The Motley Fool vs Zacks 2024

By: Jeremy Biberdorf
 

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Choosing the best market research platform is essential for investors who like to play the market by investing in individual stocks. Your chosen research platform can make the difference between beating the market and severely lagging it.

For more detailed analysis of each product check out our full reviews:

What is The Motley Fool?

motleyfool.com website

The Motley Fool is a well-respected investment research company offering insightful stock recommendations, market analysis, and financial guidance. Founded in 1993, it has become renowned for its accessible approach to investing, making it a popular choice among both novice and experienced investors.

The firm’s emphasis on long-term investment strategies, particularly in growth stocks, has earned it a reputation for providing reliable and profitable stock picks through its various subscription services. The flagship service, Stock Advisor, is especially noted for its monthly stock recommendations and thorough market insights, appealing to those with medium to long-term investment horizons.

Explore The Motley Fool further by reading my comprehensive review.

What is Zacks?

zackstrade.com website

Zacks Investment Research, established by Len Zacks in 1978, is a prominent financial research firm offering comprehensive quantitative analyses on stocks, mutual funds, and ETFs. Known for its distinctive Zacks Rank system, the company identifies top-performing investments using a unique scoring method.

Zacks caters to a diverse range of investment strategies, including both short-term trading and long-term investment goals, through various products like Zacks #1 Rank list and Focus Report. The company’s approach is rooted in a robust quantitative analysis framework, setting it apart as a go-to resource for investors seeking data-driven investment insights.

Discover more about Zacks – check out my full review.

 

The Motley Fool is Better for:Zacks is Better for:
Suitable for moderate-risk, long-term investing.Ideal for high-risk, short-term trading strategies.
Focuses on qualitative, growth-oriented stock analysis.Employs a quantitative analysis approach with a comprehensive scoring system.
Offers straightforward monthly stock picks.Provides advanced, detailed investment analysis.
Specializes in individual growth stock recommendations.Covers stocks, mutual funds, and ETFs comprehensively.
Affordable for most investors.Offers bundled product options for various needs.

When deciding between stock picking services, you should evaluate their costs and how well they cover your needs. But with a lot of this information only available to their paying customers, it can be difficult for individual investors to decide which platform is best for them without subscribing to all of them.

The Motley Fool and Zacks are two of the best research firms in the stock advisor business. In many ways, their services are the same. In a few ways, they are different. Examining these differences can help you determine which one of these services to go with.

Let’s look at some comparisons between The Motley Fool vs Zacks:

The Motley Fool Zacks
Annual Subscription Fees Basic Service Stock Advisor $199 (steep discount for the first year with Modest Money) $249 for Zacks Premium
Annual Highest Subscription Cost $13,999 for The Motley Fool One Zacks Ultimate cost is $2,995
Securities Analyzed Stocks Stocks, Mutual Funds, ETFs
Investing Approach Qualitative/ Quantitative Quantitative
Horizon Considered > 5 years 1 year
Best Use Moderate Risk Takers High Risk Takers
Modest Money Review The Motley Fool Review Zacks Investment Research Review
Current Promotion

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Modest Money Overall Rating
4.9 rating based on 5 ratings
4.3 rating based on 5 ratings

Modest Money assesses that The Motley Fool’s qualitative approach to long-term investing is suitable for more investors than Zacks short-term quantitative investment analysis.

Zacks VS The Motley Fool: Determining Factors?

The Motley Fool is a research firm. Zacks can refer to its research firm, Zacks Investment Research, or its subsidiaries, Zacks Trade and Zacks Investment Management, all of which were founded by economist Len Zacks.

Since we are reviewing investment research firms, when we use “Zacks” in this review, we will be talking about Zacks Investment Research and not the brokerage platforms Zacks Trade and Zacks Investment Management.

Like most investors, you probably don’t have all day to read and learn everything about the stock market, so choosing the best market research firm is essential. You need to be able to get impactful information that suits your investment preferences and style.

So, between The Motley Fool and Zacks Investment Research, which is more likely to suit your investment decisions and goals?

Factor 1: Investment Strategies

One of the things that sets research firms apart from one another is the type of investment mindset they espouse. Let’s face it, there are many ways to invest in the stock market, from day trading to value investing and everything in between.

