s attempt to take its stock and portfolio recommendations and put them to work directly on behalf of investors. With MFWM, you can get a personalized portfolio based on your risk tolerances and investment goals. The company has eight different strategies, and will manage a stock-based portfolio for you in exchange for a fee of 0.95% of aggregate assets for accounts under $1 million.
Larger accounts have a 0.75% fee. Index-based portfolios have a lower fee of 0.4% or 0.3%, depending on account size.
Motley Fool Ventures
In the summer of 2008, Motley Fool entered the venture capital space with an aim to invest in early stage private companies. Investments so far include HomeCare.com, an online service offering reviews of caregivers; LegalMation, an effort to simplify the legal profession using artificial intelligence; and Territory, a company that makes and delivers locally sourced meals.
While Motley Fool’s bread-and-butter business is its advice on U.S. stocks, the company does operate separate sites in seven other countries. It has analysts and other staff in the United Kingdom, Japan, Germany, Australia, Canada, Singapore and Hong Kong. The international websites aren’t quite as robust as the U.S.-based flagship, and many of the subscription services and other offerings are tweaked for the appropriate market.
Motley Fool on Social Media
Motley Fool has an active community of followers on most major social media platforms. This includes more than 724,000 followers on Twitter (@themotleyfool), more than 678,000 Facebook followers, 6,300 followers on Instagram, 159,000 followers on LinkedIn, and 45,000 subscribers on YouTube.
Motley Fool’s Marketing
It’s worth noting that while it’s entirely possible to use the Motley Fool website and gain great insights without paying a dime, you will have to put up with some advertisements for the company’s paid services. Some pitches are obvious, but others have a bait-and-switch feel. You’ll be asked to click on a link to an article, only to find out that article is only available if you pay for a subscription.
Additionally, once you provide Motley Fool your email address, you can be sure you’ll be receiving frequent emails, often with alarmist subject lines such as Richest Man Alive Issues Dire Warning, and Bill Gates’ Prediction Will Give You Goosebumps.
From my experience, these emails come once every other week or so.
The Bottom Line
Since its beginnings as a humble investing newsletter on AOL, Motley Fool has come a long way and built a great track record.
There are many subscription products and memberships out there for investors. As with any such product, it is up to you to determine whether the cost is worth the value gained.
If you are spending $199 for the Motley Fool Stock Advisor, for example, you should expect to see at least $199 in added gains to your portfolio as a result of the company’s advice.
My personal feeling is that the Fool places too much of an emphasis on “stock picking.” Most investors will be better off putting their money in low-cost, broadly diversified mutual funds or ETFs that offer exposure to a wide range of assets.
Because Motley Fool has its own asset management arm, there are likely better places to find objective information on mutual funds and ETFs.
That said, individual investors can benefit from Motley Fool’s overarching emphasis on saving your money, having a long investment time horizon, and keeping costs low.
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