Motley Fool Review
Quality of Research
Quality of Stock Picks
In this Motley Fool review, we do an in-depth analysis of the Stock Advisor service. The Motley Fool is arguably one of the most well-known online stock advisor programs. The company has been around for over 25 years and remains one of the most trusted names in the industry. The question is – should you shell out your hard-earned cash for their research?
- About Motley Fool
- History of The Motley Fool
- What is The Stock Advisor Program?
- What Do Stock Advisor Members Get?
- What is Motley Fool’s Investment Style?
- Motley Fool Stock Picks
- How Much Does Motley Fool Cost?
- Is Motley Fool Trustworthy?
- What Type of Investor is Motley Fool Best For?
- Common Questions About the Stock Advisor Program
- How Does the Stock Advisor service differ from other Motley Fool services?
- How Much Time Do I Need to Commit to Use the Service?
- What is Motley Fool’s Double Down Stock?
- Is the Motley Fool Reliable?
- Can You Reveal Motley Fool’s Recent Stock Picks?
- Is the Stock Advisor Program good for new investors?
- How does the Motley Fool compare to other stock-picking services?
- Is the Motley Fool a Pump and Dump?
- Is Motley Fool Worth It?
About Motley Fool
The Motley Fool Stock Advisor is the flagship stock-picking newsletter published by investment advisory giant The Motley Fool. Our Motley Fool Review will look at the monthly newsletter service that is run by the company’s co-founders, David Gardner and Tom Gardner. The Gardner brothers have been beating the stock market for over ten years using their “foolish” investing strategy. How do they do it?
The Stock Advisor investment service helps investors beat the market by providing them with access to better stock picks. Motley Fool researches investments and offers stock recommendations to its members.
Since the program’s launch in 2002, the Motley Fool’s Stock Advisor recommendations have generated over 300% in returns. These returns are highly impressive when compared to the broader market returns over the same period. Investing in the Fool’s stock picks would have generated over 3X the returns of merely investing in the S&P 500. This means a $10,000 investment would have yielded an extra $30,000. The company’s track record is even more impressive when compared to the performances of mutual funds over the same period.
Of course, we needed to do our research to make sure the Motley Fool was legit. We did an in-depth analysis of the company and its offerings. Want to know whether or not you should pay for a membership? Stay tuned for some revealing insights. We’ve reviewed over 200 financial services, and this one was very interesting.
Our Motley Fool review will help you determine if the Stock Advisor program is a good fit for you.
History of The Motley Fool
Before we get to the results of our review, it can help to understand the company’s history. If you’re anything like me, you like to know who you are trusting for investment advice. I want to know that I am getting advice from advisers that are credible and have a proven track record.
Motley Fool isn’t just another “pop-up” investing service that you see advertised on your Facebook newsfeed or advertised on a financial news site. The company and its founders have a rich history.
The Motley Fool was founded in 1993 by Tom and David Gardner. The Gardner brothers shared their investment ideas on message boards and online publications.
They used a unique blend of humor and humility to showcase the research they used to discover undervalued stocks. Their refreshing approach to investing helped them grow a community of like-minded followers (aka “fools”).
The Fool’s goal was and is to empower retail investors to outperform Wall Street analysts and professionals.
Here’s a video that explains the company’s mission and values:
In 1997, the company launched its official investing site at fool.com.
The team continued to expand its offerings. The Gardner brothers published many New York Times Bestsellers, syndicated newspapers, radio shows, and live podcasts.
Money management and investing services were launched, including “Real Money Portfolio,” which enabled subscribers to track the trades of real-money portfolios and in-house mutual funds managed by the firm. The Gardner brothers brought a refreshing element of transparency to the finance industry, and Motley Fool quickly became a leader in investing and personal finance.
All of this goes to show that the Motley Fool is a well-established investment research company with proven results.
We’ve reviewed many of the company’s premium services, and we still believe the Stock Advisor program is the best offering. Continue reading our review to see why.
What is The Stock Advisor Program?
The Stock Advisor program is a simple program that offers stock picks to members. There are no fancy pitches or complicated schemes. You get stock picks that are expected to outperform the market – simple as that.
The program’s founders, Tom and David Gardner, wanted to make it super easy for beginner investors to achieve the same returns as Wall Street fat cats.
The goal of the program is simple: help average investors beat the market by providing them with the best research reports and stock recommendations.
