The Bottom Line: Are you interested in a stock picking service newsletter that’s produced an average return of 392% on each recommended stock? If you are, the Motley Fool Stock Advisor may be the stock-picking service you’ve been waiting for. Apart from its track record, the service comes with a very affordable annual flat fee, making it a good fit even for smaller investors.
The Motley Fool has become one of the most respected and often quoted investment news services in the industry.
You may want cutting edge financial information, but there’s something else most investors want even more – a strategy that enables outperforming the market, not just keeping up with it.
If that describes you, you’ll want to learn more about the Motley Fool Stock Advisor.
It goes well beyond major financial news information and analysis, and provides specific stock recommendations it deems likely to outperform the general market in the coming years.
Service: Monthly Stock Picks
Promotion: 30 Day Money Back Guarantee
What is Motley Fool?
Founded in 1993, and based in Alexandria, Virginia, Motley Fool is a multimedia financial services company providing financial advice for investors and institutions.
The company was founded by brothers David and Tom Gardner, and has more than 300 employees.
Motley Fool provides financial news and analysis on its website, and the company is widely quoted by other financial news sources. It has grown to become one of the top investment advisory firms in the industry.
The company also offers stock-picking services, of which the Motley Fool Stock Advisor newsletter service is considered to be its flagship product.
What is Motley Fool Stock Advisor?
Motley Fool claims that the average stock pick recommended by Stock Advisors has returned an incredible 392%. Since it began in 2002, the company claims it’s outperformed the general stock market by a wide margin.
When you sign up for the service, you’ll receive several new stock picks every month, directly from founders Tom and David Gardner. (Each provides at least one stock pick each month.)
The company cites examples of stocks recommended in 2002 – including Booking.com, Walt Disney, Amazon, and Netflix - which if you had invested $1,000 in each when recommended would see your portfolio worth more than $400,000 today.
The company reports returns on each of the four stocks to be as follows (please keep in mind these are highly exceptional examples, and many times higher than returns on more typical recommendations):
(In verifying the above results, from the middle of 2002 until today, we found some to be higher, and some to be lower, but that’s to be expected with timing differences. Please do your own research to verify results past recommendations before acting on any new ones!)
Now to be fair, two of the stocks – Amazon and Netflix – are part of the so-called FAANG stocks, that are held in just about every portfolio on Wall Street.
But those are usually included in the many index-based ETFs investment managers put their client’s money into.
In the case of Motley Fool Stock Advisor, these are individually recommended stocks that would’ve provided much higher returns if they were owned directly.
That kind of return – along with the Motley Fool’s well-deserved reputation – is the reason why the service is now being used by more than 600,000 active members.
As we would hope, Motley Fool recommends you spread your investment across a dozen or more stocks, and also have safe investments in your portfolio.
Motley Fool Stock Advisor Products & Services
Motley Fool Stock Advisor newsletter service is offered at $199 per year. However, they are currently offering the program at a reduced rate of $99 per year, including a 30-day membership-fee-back guarantee, to give you an opportunity to look over the service.
There’s no indication if the $99 annual fee is offered only in the first year, or if it’s the ongoing subscription price for enrolled members.
They also offer a monthly subscription rate, at $19 per month. This works out to be $228 per year, which is even higher than the indicated base rate of $199.
But if the service works even close to what is claimed, paying $99 upfront will be well worth the money spent, even if it does rise to $199 in subsequent years.
When you sign up for the service, you’ll enjoy the following features:
Continuous up-to-the moment stock analysis.
This includes a Buy Case, writing down why a stock is a buying opportunity and why the stock belongs in your portfolio.
A Risk Profile includes the Motley Fool’s widely recognized risk rating system to explain the upside and downside of each stock recommendation.
Finally, they offer 24/7 Monitoring that will keep you continuously updated on stock picks, including recommendations on when to sell.
Monthly stock recommendations.
This is the main benefit of the service. Each month, you’re receive new stock recommendations. You’ll also get special reports on unique opportunities.
In this way, you don’t have to worry if you missed out on previous recommendations – there will always be a steady stream of new ones coming down the road.
Stock management and alerts.
As a member of the service, you create your own portfolio, which will give you the ability to track developments related to the individual companies.
You’ll receive alerts highlighting major price moves, as well as buy and sell recommendations.
Stock Advisor community.
This is a member’s forum, where you can discuss investment strategies and opportunities with other investors.
Available by phone and email, 9:30 AM to 4:00 PM, Eastern time, Monday through Friday.
What's The Investment Strategy?
The Motley Fool Stock Advisor is based on the fundamentals of the companies behind the stocks chosen. It’s designed for investors who fall into the long-term, buy-and-hold category.
It’s generally recommended that it will take several years for any given stock pick to provide expected returns. For this reason, the newsletter isn’t recommended for short-term investors or for day traders.
The newsletter uses a position/counter-position type of analysis, in which a positive recommendation is accompanied by a counter-position not to buy.
That gives the investor both sides of the argument on a given stock.
The service will do a thorough analysis of the fundamentals of the company, including looking for those that are undervalued compared to their peers.
But they’ll also take into consideration various qualitative factors with the company, including macroeconomic developments affecting the company as well as the launch of new product lines.
Macroeconomic developments can include changes in interest rates or trade policy, and how it will affect a company, either negatively or positively. Naturally, they’ll favor companies likely to profit from big picture trends.
Recommendations even include the risks involved in each stock, as well as recommendations on when to sell.
This feature is important because investors are often recommended to buy certain stocks, but far less guidance is given on when to sell, if any is given at all.
