The Motley Fool is an investing advice company that helps people make better stock picks.
Fool regularly beats the market and helps its members do the same - all at an affordable price.
Picking stocks successfully is a tall order. And even if you manage to do so, it can be very time-consuming. In this Motley Fool review, we'll examine whether The Motley Fool is up to the task of helping you beat the market.
The Motley Fool offers a number of premium services, including Stock Advisor, Rule Breaker, and Rule Your Retirement.
We will touch on all of these during the review but there will be emphasis on Stock Advisor as that is the company's crown jewel.
What Is The Motley Fool?
The Motley Fool is an investing advice company founded in 1993 by David & Tom Gardner and Erik Rydholm. The company is based in Alexandria, VA, just outside Washington, D.C.
If you have ever done any sort of research into investing, you've probably at least heard of The Motley Fool. The company doesn't like to take itself too seriously (hence the somewhat ironic name), but it has been mostly successful nevertheless.
At The Motley Fool, we take our purpose seriously,
but that doesn't mean we take ourselves too seriously.
It takes its name from a court jester in Shakespeare's As You Like It. Still, Fool has had some serious success in the investing world.
It has also had its ups and downs. As a result of the dot-com bubble, Fool lost about 80% of its staff because it had to lay people off.
But despite having struggled at times, The Motley Fool persevered and is doing better than ever today. In 2002, shortly after the dot-com bust, it introduced Stock Advisor, which has since become its most popular service.
Motley Fool Stock Advisor
Stock Advisor has been a huge success for the company and its members alike. This graph shows the hypothetical growth of $10,000 in Fool's recommended stocks:
Just $10,000 would have grown to around $250,000 in just 18 years using Fool's picks. Very impressive. Stock picks are updated every Thursday for Stock Advisor subscribers.
And these are not just hypothetical numbers. Founders Tom & David Gardener have both tracked their returns sine TMF's inception.
Both founders have seen some impressive results. As of this writing, here are the historical returns each has recorded:
Tom Gardner: +236.9%
David Gardner: +752.1%
S&P 500: +102.%
As you can see, the brothers have had some impressive results in the real world, so you know you aren't just buying into hype.
The Motley Fool is not a day trading service, nor is it one that focuses on investing in mutual funds or ETFs. Instead, its strategy centers around a buy-and-hold position on individual stocks.
In that sense, it is something of a middle ground - still semi-passive while giving members a chance to beat the market.
Members receive two stock picks every month - undoubtedly the benefit that attracts the most members.
There are some stocks I wasn't surprised to see, while others have been completely new to me.
Each time The Motley Fool recommends a stock, it provides an in-depth analysis along with the pick. This allows members to help understand the specific characteristics as well as potential market factors that led to the pick.
Needless to say, this is a nice perk to have because these analyses can help you understand the specific factors that make a stock worth buying. Even if you aren't interested in picking winning stocks on your own, it is helpful to know the "why" and not just the "what."
Fool is very thorough in the research it provides on its picks. It uses various factors to show the strength of a stock.
This is not to say every stock it picks is a winner, which is why it recommends maintaining a well-balanced portfolio of at least 15 individual stocks.
Motley Fool Pricing
The Motley Fool offers a wide variety of products. However, Stock Advisor is its most popular product, so that's what we'll pay closest attention to.
One of the best things about Stock Advisor is just how affordable it is. For new members, the cost is $99 for your first year and $199 after that.
Considering how lucrative the stock picks can be, this is a great deal. You only pay just over $16 per month even after the price increase.
When I signed up, I was presented with the new member prices:
I would not recommend signing up for one month for two reasons:
1. The most obvious reason is how much higher the monthly cost is. At $39/month, you would pay $468 per year.
2. Stock Advisor comes with a 30-day money-back guarantee, so if you just want to try it out, you can ask for a refund if you aren't satisfied.
Fool offers a variety of premium services in addition to Stock Advisor. For instance, Rule Breakers runs $299, but this service also has a $99 for the first year.
Rule Breakers gives you access to David's picks. His picks rarely overlap with Tom's, and remember that David has a historical return better than 700%.
Stock Advisor is probably still the better starting point, but the two services can compliment each other well.