What Do Stock Advisor Members Get?
Stock Advisor members get access to two new stock picks every month. Every recommendation comes with an in-depth research report that explains the rationale behind the endorsement.
Members also have access to a record of every recommendation the company has ever made. The information is laid out clearly in a table so members can see how past recommendations have performed.
Motley Fool offers full transparency by showing its track record of both winning and losing investments.
Members can comb through the list of previous recommendations to find stock picks that are still relevant today. This is a great way to get more value out of the membership if you are looking for more than two investment ideas every month. I’ve personally found some great investment opportunities by reviewing historical picks.
I’ll be honest, the main reason I pay $99/year for the service (without thinking twice), is the stock recommendations. There are a few other benefits of being a member, but first, let’s discuss whether or not the Fool’s offering is right for you.
Investment advice is only useful if it is in line with your personal investment goals. We all want to make money, but we have different strategies at different points in our lives.
Keep reading our review to see if the Stock Advisor program is right for you personally.
What is Motley Fool’s Investment Style?
The Stock Advisor newsletter is a long-term, buy-and-hold service catering to investors with a long-term outlook. The stock recommendations are based on the analysis of companies, management teams, industries, and more.
Members get stock recommendations from Tom and David Gardner (who have slightly different investment strategies). Both of the Gardner brothers beat the S&P 500, but David Gardner’s picks have considerably higher returns. Here are the average returns:
- Tom Gardner: 229.1%
- David Gardner: 744.7%
- S&P 500 (for comparison): 102.5%
Both brothers publish reports in a similar format. Each report explains why the stock was recommended, the best price to buy at, and when you should consider selling.
The research explains why the recommendation was made and how the stock stands out from its peers. The company also lists the potential risks that would warrant selling the position.
The research is excellent, and the track record speaks for itself.
Wondering if these stock tips align with your investment strategy?
Here is the investment profile that the Stock Advisor program is best for:
- Long-term investors (buy and hold for 2-5+ years)
- Investors who prefer individual stocks to mutual funds
- Investors looking to beat the market
- Investors who want to add new equities to their portfolios monthly or annually
The service is an excellent fit for anyone who wants to rely on proven investment advice to beat the market.
Motley Fool Stock Picks
We’ve had a lot of people reach out and ask us to reveal some of the specific stock picks since our initial Motley Fool review. In fairness to the company and the paying subscribers, we can’t release any of the recent stock picks, but we can share some of the recommendations from the past.
To date, subscribers have received hundreds of recommendations (two per month). These can best be categorized into three different types of recommendations based on how the stocks performed from the date of the recommendation.
- “Home Run” Picks
- “Beat the Market” Stocks
What we are dubbing “home run picks” are the stocks that have provided phenomenal returns. These are the recommendations that had the potential to provide life-changing returns. Here are some examples of stocks that provided returns exceptional returns (6,000% – 25,000%):
There are a handful of picks that have achieved these types of results, but you should be realistic in your expectations. If you get one of these every 1-2 years, your portfolio will be in excellent shape.
The more common group of stock picks is what we’ve dubbed “beat the market stocks.” These are the bread-and-butter of the service. These are the stocks that outperform the market by a considerable margin and make for a well-diversified portfolio. Here are some examples from 2018:
All of these stocks have impressive returns and have outperformed the S&P 500 by a considerable margin. These investments would beat most mutual funds and ETF’s, which is one of the main reasons I’ve been using Motley Fool’s Stock Advisor program for so long.
Of course, not every recommendation is a winner, but the winning picks far outnumber the losing picks. Of course, you should have some type of “risk management” plan in place when you buy any stock. While it’s pretty easy to simply follow the Fool’s alerts, you should have a contingency plan in the event you invest in a stock that turns against you. For example, I personally like to cut my losses when I’m down 10% on a position (I can always repurchase the shares later if the stock looks bullish again). Conservative investors may cut losses at 5% whereas investors who can stomach more risk may wait until 20-30%. It’s really up to your personal preferences, but you should always have some type of plan to mitigate risk. This allows you to maximize the upside potential while limiting the downside potential.
How Much Does Motley Fool Cost?
The Motley Fool Stock Advisor subscription costs $199 per year. The subscription is currently on sale, and a yearly prepaid plan is available for $99. The annual subscription is backed by a 30-day money-back guarantee.