The newsletter won’t tell you exactly when to sell, but rather what circumstances would trigger a sale. It’s always up to the investor to make the choice as to when the to buy and sell any particular recommendation.
There’s an important caveat with the Motley Fool Stock Advisor, and that’s that it should be used only as a starting point for your investments.
The service may make a recommendation, but it’s ultimately up to you to do further research and decide for yourself if a particular recommendation is a good fit in your portfolio and within the scope of your own personal investment style.
Motley Fool Stock Advisor Reviews & Testimonials
The Better Business Bureau doesn’t rate the Motley Fool Stock Advisor individually, since it’s part of the Motley Fool organization.
But it does give Motley Fool a rating of “B” (on a scale of A+ to F).
The same situation exists with Trustpilot, with Motley Fool rated, but not the advisory service in particular.
Trustpilot has given Motley Fool a rating of one star out of five, based on 128 reviews.
“Motley Fool's changed my life in this main respect: I'm financially independent today. I didn't think that would be possible until maybe my mid or late 60s. I have the ability to make choices and quality-of-life decisions now that I would never be able to make before.”
Mark T., Des Moines, Iowa
Who is Motley Fool Stock Advisor Good For?
The Motley Fool Stock Advisor newsletter service is best suited for investors who prefer to invest in individual stocks with substantial upside potential.
It’s a stock-picking service, and not to be confused with the growing number of robo-advisors. Robo-advisors create and manage your portfolio for you, with allocations invested in exchange traded funds in a mix of equities and fixed income investments, based on your predetermined risk tolerance.
They work to match the underlying indexes the portfolios are tied to. That means that while they don’t outperform the market, they don’t underperform it either. In general, it’s a more conservative investment strategy.
Motley Fool Stock Advisor will work best for aggressive investors who are looking to outperform the market.
Investment recommendations will be stocks, and not fixed income securities. No effort is maintained to create a balanced portfolio, as that is not the purpose of the service.
If you’re looking primarily for a blend of growth with capital preservation, Motley Fool Stock Advisor is not for you. You’ll be better suited with some sort of managed portfolio option, like a robo-advisor or a traditional human investment advisor.
Also be aware that the advisor is not suitable for day traders, as stock recommendations are long-term holds.
You can certainly use Motley Fool Stock Advisor to construct the stock side of your portfolio, while maintaining other assets in safe, income generating securities, like bonds and certificates of deposit.
However, given that the stock picks made by the Motley Fool Stock Advisor outperform the S&P 500 index by a roughly 4 to 1 margin, this is definitely a service you’ll want to sign up for if you’re looking for higher returns.
Just be aware of the risk you’re taking on. Motley Fool offers no implication of guaranteed returns, or that you won’t lose money.
They only promise to let you participate in a stock picking service that has provided outstanding returns for the past 17 years.
Pros & Cons
- Opportunity to outperform the market, not just match it.
- You’ll get new stock picks each and every month.
- The Stock Advisor provides recommendations on when to sell a stock, as well as when to buy. This is a departure from competing stock-picking services, that tend to focus exclusively on what to buy and when.
- Once you sign up for the service, you’ll have 30 days to cancel and receive a full refund of your annual subscription price.
- You’ll be getting stock recommendations from a well-established investment service, rather than from the latest investment guru du jour – whom you may never have heard of.
- If you decide you want to cancel your subscription after the 30-day money back guarantee, you won’t be entitled to a prorated refund. Make sure you’re completely satisfied with the service within that 30-day window.
- Customer service is available on a very limited basis, which will be difficult for anyone unable to make contact during regular business hours.
- The service is not designed for short-term traders or day-traders.
Motley Fool Stock Advisor
Motley Fool Stock Advisor may be the stock-picking service you’ve been waiting for. Apart from its track record, the service comes with a very affordable annual flat fee, making it a good fit even for smaller investors.
How to Get Started
To sign up for the Motley Fool Stock Advisor will need to provide the following information:
- Your full name
- Billing address
- Phone number
- Email address
- Credit card number and expiration date
They accept Visa, MasterCard, American Express and Discover cards. Unfortunately, they also collect sales tax for residents of nearly half the states in the country.
Once you sign up for the service, you’ll have immediate access to the following:
Is Motley Fool Stock Advisor Worth the Investment?
The decision to use the Motley Fool Stock Advisor newsletter service depends entirely on your investment goals.
If you have a higher than average risk tolerance, and you want your stock portfolio to outperform the general market, the service is definitely worth a try.
For an annual fee of $99 – or even $199 – the performance of the service justifies the fee many times over. In fact, it’s a very small fee to pay for the quality of advice you’ll be receiving.
The service will work best for those who are young and have long time horizons, or anyone who has a more aggressive approach to investing.
It can also be a valuable addition if you already have a large investment portfolio, and are looking to allocate a small portion toward more aggressive investing.
A 10% or 20% allocation into stocks recommended by the Motley Fool Stock Advisor has the potential to substantially improve the performance of your stock portfolio.
But with the recent instability in the market – 600 points down in one day, then 500 points up in the following week – we may be moving from a general bull market in stocks, to one better suited to picking individual stocks.
Due to the unique nature of the Motley Fool Stock Advisor we can’t make a general recommendation to all investors, certainly not those who are of a more conservative persuasion.
But if you fit the investor profile described above, the Motley Fool Stock Advisor is certainly worth a try, at least with a small portion of your portfolio.
If you’d like more information, or if you’d like to sign up for the stock-picking service, visit the Motley Fool Stock Advisor website.
This is definitely one of the most interesting services available to the average investor, and a real chance to outperform the market, and not just to match it.
Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry. He and his wife are “empty nesters” living in New Hampshire.