If you're more interested in Rule Your Retirement, which focuses on safer exchange-traded funds (ETFs), the cost is $77 for your first year and $149/year thereafter.
In addition to the obvious benefit of Fool's monthly stock picks, there are additional features that will help you build a better portfolio. Let's take a look at some of them now.
Starter Stocks are exactly what they sound like. These are stocks that are perfect for someone who is new and wants to start building a portfolio.
This list is compiled annually and consists of stocks that are not only perfect for building out a new portfolio but can also strengthen existing ones. These are also stocks on which Fool is "long," meaning you're safe to hold them long-term even if they don't make next year's list.
I personally found this list very helpful because even though you immediately see Fool's stock picks as a new member, I wasn't sure if they were ideal for building a new portfolio.
News & Updates
As a member, you'll have access to frequent articles that keep you updated on all the latest developments. While these updates include buy and sell recommendations, they also touch on other topics, such as:
- Best buys now
- Guidance change
These are just some of the categories, but this gives you an idea of the type of content that is published regularly.
Generally speaking, you'll see at least one of these articles every 1-3 days; sometimes you may see multiple articles in a single day.
The market can be chaotic and unpredictable, so this makes sense in a way.
You'll also gain access to a community forum that allows you to discuss a variety of topics with other members - from the very basic to the more advanced.
The forum has quite a bit of activity, too, so you'll be able to get a lot of your questions answered here.
Stock Advisor Reports
Stock Advisor reports are yet another way you can get an in-depth look at the inner workings of the stock market. Some of these reports are incredibly detailed and packed with a ton of information.
In addition to general stock market analysis, you'll also find reports from Tom & David with some of their most recent picks and why each of the stocks metioned are a buy.
Rating The Motley Fool's Features
Many people join simply for the stock picks. While that is undoubtedly a nice perk, that's not the only thing Fool offers.
So, how do the features stack up?
Stock picks from The Motley Fool have a great track record. This is not to say every single one has been a winner, of course.
Indeed, it has certainly had some picks that haven't panned out so well. However, it has also had picks that have had better than a 20,000% return.
The result is that its overall return has been strong. Its historical return fluctuates, but it tends to be around 400-500%.
One can hardly ask more for a service recommending stock picks.
Education & Community
Education & Community
The Motley Fool regularly publishes in-depth reports that keep you up to speed on market trends as well as the latest developments on individual stocks.
If a stock falls out of favor and should be liquidated, you'll be promptly informed of that, too.
Plus, there is an active community forum where you can get answers to all kinds of common questions and ask yours as well.
New members can sign up for both Stock Advisor and Rule Breakers for just $99 each for the first year. That means each will cost you just $8.25 per month your first year.
And this is not to say you have to sign up for both. You can sign up for one or the other.
Considering the stellar returns both brothers have seen with their portfolios, this is an incredibly affordable way to gain access to their stock picks.
The Motley Fool's most popular service, Stock Advisor, is just $99 for the first year, and $199 after that. Its other popular stock recommendation service, Rule Breakers, is $99, then $299.
It's not uncommon for services recommending individual stocks to cost several times more than this. In fact, day trading services can have monthly costs that look similar to Fool's annual price.
How Do I Sign Up For The Motley Fool?
Signing up is incredibly easy. All you have to do is head over the premium services section, select the service you want, and that's pretty much it.
Once you enter your name & billing information and select monthly or annual billing (note: annual is a much better deal), you're be all set.
You will regularly receive emails with the latest purchase recommendations. Or, if you prefer, you can visit the website and see all the latest stock picks.
The site does let you favorite stocks and has a "buy" button, but you can't buy directly through The Motley Fool's website. You'll have to use your own stock broker.
As you can see, getting signed up is very simple. It only takes a couple of minutes.
The Motley Fool Pros & Cons
The Motley Fool is a great value and has the data to show it's been largely successful.
Although there have been a few hiccups along the way, the company has persevered and continues to see long-term success.
After all, the numbers don't lie. The fact that the founders have had a combined 4-500% historical return (compared to ~100% for the S&P in the same time period) shows just how success they have been.
If you're looking for a simple way to start investing in individual stocks, this is a great place to start. Building a portfolio of 15 stocks using Fool's recommendations can put you on the path to investing success.
Ready to get started? Click for The Motley Fool pricing & details.