Knowing what to do with your money is a huge stress for so many people and investing in stocks is so much more so. The stock market is a confusing and confounding beast that takes years to understand and decades to master.
As a hard-working individual with no experience in stock trading or economics, you want to make sure your money is going as far as it can so that you can get the most for your dollar.
The Motley Fool was founded in 1993 by the brothers, Tom and David Gardner, and has prided itself on bringing digestible financial knowledge and advice to the everyday consumer so they can achieve financial freedom through their website, podcasts, news column, and subscriptions. Their website attests that their stock-picking service has outpaced the S&P 500, beating it out for almost 20 years.
For their huge size, however, it’s important to know who you’re trusting your money to. Their size, branding, and marketing talk a big talk, but do their advisors offer a credible track record?
Everyone invests their money differently. You must choose the option that’s best for you since it is such a personal endeavor. Only you can take the best care of your assets because it’s personal to you and no one else.
The Motley Fool has a variety of free options available, as well as a handful of paid subscription platforms with tiers aimed at either consumer investment or business investment. Their subscriptions are offered individually but group subscriptions are available as well.
How Does Motley Fool Work?
Motley Fool has been around for almost 30 years at this point, and they have developed a tried and true method for their investment strategy. While many customers take their suggestions at face value and simply look to learn which stocks to buy and when others prefer a little more insight. Motley Fool makes both available, and before you decide to subscribe to their program, it might be good to know what you’re truly paying for.
The company takes in a broad set of factors to their investments. They look at a combination of overall market factors, trends in individual sectors, and last the performance of the individual company. They put significant research into their stock options and their team ranks stocks based on their value and momentum. What they’re specifically looking for are companies that are currently undervalued that show positive growth trends and a high probability for growth.
Their strategy is based on allowing people to invest early in companies to take the best advantage of undervalued stocks so they benefit from their large growth leaps.
The foundational principle of their investment strategy is long-term, however. While occasionally their picks achieve short term leaps in growth, which create large profits very quickly, they recommend a buy-and-hold strategy. After all, buy-low and sell-high are essential principles in stock investing. The occasional short term spike does occur, but don’t count on it as a regular facet of your investment strategy.
The Motley Fool will also release alerts on good times to sell stocks. This is a corrective measure for the instances that their chooses don’t play out to their high expectations. It allows their subscribers to make back some of the money they invested so that it can be reinvested into better performing companies.
Stocks are incredibly unpredictable and The Motley Fool can only predict the market’s trends. That means not all of their choices will be winners. Their portfolios have outperformed the S&P, and the founders will tell you that their picks that do grow will perform well enough to off-set and out-perform the losses from their bad picks.
Despite the aggressive and dubious marketing practices the company has taken on as of late, there is no question to their legitimacy. They play into the hype probably more than they should, but their reputation and portfolio performances do precede them.
Motley Fool: Free Options
Aside from the paid subscriptions, The Motley Fool offers free services that are already available to you. Their website has a constant series of articles that offer market news and updates, as well as some suggestions (though not nearly to the same extent as their paid services, naturally). You can get a good amount of general purpose stock and investing news just by visiting their homepage; however, it likely won’t help you curate a stock portfolio by itself.
The Motley Fool has a series of podcasts, available on multiple platforms, that go over in-depth market news and analysis to help you have a better understanding of your investing. Their podcasts are a fantastic resource, especially since they won’t cost you anything for the knowledge they provide.
Motley Fool Money
Motley Fool Money is their weekly radio show (also available as a podcast) that explores weekly financial news. It is an hour-long segment presented through guest interviews from a wide selection of backgrounds. It’s been on the radio for over a decade now and presents information in a fun fashion.
Industry Focus
Industry Focus is a daily podcast that does a deep dive into specific industries, exploring their trends and individual stock performances. Industries they cover range from healthcare, consumer goods, energy, and tech. They have individual hosts for each industry, so the analysts discussing the topics have unique specialization in their given sector. Episodes are varied from news and earnings but will also do an in-depth analysis of overarching trends or individual companies.