Research on stocks tends to be opinionated, which helps you understand whether you should invest in a particular security. They are typically written from the point of view of a particular investing style.

The Motley Fool’s Investment Style is Preferable to Zacks

  • The Motley Fool advocates buy and hold
  • Zacks provides near-term analysis
  • Modest Money prefers long-term over short-term investing

The Motley Fool Investment Strategy

The Motley Fool’s strategy, in its own words, is “long term, buy and hold.” They want you to hold all their stock recommendations for at least five years. They note that market corrections can and do happen, but the stock market eventually drives higher. By having a longer holding period, you amplify your chances of great returns while minimizing your risk.

The Motley Fool gravitates to high-growth stocks. Investors make money from selling these stocks after they appreciate or “grow” in value in contrast to dividend stocks, which offer consistent cash flow.

The Motley Fool is one of the most well-known subscription services on the Internet. It has several subscriptions geared towards different types of specialized investing, but its flagship subscription is Stock Advisor. The Motley Fool Stock Advisor offers subscribers analysis of its market-beating stock picks with moderate volatility.

Stock Advisor presents subscribers with two monthly stock picks and their rationale about why these might be good picks. This review conducts a deep dive into The Motley Fool’s stock pick performance, showing how some of their picks have returns in excess of 20,000%. It also explains its proprietary “crushability scale,” which is what they use to assess the volatility of its picks.

The Motley Fool is perfect for long-term investors who are willing to take measured risks by investing in individual stocks that are likely to grow in value over a medium-term horizon. Investors unwilling to accept the risk of investing in an individual stock would be better off sticking to diversified portfolio or exchange-traded funds (ETFs) investing.

The Motley Fool combines qualitative and quantitative investment analysis but leans more heavily towards the former. Its picks are mainly based on the assessments of individual human analysts and financial advisors. For all its monthly stock picks, The Motley Fool recommends having at least 25 separate stocks and holding them for at least five years.

Zacks Investment Strategy

Zacks offers a similar stock-picking service to Stock Advisor. Known as the Zacks #1 Rank list, it’s Zacks stock advisor version; these are the picks that Zacks believes are at the top 5% of the market (Zacks strong buys) and which have the most long-term potential.

Zack’s also allocates “style scores” to their stock picks, which analyze a security’s value, growth, and momentum. In addition to these style scores, they will combine them into a “VGM” score, a weighted combination of these scores. The idea is to pick a stock on Zacks’ #1 Rank list with strong qualities in one or all these categories. This presents a very flexible approach to investing style.

If you, as an investor, like trading on momentum (i.e., the idea that the stock price will continue to move in the same direction it is already headed), Zacks style scores can help you follow your preferred investing style without crunching the numbers yourself.

While The Motley Fool specializes in long-haul picks, Zacks Investment Research focuses on short-term picks. Its flagship Zacks #1 Rank list is expected to pay off over an investment horizon of one to three months.

Zacks Recommendations is another list of stocks with a longer-term horizon of six months or more. Zacks Investment Research also offers the Focus Report, which is a list of 50 top long-term stock picks they believe will outperform the market over the next six months.

Zacks picks securities based on quantitative models. In addition to stocks, they offer mutual funds and ETF research.

The Motley Fool Has a Preferable Investing Style

Modest Money prefers The Motley Fool’s investing style over that of Zacks Investment research. For individual securities investing, you expose yourself to far less risk with five years or more investment horizons instead of those as short as one to three months.

Factor 2: Cost

Once you start making millions of dollars off your stock investments, you may not care about how much you pay for research services, but until then, your finances might be too constrained to pay for the most expensive research options.

Between The Motley Fool and Zacks, which is more cost-effective? It depends on what you buy. Both research firms have a wide range of products available for different costs.

The Motley Fool’s Basic Subscription Costs Less Than Zacks

  • The Motley Fool’s Stock Advisor is $199 annually
  • How much does Zacks Premium cost? $249 annually
  • The Motley Fool’s basic subscription costs less than Zacks

The Motley Fool Costs

The Motley Fool’s cheapest subscription, Rule Your Retirement, costs $149 annually. Its most expensive premium service, which gives you access to all their analysis, weighs in at a hefty $13,999 per year.

This shows you the diversity of The Motley Fool’s customer segments, including all investors.

