In 1993, two brothers came together and decided to create the “mother of all stock pickers.” Close to 3 decades down the line, how does this stock picker fare? Here’s its scorecard.
Why do traders invest in stock picking services?
Well, from these newsletters, they are given tips and recommendations which they can use so that with time, they can compete their own due diligence on the stocks.
So, we can say that stock picks are a short cut into the stock market, and new traders would especially appreciate such services to enable them to find their feet in the trade.
Since the newsletters are the basis upon which you will be making major decisions as you trade, it is essential that they are of the highest quality.
In this way, your chances of making costly mistakes would be significantly reduced.
At this point, we are going to introduce you to the Motley Fool Stock advisor which is a reputable stock picking service.
We have conducted an extensive Motley Fool review so that you can understand everything concerning the service.
What You Need To Know The Motley Fool Stock Advisor
The Motley Fool Stock Advisor is part of an Investment Company by the same name that was co-founded by two brothers, David, and Tom Gardner.
The service helps you to beat the market by recommending you the best stocks. All the information that is passed to you is backed by extensive research so that every tip is as accurate as it can get.
Since its inception in 2002, this program claims to have generated over 300% in returns and has even outperformed the S&P 500.
Its arch-rival Trade Ideas has also routinely outperformed the S&P since 2016.
In general, we can say that this program aims to guide investors in the stock market to make similar gains to the top dogs in the game.
It achieves this by giving you stock recommendations followed by top-notch research reports.
We do not know what other reviews have told you about the program, but in this article, we are going to tell you everything there is about the service.
In the end, you should be better placed to decide whether or not this program is for you.
Motley Fool Key Features & Our Ratings
If you are wondering what you get when you subscribe to this stock picking service, this section is going to point everything out for you.
I) New Recommendations
This is the main and probably the most popular feature of this program. When you subscribe to the service, you will be receiving two new recommendations monthly.
The founders of the program will be giving one recommendation each.
The recommendation will be coming in email messages, and the following information is going to be outlined in detail:
- The core business of the company
- Important company data and the stock e.g., share market price
- The company’s main clients
- Who runs the company
- Why you are advised to invest in the stocks
- Main risks associated with the recommended stocks
Each recommendation is going to appear on the subscribers’ accounts at the same time.
II) The Best Stocks to Buy
The ‘Best Stocks to Buy’ dashboard is the first thing to greet your eyes when you log into your Stock Advisor Account.
Besides updating every Thursday, the dashboard also refreshes monthly to ensure that nothing on it is outdated. The main features of the dashboard include:
*Five “Timely” picks from David and Tom Gardner each
*Most recent recommendations by both Tom and David Gardner
It is common for some stock picks to appear on the dashboard frequently. In fact, there are stocks that have made it to the list close to forty times since the service was launched.
III) Starter Stocks
The stock advisor states that these stocks are perfect for new investors who are looking for the best portfolios that will offer a strong starting point.
These stocks are selected from a list of those that had previously been recommended by Tom and David.
The list is updated annually, and the advisor insists that you should add these stocks to portfolios that comprise of a minimum of 15 stocks in different sectors.
IV) Stock WatchList
This watch list will provide you with everything you need to know about the stocks that you are interested in. This information will come from the news and analysis that is available on the platform.
The main advantage of having a watch list is that you have a narrower pool of options to choose from so that you can settle on the recommendations that you find appealing.
V) Email Subscription
When you enroll in the email newsletter of this service, you will be entitled to be receiving between four and eight emails monthly.
In each mail, you can expect to find the following content:
- New recommendations
- Expert analysis on various topics such as the market conditions, the hot stocks, etc.
- Trade alerts e.g., when the Gardners cull a recommendation
- Updated recommendations by the Gardners
- Other relevant multimedia content
The only way to escape this enrolment is by quitting your subscription altogether.
This is another aspect of the program that gives you more clues on the stocks that you are holding. It is constantly updating during trading hours and the features you can expect from the program include:
- The current price
- The purchase price
- Ticker symbol
- Purchase date
- Return VS the S&P 500 index
- Day change
This feature allows you to collect and check on stocks that you have been watching as well as those you have already taken positions in.
If you want to import your holdings and the stocks on your watchlist, you will have to link your brokerage account to your Fool.com account.
As soon as the linkage is done, you will be receiving recommendations on your holdings.
VIII) Optional Email Subscriptions
As the name suggests, you are under no obligation to enroll to these newsletters, and they include:
These are simply the daily or weekly updates on the tickers that are on your Scorecard or Watch List.
Here, you get a collection of all the free content that Motley Fool has to offer, and they include social media content, multimedia content, articles, and podcasts.
These are discounted, or money-saving offers that you can take advantage of.
If you enroll for these subscriptions, you can expect a full inbox always.
IX) Premium Research Reports
When you subscribe to the platform, you will get access to premium research reports that have been prepared by the Motley Fool team.
These reports cover various issues that are likely to have an impact on the Stock Advisor’s recommendations, both the new and old ones. They cover macro-economic as well as industry trends that may affect the recommendations.
It is possible for some of the reports to be a summary of some of the recent stock picks by the service.
X) Stock Screener
This is a tool that is often taken for granted, but market watchers would find it to be very convenient. It would help you pay attention to a wide range of factors such as:
- Asset class
- The sector to invest in
- Dividend yield
- The volatility of stock prices, among others
XI) The Performance Section
This section comprises of charts and tables that would help you analyze the performance of a particular recommendation.
In your stock advisor account, this is the section that contains most information, and you will find items such as:
- The company name
- Date of recommendation
- The person recommending (Tom or David)
- Market capitalization and updated share price
- Returns vs. the S&P 500
- Risk score
XII) Premium Articles
These are not ordinary articles, and they are only available to subscribers of the Stock Advisor.