Market Foolery
Market Foolery is another daily podcast, comprised of short episodes that cover daily business news and current events. It’s a shorter-form podcast meant to keep you up to date while you’re on the go.
Motley Fool: Paid Subscriptions
Motley Fool’s paid options are primarily stock investing tips, but they offer additional services for retirement or portfolio management. The 2 most popular options of theirs are Stock Advisor and Rule Breakers, though they do offer other options as well that range from broad knowledge, like retirement advice, or the highly specific like their line of Extreme Opportunities newsletters.
These are by no means inexpensive options, which is why you should do extensive research before making your decision whether to subscribe to their program or not. Your individual investing strategy is the key determining factor as to whether it’s worth it to you to invest. Regardless, it will offer additional insight and encourage you to make investments you wouldn’t otherwise consider, even if it is costly.
Stock Advisor
$199 per year
Motley Fool Stock Advisor is their flagship service, which began as a newsletter they sent out to their close friends and family in the early 1990s before switching to an AOL platform when it started to gain traction. Its current form was launched in 2002 and by their calculations, they have generated over 300% return on their investments (compare that to about a 90% return for the S&P alone).
It cost $199 per year, though its first year is discounted at $99 before increasing every year after. It offers a 30-day risk-free trial with a full refund available.
Every month, subscribers get 2 new stock picks and have access to a list of every recommendation the company has made. Stock Advisor presents its suggestions simply and with humor. It doesn’t have complicated or technical language, targeted primarily to beginner or casual investors who want big returns without the stress. They don’t touch on mutual funds, so this subscription is best for people with an interest in adding new individual stocks and equities to their portfolio.
You’ll receive selections from both founding brothers, Tom and David. David’s stock picks have had a significantly higher return of the two, with an almost 750% return compared to Tom’s 230% return.
The program offers full transparency for its selections so that subscribers can see their track record. Not every selection is a winner, and they’re upfront about that. However, their business model relies on their winners outweighing their losses.
To get the most out of the program, they recommend subscribers use a buy-and-hold strategy. They look out for long-term growth, meaning investors will see the best return when they keep their stock for years as it grows and earns value.
Rule Breakers
$299 per year
Motley Fool’s other stock recommendation subscription is Rule Breakers. It’s a more expensive subscription at a rate of $299 per year that focuses on high-growth stocks. It was launched in 2004 with the intent to outperform the market at every turn.
This platform operates similarly to Stock Advisor, in that it’s a biweekly newsletter with stock recommendations. Subscribers will get 2 stock picks per month, as well as a list of the 5 best stocks for every month. Information is provided alongside charts and discussion boards.
However, Rule Breakers picks stocks that have a significantly higher risk than its Stock Advisor counterpart. Thinking about it, that makes sense given its focus on high-growth stocks. When they do land on a winning stock, it wins big, but they’re fewer and further between than it is for Stock Advisor, which has had more consistency in its picks.
This program is best suited to people who can handle a lot of risk in their investments. If you subscribe to it, keep that in mind. You’re following advice about a much less predictable market segment whose volatility makes the human fallibility of its advisors more apparent, no matter how experienced they are. While it can be a helpful tool and has an impressive record, it’s best when it’s used alongside a strategy to otherwise diversify your portfolio.
Just like with Stock Advisor, Rule Breakers recommendations are best for people who use a long-term, buy-and-hold strategy to investment. It is a service that is intended for a passive take on investing. The Motley Fool team will release alerts when they feel it’s best to sell a stock, like if one of their picks ends up not being the high performer they expected. This helps you recoup and prevent heavy losses when they pick a dud.
Rule Your Retirement
$149 per year
Motley Fool’s Rule Your Retirement newsletter specializes in an investment strategy suitable for both retirees and people nearing retirement. It’s run by Robert Brokamp, who made that his specialty as a certified financial planner. Its newsletter offers a wide array of advice to help you retire while maintaining financial security. It covers topics about retirement planning and debt management, alongside investing strategies and advice on social security.