The Motley Fool’s signature subscription, Stock Advisor, costs $199 per year, though if you buy it here, you will receive a limited time, steep discount for the first year. Stock Advisor has an impressive track record of 20+ years and an average return of around 500%, or four times that of the S&P 500.

Another subscription to consider is The Motley Fool’s Rule Breakers, which costs $299 annually. This subscription focuses on slightly riskier stocks but might make even more significant gains. Rule Breakers picks also have an impressive track record, historically trumping the S&P 500 two to one.

Zacks Costs

With Zacks, you can’t subscribe to one product. All its premium memberships are bundles containing multiple products. Here’s how much these products cost:

Zacks Premium costs $249 annually and includes Zacks’ #1 Rank, Equity Research Reports, Focus List portfolio of 50 longer-term stocks, and premium screens.

Zacks Investor Collection costs $495 annually and includes Stocks Under $10, ETF Investor, Income Investor, Value Investor, Zacks Confidential, Zacks Premium, and Zacks Top 10 Stocks.

Zacks Ultimate costs $2,995 per year and includes Black Box Trader, Blockchain Innovators, Commodity Innovators, Counterstrike, ETF Investors, Headline Traders, Healthcare Innovators, Home Run Investor, Income Investor, Insider Trader, Large-Cap Trader, Marijuana Innovators, Options Trader, Short Sell List, Stocks Under $10, Surprise Trader, Value Investor, TAZR, Technology Innovators, Zacks Premium, Zacks Confidential, and Zacks Top 10 Stocks.

It’s a bewildering list, to be honest, and while the detailed research reports might be great, they could overwhelm the average or beginner investor. You can learn more about these Zacks Investment Research offerings by clicking here.

The Motley Fool Has Lower Cost Options

The Motley Fool’s Stock Advisor is cheaper and easier to digest than any of the products by Zacks, including Zacks Premium. At an investment of only $89 for the first year, this is one of the best research options on the market.

Factor 3: Upselling

There is no more significant turn-off when choosing an investment research services company than by signing up for one service only to be constantly spammed by emails attempting to upsell you to another. I hate being enticed into signing up for a new service.

Zacks Has Less Upselling than The Motley Fool

  • The Motley Fool sends lots of emails for its products
  • Zacks sends fewer upselling emails
  • Zacks has the upper hand when it comes to sending fewer emails

The Motley Fool Upselling

The Motley Fool is one of the best stock research firms out there, but its approach to getting you to sign up for more of its products can be downright spammy. When you sign up for their premium service, you become inundated with emails promising the next best thing.

Fortunately, you can tweak your settings to reduce the upselling significantly. Once you subscribe to one of their services, go to “Email Settings” under “My Fool”, opt out of “Free Email Subscriptions”, and update your “Promotional Communications Preferences.”

It takes a few minutes to set up, but it’s worth it if you hate upselling emails. Of course, you might miss out on some discounted rates for other products.

Zacks Upselling

Zacks does a lot less upselling of its products than The Motley Fool, although they do, according to their website, “rent” out their direct mail list of 1.5 million subscribers to advertisers.

Zacks Emails You Less than The Motley Fool

From our experience at Modest Money and user feedback, it seems that Zacks Investment Research will bombard you with fewer upselling emails than The Motley Fool.

Factor 4: Performance

When considering investment research firms, you probably want to know their respective track records. After all, the best research firm for you comes down to performance.

For our performance analysis, we will compare The Motley Fool’s Stock Advisor with Zacks #1 Rank. The figures used in this analysis are from The Motley Fool and Zacks’s data. It has not been independently verified by Modest Money.

Modest Money Rates Stock Advisor Higher than Zacks

  • Stock Advisor has achieved four times market gains since 2002
  • Zacks #1 Rank has doubled market returns since 1988
  • Stock Advisor appears to have greater returns than Zacks

The Motley Fool Stock Advisor Performance

Since it began in 2002, The Motley Fool’s Stock Advisor picks have generated an average return of around 500% as of the publication date. This is over four times the rate of the S&P 500 in the same time frame.

With its style of recommending only two stocks a month, The Motley Fool has achieved this return through narrow, targeted fundamental analysis and research. Stock Advisor has a lot less static than other investment research services and a lot less tendency to drift away from their core proficiency of profitable stock picks.