The monthly membership is available for $19-per month with no money-back guarantee. There’s almost no reason to choose a monthly subscription over the annual subscription. The yearly subscription is a way better value.
Membership provides instant access to:
- Two new monthly stock picks from David and Tom Gardner
- The 10 “best buys now” stock list
- The “10 starter stocks for new portfolios” stock list
- Access to the members-only community which allows community members to collaborate and connect with advisors
- Full-access to the investment library which includes an archive of stock reports
Motley Fool Review – More Stock Advisor Benefits
Most subscribers sign up specifically for the stock picks. It’s a strong value proposition. For less than $10/month (with an annual subscription), you can get access to stock market picks that have the potential to return 100x your subscription cost. Better yet, these stocks outperform the market and help investors avoid mutual fund fees.
I believe the stock picks alone make the subscription worth it, but membership comes with a few additional benefits.
The members’ area provides access to some top-quality investment education. Education is valuable for investors who want to learn more about personal finance and investing. Investors can learn about new strategies and investment styles.
Stock Management and Alerts
Members can create a portfolio of stocks, similar to a watch list. They can analyze the performance of the stocks and receive price alerts. The functionality here is simple, but it’s an excellent addition to the members’ area.
You can add your favorite ticker symbols or add stocks to your “Favorites” after reading a research report.
Stock Advisor Community
Community members have access to an online discussion board where they can discuss topics ranging from personal finance to the stock market. I was expecting this area to be relatively quiet, as I’ve seen many failed attempts to create message boards. I was pleasantly surprised to see that the discussion boards have a decent amount of activity. They are not as active as InvestorsHub and other similar sites, but there are a handful of exciting conversations.
Motley Fool Special Reports
The Stock Advisor program delivers a couple of stock recommendations every month. On top of that, the team will also issue special reports when there are unique opportunities in the market.
You’ve probably seen ads for Motley Fool’s double down stock (or something similar). These reports are available to members of the Stock Advisor program. I really liked the fact that Motley Fool capitalized on short-term market trends. When there is a hot sector, it’s important to be “in the know” early, and the research reports give you early access to important information.
Is Motley Fool Trustworthy?
By this point in the Stock Advisor review, you should understand what the membership offers. The next obvious question is, “is the Motley Fool legit?”
The company is known for its bold marketing on social media and news sites, but do they deliver on what they promise?
We put them to the test with our rigorous screening process.
Here are a few things we took into consideration:
The Fool’s Track Record
The first point we analyzed during our Motley Fool review was the company’s track record. Past performance is the most important metric to look at when examining any investment research firm. We wanted to see if the team delivered on their promise to outperform the market.
We are happy to report that the Motley Fool Stock Advisor program has an incredibly impressive track record. Motley Fool’s portfolio has been beating the S&P 500 since 2002. We spoke to a few investors who have been using the service for years and have achieved excellent results.
You can find a record of the Fool’s performance on the chart below:
As you can see, The Stock Advisor program beats the returns of the S&P 500 by identifying stocks and sectors that are outperforming. This performance is no small feat. An investment of $10,000 in 2002 would have returned an extra $100,000 if invested in the program’s stock picks.
This chart isn’t just for marketing purposes. Members can access the details of every stock pick and verify the performance of the program. Here are some interesting highlights from previous picks:
- Over 100 stock picks have returned 100% or more
- The Amazon recommendation is up over 17,000%
- The Disney Recommendation is up over 6,000%
- The Netflix Recommendation is up over 19,000%
Of course, returns of 10x+ are the outliers, and we wanted to take a look at the company’s overall performance. This leads to our review of the program’s transparency.
The members’ area includes a record of every stock pick the company has ever made. The list includes stock recommendations, the rationale behind the recommendations, and the performance of the recommendations. You can navigate to the “Performance” page of the members’ area to see every single stock recommendation since 2002 from both Tom and David Gardner.
You can view a data table that includes:
- The stock recommendation
- The recommendation date
- The risk score for the recommendation
- The recommended buy price
- The returns of the stock
- The returns of the stock relative to the returns of the S&P 500
In the spirit of full transparency, this list includes both winners and losers. Since its inception, here are the returns:
- Tom Gardner: 229.1%
- David Gardner: 744.7%
- S&P 500 (for comparison): 102.5%
Motley Fool outperforms the market (with David’s picks returning exceptional gains).
The authors will also add a disclaimer if anyone involved currently holds a position in the stock they are recommending.
