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Is The Motley Fool Worth It?

By Dave

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Is Motley Fool Worth It

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The Motley Fool is one of the most well-known financial media companies in existence. The company was founded in 1993 and has since evolved into a powerhouse.

If you’ve been involved in the stock market for even a few months, you’ve likely been exposed to The Motley Fool’s content. It’s everywhere.

The company provides both free articles and paid investing advice services, the most popular being Stock Advisor – the focus of this guide.

When addressing the question, “is The Motley Fool worth it?”, we are referring to Stock Advisor – The Motley Fool’s flagship offering.

Stock Advisor offers monthly stock picks that have a history of performing exceptionally well. The service is reasonably priced and has a track record longer than most competitors.

Is The Motley Fool Stock Advisor worth paying for?

There are a few things worth considering. Keep reading to find out.

About The Motley Fool Paid Stock Picks

To determine whether or not The Motley Fool is worth paying for, we will focus primarily on the Stock Advisor service. However, the same analysis could be applied to the company’s other services, like Rule Breakers, Everlasting Stocks, and Epic Bundle.

We also won’t go into too much depth on how Stock Advisor works and what members get, as you can read our full review to learn everything you need to know about the service.

We will, however, quickly address the key features that make this service stand out.

The Motley Fool’s stock picking service stands out for four key reasons:

  1. The Performance
  2. The History
  3. The Stock Picks
  4. The Price

Stock Advisor stock picks have been beating the S&P 500 by a considerable margin. As of September 2023, Stock Advisor picks have 3X’ed the returns of the S&P 500. This has a big impact on investment returns.

Motley Fool Performance

More importantly, the service has a track record of over 20 years. Many competing services have had good years here and there or haven’t been fully tested yet. The Motley Fool stands the test of time.

Unlike other stock picking services that charge upwards of $1,000 annually, The Motley Fool Stock Advisor is modestly priced at $199/year (with discounts available for new members).

Is The Motley Fool Worth Paying For?

So, is The Motley Fool worth it?

The short answer is yes.

At only $199/year (or lower for new members), it’s hard to find another similarly priced service that has the same track record as The Motley Fool Stock Advisor.

New Member Special

Get Stock Advisor for Only $99 for Your First Year

(regularly $199)

Of course, there are a few other considerations before you hit the buy button. Let’s go through them.

Account Size

First and most importantly, you should consider your account size before signing up.

Whenever you pay for a premium investing service, your goal should be to recoup the costs (and then some) from the service’s offerings.

Let’s assume you pay $99 for your first year of access to The Motley Fool Stock Advisor, as this promotion is regularly available to new members.

The question, “is The Motley Fool worth it?” could be rephrased to, “will The Motley Fool help me make an additional $99 or more?”

The best way to answer this question is to consider your account size and the additional returns necessary to recoup your investment.

For example, if you have a $1,000 investment account, you need to generate an additional 10% in annual returns to recoup your investment. If you have a $10,000 account, you only need to generate an additional 1% in annual returns.

It’s also worth considering your ability to diversify your portfolio, which leads to our next point.

Ability to Adhere to Recommendations

The Motley Fool recommends that investors buy over 25 stocks with plans to hold them for five years or longer.

The stock picking services have down years and stock picks that lose money. In order to maximize the value of the service, you need to be able to diversify your portfolio and hold stocks for longer periods of time.

For context, looking at The Motley Fool’s ten most recent stock picks (as of September 2023), the best-performing stock has a 5-year return of 225%, and the worst-performing stock has a 5-year return of -20%.

If you were to only invest in one stock, you may have chosen the underperformer. If you invested in all ten, you would maximize your upside and minimize your downside through diversification.

Before signing up for The Motley Fool’s paid service, make sure you have the capital available to spread across multiple stocks that you plan to hold for over five years.

Investing Style

As noted above, The Motley Fool’s investment strategy is focused on finding stocks that will outperform the market over the long term, mitigating risk through diversification.

If you want to make the most of the service, make sure this strategy is in line with your own investment style.

Motley Fool Investing Style

For example, if you prefer to simply hold a few ETFs, you won’t get as much value out of the service. If you are interested in building a diverse, long-term portfolio of individual stocks, you will get a lot of value out of the service.

Risk Tolerance

Last but not least, it’s important to consider your risk tolerance.

As mentioned above, The Motley Fool’s stock picks are long-term investments, and they are not all winners.

The portfolio performs well as a whole over time.

If your goal is to beat the stock market (S&P 500), you should understand the relationship between risk and reward.

Generally, investment can be classified as “high risk, high reward,” or “low-risk, low reward.” You will rarely find an investment that is “low risk, high reward.”

Individual stock picks are riskier than broad market investments and may experience drops. This is part of investing, and many of these fluctuations are simply “noise” when you look at longer timeframes.

Take a popular stock like Netflix (NFLX) as an example.

  • Over the past year, the stock is up over 75%
  • Over the past ten years, the stock is up over 790%
  • Since the company’s IPO, the stock is up a whopping 37,100%

That said, Netflix’s stock was down over 50% in 2004, down over 60% in 2011, and down over 50% in 2022.

The investors who did best with Netflix weathered the storms during the down years and were rewarded handsomely over time.

If you plan to invest in individual stocks, be prepared to deal with some downside along the way. As a reminder, these are long-term picks.

Is The Motley Fool Worth It? Final Verdict

The Motley Fool’s premium stock picking services (Stock Advisor in particular) are absolutely worth it.

New Member Special

Get Stock Advisor for Only $99 for Your First Year

(regularly $199)

You won’t find many (if any) competing stock picking services with similar performance records at comparable prices.

Read our in-depth reviews of Motley Fool services below to learn more:

Day Trade Review

Dave

Dave has been a part-time day trader and swing trader since 2011 when he first became obsessed with the markets. He focuses primarily on technical setups and will hold positions anywhere from a few minutes to a few days. Over his trading career, Dave has tried numerous day trading products, brokers, services, and courses. He continues to test and review new day trading services to this day.

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