This is how The Motley Fool has achieved its decades-long high-performance record.

Zacks #1 Rank Performance

Is Zacks worth it? Since 1988, Zacks #1 Rank strong buys have achieved an average annual return of nearly 26% as of the publication date. This is more than double the average annual returns of the S&P 500 and very respectable for short-term investment opportunities.

Modest Money Awards Better Performance to The Motley Fool over Zacks

Comparing overall returns to annual returns is apples to oranges, especially when we don’t know how long the stocks are being held. Still, Modest Money prefers the medium-term approach of The Motley Fool vs Zacks, so we will award the performance points to The Motley Fool.

While The Motley Fool has achieved four times the S&P return, it is important to note that Zacks has been able to steadily beat the S&P since 1988, almost twice as long as The Motley Fool’s successful track record.

Factor 5: Customer Service

When it comes to choosing between investment services like The Motley Fool and Zacks, assessing factors beyond mere financial performance becomes crucial. While the numbers and returns are undeniably important, there’s another dimension that savvy investors shouldn’t overlook: customer service.

Just as their investment strategies differ, so too do their approaches to supporting and engaging their clients. By exploring this facet, we can better understand what sets The Motley Fool and Zacks apart beyond the balance sheets and performance percentages.

The Motley Fool Customer Service

For subscribers seeking assistance, The Motley Fool offers accessible avenues of communication. Customer service representatives can be reached at 877-629-2589 within the confines of business hours, spanning Monday through Friday, from 9 a.m. to 5 p.m. EST.

An alternative option for subscribers lies in the availability of SMS stock alerts. Additionally, inquiries can be directed to the customer service team through the conveniently provided contact form on the company’s official website.

Zacks Customer Service

ZacksTrade ensures dynamic customer assistance across multiple channels, fostering ease of access and engagement. Human customer service representatives are available via phone, email, chat, fax, and social media platforms.

This support is operational on weekdays, Monday through Friday, from 9:00 a.m. to 6:00 Eastern Standard Time, except on recognized American holidays such as Christmas, the Fourth of July, and Martin Luther King Day.

ZacksTrade provides additional options for prompt interaction, including live chat and email correspondence. Notably, even a fax number is offered for those preferring such communication. The company’s customer support ambit extends to the realm of social media, with connectivity through platforms like Facebook and Twitter.

It’s pertinent to note that ZacksTrade’s US-based customer service is centralized at their downtown Chicago offices. While acknowledging the service’s presence, reviewers have indicated that it may be lacking in certain aspects. This perceived deficiency could stem from potential delays in response time, with users occasionally waiting for days to receive replies from ZacksTrade. Additionally, international users might encounter challenges in reaching ZacksTrade’s customer support, potentially contributing to lower satisfaction scores.

Who Does It Better?

Both platforms exhibit dedication to addressing user needs. ZacksTrade stands out with its comprehensive options and attentiveness, ensuring a well-rounded customer experience.

Meanwhile, The Motley Fool excels by delivering specialized guidance through more direct channels. Ultimately, the choice between the two is shaped by individual preferences and priorities, as each platform’s unique approach has its own merits.

Factor 6: Rating

In the realm of investment services, numbers tell only part of the story. Beyond the spreadsheets and financial figures, the experiences and satisfaction of customers hold a unique vantage point. As potential investors weigh their options between The Motley Fool and Zacks, it’s crucial to consider an often-overlooked factor: customer ratings.

By delving into the real-life experiences of those who have entrusted their investments to these platforms, we can uncover insights that go beyond the cold, complex data and provide a more holistic understanding of what The Motley Fool and Zacks genuinely offer.

The Motley Fool Ratings

Customer sentiment toward The Motley Fool is generally positive, although opinions are varied. Reviews highlight both praise and concerns. One notable grievance centers on the frequency of email marketing promoting additional products and services, potentially leading to an inundation of promotional content.

Another recurring issue revolves around the timing of investments. The company prominently emphasizes its stock recommendations as long-term holdings, typically spanning five years or more. Consequently, evaluating their short-term performance remains challenging.