Unlike Motley Fool’s Stock Advisor and Rule Breakers newsletters, Rule Your Retirement focuses less on stock recommendations as it does overarching strategy guides. Information is presented in articles and guides, and it focuses on both preemptive and reactive strategies. You’ll receive articles that relate to current events and how to adjust accordingly, as well as general knowledge about time-tested retirement strategies.
You’ll have access to several model portfolios to help you keep your portfolio balanced. It will offer suggestions from time to time on mutual funds and exchange-traded funds to make continued investments. Furthermore, its topics cover strategies to put your social security and 401k money to its best use, so that you’ll maximize benefits from both. Other topics range from estate planning to insurance accounts.
Rule Your Retirement provides you with an incredible amount of information and resources to help you make the most of your retirement. While you can access the same information elsewhere online, this resource makes it easily accessible and is backed up by Motley Fool’s quality reputation. It can also be used as a guiding point that you then fact-check and corroborate based on additional research.
It’s a service best provided to people who are either retired or about to be retired. They’ll benefit best from the 2-year subscription package. However, even if you’re still a ways off from retirement, a brief, 1-year subscription can help you set up a long term plan to be fully prepared to retire comfortably, or better yet, to retire early.
Motley Fool: Premium Subscriptions
As from its base 3 subscriptions, Motley Fool offers quite a few premium subscriptions which are predominately aimed at group subscriptions or for businesses that specialize in investing. These exist across a few different schools of thought and pricing begins at $999 per year.
Due to the highly specialized nature, these offerings are not highly publicized. Specific information about how well they perform is limited, but they are a key facet of Motley Fool’s business model and speak to their wide array of expertise.
Discovery
They have a line of newsletters, named Discovery, which tends to focus on up-and-coming stocks, rather than the big names you’ll see in their main subscriptions. The Everlasting Portfolio subscription presents the portfolio held by Tom Gardner, one of the founders and CEO of the company.
Other Discovery newsletters are Cloud Disruptors and Global Partners, which focus on tech and global companies. It has more options with a specific focus on company founders and the decisions they make. Other newsletters have a specific focus on small- and mid-cap stocks and how to perform well in that market.
Supernova
The Supernova line of newsletters presents the investing ideas and portfolios of David Gardner. You’ll have access to his personal line of strategies and investments, while other newsletters are more focused on specific high-performance companies that offer extremely high growth.
Total Income
Their Total Income newsletter offers specific advice on how to earn maximum income through an investment strategy. It informs and advises on the various ways to earn funds, based on 5 income strategies, such as high-yield stocks, dividend growth, low-risk stocks, and bond funds. It even provides information about investing in real estate.
Extreme Opportunities
This is one of the most interesting of their newsletter and advice lines. It will go highly in-depth on specific industries to teach and inform about highly specific market trends, and the best ways to profit from them.
Each topic has an individual subscription with a starting rate of $1999 per year. Topics range from tech-based, with Augmented Reality and Beyond, as well as Artificial Intelligence. Other topics are the Future of Entertainment and Marijuana Masters, which focus on the changing trends in entertainment and the growing marijuana industry.
Is It Worth It For Me?
Investing is a highly personal decision—after all, your livelihood is fully at stake. It’s important to do a significant amount of research into your options and to consider whether their investment strategies align with your comfort levels and if their information is presented in a way that suits you.
One of the key things that set the company apart is the humor and tone they use to present what is otherwise dry information. They lighten up the mood and allow their customers to feel not only more comfortable with the process of investing but make something very intimidating feel very approachable. This makes it a great introduction to the world of stock investing and can help you learn the necessary information to make good ongoing decisions.
The high costs of their subscriptions may make it unfeasible to use their product every year, but they do offer subscription deals and discounts for people who are new subscribers. Trying out their service for a year or two, depending on the nature of their deal, could be incredibly helpful just by teaching you more about market investing. If you consistently invest in their stocks throughout that period, you’ll build a good starter portfolio.
Their base services are designed mostly for people who are either new to investing or who don’t have the time or inclination to be checking stocks all day every day. People live busy lives and unfortunately, investment accounts are something that gets pushed to the background.