Furthermore, the team will issue reports and alerts when it is time to sell a stock.
Quality of Investment Research
Motley Fool isn’t some “pump and dump” scheme making manipulative stock recommendations. The company’s reputation depends on its performance, so the research needs to be top-notch. Tom and David Gardner have been in this industry for decades, and they have a stellar reputation.
The research reports are thorough and unbiased. The reports don’t merely “hype” a stock; they present the full story. The reports include information on the companies’ performance, sector performance, upcoming catalysts, and the risk level of the recommendation. The reports even address counterarguments to the Fool’s judgment on the stock.
Some of the reports make recommendations for stocks you may be familiar with (such as FANG stocks that have been outperforming the market recently), while others uncover hidden gems. The reports are well-researched and thorough.
What Type of Investor is Motley Fool Best For?
Motley Fool’s Stock Advisor is best suited for long-term investors who want to invest in individual stocks that will beat the market. Short-term investors and swing traders may also benefit from the monthly stock alerts.
Overall, the service is straightforward. It is appropriate for both new investors and experienced investors (especially those who want their research done for them). Motley Fool does a great job of identifying unique investment opportunities and providing high-quality research reports.
Most investors (both new and experienced) are looking for great stock picks and investment ideas, and that is precisely what you get when you sign up for a subscription.
Is the Stock Advisor Program a Good Value?
As part of our Motley Fool review, we wanted to discuss the value of the program. Many investment advisers offer great stock ideas at a premium. We’ve reviewed services that cost as much as $5,000/year. So, is Motley Fool worth the money?
At $99, it’s hard to go wrong with Motley Fool’s Stock Advisor. The investment research is high-quality, and you can recoup your subscription fee with a single good trade. Subscribers get instant access to a wealth of resources that will help them achieve better returns.
We highly recommend choosing the annual plan over the monthly subscription due to the price difference ($99/year vs. $19/month). Every month, Tom and David Gardner continue to put out high-quality research reports packed with compelling ideas. Overall, this is a great service and great value. Plus, the subscription comes with a guarantee so you can get your money back if you are unhappy.
Stock Advisor vs. Rule Breakers
We’ve had a few readers ask about Motley Fool’s other offerings.
The company offers a handful of premium investment services, but the two most popular are Stock Advisor and Rule Breakers. Anyone researching the best stock picking services is likely to narrow their decision down to these two options.
The Stock Advisor program is the flagship offering. The Stock Advisor program has been around longer than Rule Breakers, and it seems the be the primary focus of the company’s marketing. If you want to simplify your decision, choose the Stock Advisor program.
Both programs have very similar offerings, and the members’ areas are almost identical. The main difference between the plans is the type of stock picks. Stock Advisor makes stock recommendations using the Fool’s core investment methodology.
Rule Breakers utilizes an investment methodology that is primarily focused on finding high-growth companies. The program, which only offers stock picks from David Gardner, is a bit more specialized. The picks are explicitly chosen with business growth in mind. You can read our full Rule Breakers review for more details, but our recommendation is simple.
If you’re new to investing and only going to choose one program, select the Stock Advisor. The Stock Advisor will help you build your portfolio with stocks that are expected to beat the market. If you already have a starter portfolio and you’re looking to diversify, join the Rule Breakers program.
The programs work very well together, especially for investors who are looking to build a portfolio with more than a few hot stock picks. There’s almost no overlap in stock recommendations between the programs.
Rule Breakers can help you diversify with growth investments.
Common Questions About the Stock Advisor Program
How Does the Stock Advisor service differ from other Motley Fool services?
During our review of The Motley Fool, we analyzed a few of their investment programs. The Stock Advisor program is the flagship offering. The stock picks provided by this advisory service are chosen using the investing methodology that made the Fool famous.
The team offers a range of other subscriptions that utilize different methodologies. For example, “Rule Your Retirement” is focused on safer stocks that may be ideal for retirees, whereas “Rule Breakers” focuses on riskier growth stocks that are best for longer-term “buy and hold” investors.
How Much Time Do I Need to Commit to Use the Service?
The goal of the Stock Advisor program is to simplify your investing strategy. The company claims that you only need to commit 5 minutes each month to tune up your portfolio (i.e., invest in new picks, take profits, and cut losses when applicable). Personally, I spend a bit more time because I like to be hands-on with my investing. I usually spend about 30-60 minutes analyzing each new report, doing my own research, and adjusting my portfolio accordingly.