Do not mistake them with premium reports since the articles are shorter, plus they contain more news than the premium reports.
There is also a wide variation between the articles and reports when it comes to the length, format, and topics that it covers.
XIII) Premium Discussion Boards
Another important feature of the Fool.com Stock Advisor are the numerous discussion boards that you can find in the program.
These discussion platforms cover various topics, including:
- The basics of investing
- Personal finance
- Strategies, and so on
If you want to post anything on this platform, you will need to create a unique user name. Note that you can be a passive member of the group and still get to learn something from it.
There is no rule that states you have to take part in anything. You may choose to hang around and pick a few tricks from your fellow subscribers.
How It Works
The Stock Advisor’s Newsletter is guided by seven principles, which are collectively known as the Stock Investor Way. If you want to be a successful investor, you have to stick by these principles.
Let us see what they are.
1. Buy Businesses instead of Tickers
The first principle urges you to invest in the company’s management and prospects, as this would help you make long-term returns.
If you buy into the technical charts, you would only be looking for short-term profits.
As they say, never put all your eggs in one basket so that you can spread the risks.
3. Aim to be a lifetime Investor
The subscribers to this service should only attain to become long-term investors as they would have the potential of being some of the most prominent players in the economy.
Such investors keep a close eye on the different industries, plus they should be investing in stocks continuously.
4. Fish Where Others Don’t
Although Stock Advisor relies on crowd-sourced information, it still urges its subscribers not to follow the masses.
Being unique has its own benefits, and investors should explore unchartered waters to see what they hold.
5. Contain Your Emotions
The stock market can be quite volatile and is characterized by fluctuations in prices. So, it is vital that you do not allow these conditions to influence your investment decisions.
Take your time before you make buy and sell decisions.
6. Have a Scorecard
A scorecard is an important tool that would enable you to keep track of your performance. Luckily, the website, Fool.com, has this tool for you.
The subscriber can start a watch list for his picks, and this would help create some form of transparency for this program.
7. Be Foolish
What this principle means is that you should be a little loose and take chances. After all, the program is about ‘foolish’ strategies that can help you beat the market.
Do not be afraid of failure. Instead, learn from your mistakes and move on to the next pick from which you can make some profits.
The Pricing of Motley Fool
There are three subscription packages to choose from, and you have the option of making either monthly or annual payments.
I) Monthly Subscription
This package would cost you $19 per month, and the renewal occurs in the coming month on the same date as you subscribed to the service.
For instance, if you subscribed on the 15th of December, your renewal would occur on the 15th of the preceding months.
II) Annual Subscription
As for the next package, you will have to part with $199 per month, and the renewal follows the same trend as the first package.
So, you can expect it to renew on the same numerical date as the initiation date.
III) Discounted Annual Subscription
As you would have guessed by now, this package is available at a discounted rate of $99 per month, and it is normally meant for the new subscribers.
Also, the offer is available for some of the monthly subscribers and is normally available in a limited period.
The renewal is based on the current rates, and if any fluctuations occur, your existing subscription would not be affected.
Then, there is no refund for any canceled subscription. However, annual subscribers can get a refund within the first 30 days of purchasing the program.
For any canceled service, you may apply the remaining balance for any other services offered by the Motley Fool service.
About the Creators
Little is known about the founders of this program, David and Tom Gardner. Only that they founded the Motley Fool company back in 1993, and they still run the company to date.
They went on to launch the program in 2002, and it has steadily grown over the years to one of the biggest stock picking services in the world.
Is It Legit?
In this section, we are going to tell you why we believe this program is legit. First, the recommended stocks are very high-quality, and this means that your chances of making exceptional returns from them are very high.
There is no way that a scammer would recommend a stock such as Amazon if they plan to fleece you of your hard-earned money.
Then, when you look at the main features, you can see that all of them are designed to make you a better trader who may turn into a multi-millionaire with time.
You also have a chance to interact with other investors who have become successful after applying the strategies they have picked from this program.
If the customer reviews do not convince you on the legitimacy of this program, then nothing will.
Is It Worth It? Our Motley Fool Review
Well, this is one of the most affordable programs that you may ever come across. You have three subscription packages to choose from, depending on what you can afford.
After the subscription period lapses, you can choose to renew or cancel the subscription altogether.
Then, we did an independent analysis to compare this service to other stock advisory services such as Zacks, Robo-Advisors, S&P 500, and Jim Cramer.
Motley Fool came out as superior to the other services in many different aspects.
Pros and Cons
This program has both advantages and disadvantages, and we are going to touch on both categories in brief.
- You do not have to be an overly aggressive investor to use this service- this does not mean that it is suited for the part-timers or the day-traders looking to make short-term profits
- It is not an obligation for you to renew your subscription once the current term expires. The cancellation will not cost you anything extra
- Transparency- you can access all the stock recommendations since the program’s inception. Therefore, you can gauge the program’s credibility over time
- Offers access to premium community boards- these are platforms that allow you to interact with the veterans in the stock market. You can pick a few tips that will guide you into becoming a similarly successful investor
- Premium Content- these include premium reports and articles, and the serious investors should find these materials to be useful as they attempt to beat the market.
- Offers no refunds for canceled subscriptions
- For the discounted annual subscription, it is not clear whether the renewal would occur on the low rates or higher rates
- The Stock Advisor Email Newsletter is not an optional service. So, you should be ready to be bombarded by up to ten emails per day
If you are an investor who is looking to hold on to stocks into the foreseeable future, the Motley Fool Stock Advisor is just for you.
Research would tell you that the recommendations in this platform are winners and have earned up to three times as much as what other competing services have.
Most of all, these are not random picks but are backed by extensive research done by the Gardner brothers.
So, we think that this a good service – one that’s worth banking on.