The fortunate part of that is stock investing works best as a long-term strategy. While it’s incredibly important to build a good portfolio, it is a decades-long endeavor that only needs strict attention intermittently. If your investment strategy doesn’t include paying for a financial advisor or other services, this might be worth it to you.
What you get out of this program is the ability to take a less hands-on approach while still learning and growing your portfolio. It is not a be-all, end-all subscription platform, and it does try to aggressively market and upsell its services by exaggerating their urgency. Instead, take it at its face value and seriously consider whether it would benefit you.
It’s important to consider all of your options, and other competitors offer similar services that are packaged slightly differently.
Available Alternatives
Motley Fool is by no means the only game in town, and it might be worth it for you to look into some alternatives before making the leap into subscribing to their service. Diversification is a cornerstone of a quality investment strategy and having multiple opinions is a good idea to get a strong portfolio.
If you use a stockbroker or investing agency, like Charles Schwab or Vanguard, check to see what resources are available to you. Many of these services offer information with your portfolio that can help you stay informed to make the best investing decisions. Even if you call into their offices, their customer service representatives are often trained to answer any questions you may have about market trends and options.
Morningstar
Morningstar is a financial services firm that focuses on investment research and recommendations. They offer a broader analysis of stocks and trends, so instead of offering suggestions, they provide information and stock rankings to embolden people to make decisions based on their own experiences.
They have their investment management division, alongside their software and analytics platform that rates and ranks stocks based on which have been strong performers and which have high growth expectations.
Stansberry Research
Stansberry Research is another firm that offers information and analysis, which is provided in their bi-monthly newsletters. They offer stock advice, including strategy and investment recommendations. Their information is segmented based on the type of investor you are and includes complete portfolio recommendations that adhere to specific investing goals and cost levels.
They offer a comparable cost level for their service as Motley Fool, but their information is presented differently. They provide good information but with more of a focus on information, rather than the fun, informative style Motley Fool is known for.
Tim Sykes Penny Stocks
This is a program that might appeal to people interested in more active, short-term strategies. Tim Sykes’s subscription is a little more expensive but offers chances of high returns, given the nature of penny stocks. His newsletters include technical analysis on strategy, as well as a focus on current events. However, since it deals in penny stocks, most of its strategy involves shorting out these stocks due to their overall levels of volatility.
It isn’t a newsletter for everybody, but if you’re unsatisfied with just a buy-and-hold strategy alone, you may want to look into it. Be aware of the risks you’re undertaking if you do so.
Jim Cramer Action Alerts
Jim Cramer is best known as the host of Mad Money and for his website, TheStreet. However, he also offers his investing newsletter and stock pick service. It has a conservative investing approach and is best suited for retirement investors, which makes it a great alternative to Motley Fool’s Rule Your Retirement newsletter.
Action Alerts Model provides real-time alerts based on the stocks that Jim Cramer and his team are themselves investing in. It gives itself a layer of credibility because they are subjecting themselves to the same risk they’re suggesting taking. However, it is not a high-performing portfolio and focuses much more on conservative, safe investments.
Conclusion
While the Motley Fool’s services aren’t for everyone, they can be a great tool for many people. They offer subscription deals periodically that allow a discount for a set subscription of 2 to 3 years, which could be perfect to help you get your portfolio started and teach you the necessary information to continue to maintain it on your own.
Their base programs do offer a great return on your stock investments, higher than the S&P alone and well beyond the cost of their subscription. However, many people aren’t comfortable paying for a subscription advice service, feeling that money could be better served when invested.
Like everything else in stock investing, what you decide ultimately comes down to your comfort level. You could do just as well for yourself by reading up about stocks on your own, then making your own decisions, and adjusting as you go. Where Motley Fool shines is for people who prefer a more passive approach to stock investing.
Their service has been helpful to many people, and their track record and experience do speak for itself. Don’t expect an infallible service and use it alongside other research in investing. Trust in yourself as you become a more experienced investor and decide for yourself on a case-by-case basis whether you trust their weekly advice.
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