Presently, The Motley Fool boasts a 3.6/5 star rating on Trustpilot, signifying a commendable level of satisfaction. This rating is derived from a substantial pool of over 7,000 reviews, providing a substantial basis for assessment.

On the Better Business Bureau (BBB), The Motley Fool secures a 3.82/5 rating based on feedback from 139 customers, correlating with a B rating. This platform, however, witnesses several monthly complaints, often related to promotional upgrade offers.

Zacks Ratings

Looking at customer ratings, it’s evident that ZacksTrade has garnered attention for its attentive approach to user engagement. Reviewers commend the various communication channels available, which include phone, email, chat, fax, and social media platforms. However, it’s important to note that there have been instances of delayed responses reported, potentially affecting the overall satisfaction of certain users.

Zacks Trade’s customer service efforts are well-reflected in its BBB rating of 3.82/5 based on 139 customer reviews, correlating to a B rating. While there are several monthly complaints, these often revolve around upgrade offers and occasional response time delays. Nonetheless, ZacksTrade’s proactive engagement through social media platforms like Facebook and Twitter demonstrates an effort to meet customers where they are.

The Winner Is…

When choosing between The Motley Fool and Zacks, investors should consider their investment style, risk tolerance, and financial goals. The Motley Fool’s long-term, growth-focused strategy is ideal for moderate-risk investors, while Zacks’ quantitative analysis caters to those seeking short-term, high-risk opportunities.

In terms of cost, The Motley Fool offers more affordable options for individual investors. For comprehensive and flexible investment analysis, Zacks provides valuable insights, especially for short-term traders. Click here to get started with The Motley Fool for long-term investment strategies or explore Zacks for data-driven, short-term trading analysis.

Who Is It Good For: The Motley Fool vs. Zacks

The decision between The Motley Fool and Zacks goes beyond comparing financial gains and market predictions. It’s about finding the right fit for your individual investment goals, preferences, and risk tolerance.

By examining the strengths, styles, and offerings of The Motley Fool and Zacks, we aim to help you navigate this choice with a deeper understanding of which service aligns best with your unique investment journey. After all, the right path to success is often as personalized as your financial aspirations.

The Motley Fool

The Motley Fool is a prominent player in the investment realm, offering a range of services and recommendations tailored to different types of investors. Here, we outline who could benefit the most from considering The Motley Fool’s offerings.

So if you’re seeking a long-term strategy, personalized insights, or a focus on education, this list can help you gauge whether The Motley Fool is the right fit for your investment journey.

  • Long-Term Investors: The Motley Fool’s stock recommendations are geared towards a long-term buy-and-hold strategy, typically spanning five years or more. The Motley Fool’s approach aligns well if you want to build a diversified portfolio with a patient investment horizon.
  • Investors Seeking Personalized Recommendations: The Motley Fool’s customer service may be particularly appealing if you value a more personalized touch. Their email contact form and SMS stock alerts offer direct communication channels for tailored guidance.
  • Those Seeking Established Performance: The Motley Fool’s track record since 2002 boasts an average return of around 500%, outperforming the S&P 500 fourfold. If historical performance and a decades-long high-performance record attract you, The Motley Fool’s offerings might align with your goals.

Zacks

ZacksTrade is a prominent contender in the investment landscape, offering a comprehensive range of services tailored to a diverse set of traders and investors. This section outlines who might find ZacksTrade’s offerings particularly well-suited to their needs.

Whether you’re an active trader seeking quick responses, an international market enthusiast, or someone valuing extensive communication options, this list will help you assess whether ZacksTrade aligns with your investment aspirations.

  • Active Traders and Investors: ZacksTrade’s live customer support through various channels, including phone, email, chat, and social media, caters to those who frequently engage in trading activities and need quick responses to their inquiries.
  • Those Valuing Extensive Communication Channels: ZacksTrade’s availability through phone, email, chat, fax, and social media platforms ensures that users have a variety of ways to interact and seek assistance, making it suitable for those who prefer diverse communication options.
  • Traders Focused on International Markets: ZacksTrade’s Chicago-based US customer service may provide an advantage for those active in international markets. However, some users outside the United States have encountered difficulties reaching customer support.