What is Motley Fool’s Double Down Stock?
We cannot give this answer away since Motley Fool’s double down stock pick is available for paying members. What we can say is this – don’t get caught up in the hype. The Stock Adviser program offers a ton of great stock picks every year. As a member, you will get instant access to a wealth of resources that will help improve your investment returns.
You may see advertisements for double down stocks, triple down stocks, ultimate buy alerts, mini Berkshire, and more. While these ads may seem enticing, you do not need to sign up for a single stock pick. The company has provided excellent stock picks for almost two decades. There will be plenty of opportunities for members.
Is the Motley Fool Reliable?
The Motley Fool is one of the few investment advisory services that has been around for almost two decades. They’ve adapted to all types of market trends. The company has weathered both bear and bull markets and continues to generate phenomenal returns.
The results speak for themselves.
The Gardner brothers don’t just have a few lucky picks. They have a history of providing stock picks that beat the market. Their reputation depends on their ability to provide great stock picks, and that’s exactly what they’ve been doing.
Can You Reveal Motley Fool’s Recent Stock Picks?
We must respect the fact that Motley Fool’s Stock Advisor program is a premium offering. If we gave away the stock picks, we would be doing a disservice to the hard-working team that compiles the research. It’s also important to note that the stock picks change monthly. As a member, you will have access to a history of all of the previous stock picks as well as two fresh investment ideas every month.
Is the Stock Advisor Program good for new investors?
Absolutely! This is one of the most beginner-friendly investment advisory services out there.
The analysts and authors who compile the reports make sure all of the information is easy to understand. If you are new to investing, this service is particularly beneficial because it helps you start building your portfolio the right way. Many new investors who go at it alone end up making costly mistakes. Getting the proper guidance from the start can have huge returns.
How does the Motley Fool compare to other stock-picking services?
We’ve reviewed over 100 financial services, many of which offer investment advice and stock tips. For the price, Motley Fool cannot be beaten. Here are the main reasons why:
- You can’t beat the price. Most competing services charge at least three times the amount of the Stock Advisor Program.
- The Stock Advisor Program is time tested. Many newer advisories haven’t been verified by bear markets and changing market conditions. The Gardner Brothers have been delivering exceptional stock picks for over 25 years, meaning their strategy is time-tested and proven to work.
- The program is easy to follow. The Stock Advisor program is simple and easy to follow. You get told which stocks to buy and sell – simple as that. Other programs can get far more complicated.
Watch David Gardner explain a few of the ways the program stands out:
Of course, you need to make sure stock investments are appropriate for your investment strategy. Stocks are inherently riskier than some alternative investments. It wouldn’t be fair to compare a stock recommendation service to a financial advisor that specializes in mutual funds and annuities. If you’re looking for stock recommendations, Motley Fool is the best in their class.
Is the Motley Fool a Pump and Dump?
Absolutely not! Pump and dumps occur when a stock’s promotion leads to abnormal buying activity that is followed by a massive sell-off. These schemes are best orchestrated on small, and micro-cap companies since their volume levels make them easier to manipulate.
The stocks that Motley Fool recommends are nearly impossible to “pump.” Take a pick like “Amazon,” for example. There is almost no way that a newsletter recommendation could even have an impact on the stock since the volume is so high. Even if every Fool subscriber bought at the same time, it would hardly affect the stock’s price.
Is Motley Fool Worth It?
The main question you’re probably asking at this point is, “should I sign up?” If you’re looking for a service that recommends hot stocks, it’s hard to find a program better than Motley Fool’s Stock Advisor. At only $99/year, the membership is definitely worth the money. You can quickly recoup the subscription cost from a single investment in one of the stock picks.
- A solid history of consistent performance and research format
- Moderated members-only message boards have intelligent posts without spam
- Fundamental investors gain the most from the content and presentation of bullish and bearish components of the monthly picks
- Analysts update recommendation changes on their picks
- A great introduction to portfolio building and investment research
- Great service with a great track record
- The non-stop flow of upsells to product offerings can get overwhelming
- Technical traders may not find the content timely or actionable
If our Motley Fool Stock Advisor review didn’t cover any information you were expecting, don’t hesitate to reach out to us directly. Feel free to leave a comment below or reach out via the contact page.