The Motley Fool vs. Zacks: The Bottom Line

So, is Zacks or The Motley Fool the way to go? Modest Money does love well-diversified portfolio investing based on computer algorithms, but we are not fans of quantitative model investing for individual holdings. These are almost always short-term investments, which exposes them to many systematic and idiosyncratic risks. In other words, it overexposes your wealth to unpredictable factors like market crashes or one bad earnings report.

And we don’t hate individual stock-picking either, especially not when it is done in the same responsible manner as The Motley Fool advocates, holding more than 25 stocks at any given period and each stock over a horizon of at least five years.

If you can afford one investment research company, go with The Motley Fool – click here to sign up.

The Motley Fool is Better for:Zacks is Better for:
Suitable for moderate-risk, long-term investing.Ideal for high-risk, short-term trading strategies.
Focuses on qualitative, growth-oriented stock analysis.Employs a quantitative analysis approach with a comprehensive scoring system.
Offers straightforward monthly stock picks.Provides advanced, detailed investment analysis.
Specializes in individual growth stock recommendations.Covers stocks, mutual funds, and ETFs comprehensively.
Affordable for most investors.Offers bundled product options for various needs.

The Motley Fool

With The Motley Fool, you expose your portfolio to some risk, sure, but if you follow their recommended diversification rules, you have a much lower probability of incurring losses.

Within The Motley Fool portfolio, the subscription investors are most likely to find beneficial is Stock Advisor. And that’s also the one you can subscribe to here for only $89 for the first year, a savings of 55%.

55%* discount based on the $199/year list price. Limited-time promotional price for new members only. Membership will automatically renew at the current list price.

Ensure you follow The Motley Fool’s guidance to hold 25 or more stocks, each for at least five years, to maximize your risk/reward ratio.

Learn More About The Motley Fool

Zacks

On the other hand, if you thirst for research on mutual funds and ETFs as much as on stocks, Zacks Investment Research might be the research firm for you.

They are more expensive, and their quantitative-driven picks might be difficult to understand, but they have doubled the market returns over the past 35 years.

If this sounds good to you, you can subscribe here to one of the products at Zacks Investment Research, starting at $249 per year.

Learn More About Zacks

Frequently Asked Questions

Is there a free version of The Motley Fool or Zacks?

Neither The Motley Fool nor Zacks offers a completely free version of their services. However, both provide some free content on their websites, like articles and analysis, which can be useful for getting a feel of their investment approach. For full access to their stock recommendations and in-depth research, a paid subscription is required.

Which platform is better for beginner investors, The Motley Fool or Zacks?

For beginners, The Motley Fool is often considered more user-friendly due to its straightforward, long-term investment strategies and easy-to-understand analysis. Zacks, with its more complex quantitative methods and short-term focus, might be overwhelming for those new to investing.

How do the investment strategies of The Motley Fool and Zacks differ?

The Motley Fool focuses on long-term, buy-and-hold strategies, often recommending growth stocks with potential for significant appreciation. Zacks, on the other hand, uses a proprietary scoring system to identify stocks with immediate potential, catering to short-term and momentum-based trading styles.

Can international investors use The Motley Fool and Zacks?

Yes, international investors can subscribe to both The Motley Fool and Zacks. However, their stock recommendations are primarily based on the U.S. stock market, so international users should consider how these suggestions fit into their overall investment strategy.

What types of investors would benefit most from Zacks?

Zacks is ideal for investors who prefer a data-driven, quantitative approach and are comfortable with short-term trading. It suits those who enjoy analyzing numbers and trends and are looking for frequent trading opportunities.

Are The Motley Fool’s stock recommendations only for U.S. stocks?

Primarily, yes. The Motley Fool’s stock recommendations are mostly focused on U.S.-listed stocks. They do have some international stock picks, but the majority of their analysis centers around the U.S. stock market.

How do the costs of The Motley Fool and Zacks compare for their basic services?

The Motley Fool’s basic service, Stock Advisor, typically costs less than Zacks’ Premium service. Both offer annual subscriptions, but The Motley Fool’s Stock Advisor usually has a lower price point, making it more accessible for budget-conscious investors.

Do either The Motley Fool or Zacks offer portfolio management services?

Neither The Motley Fool nor Zacks offers direct portfolio management services. They provide investment research and stock recommendations but do not manage investments or portfolios on behalf of clients. Users must make their own trading decisions based on the research provided.


Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He’s a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.