The Motley Fool is a huge name in the world of investing – in fact, they’re arguably the most popular investment newsletter of the past few decades.
Motley Fool’s Stock Advisor is their flagship newsletter, and over the past 25 years it has generated incredibly high returns of 343% on average.
Whether you’re an experienced investor or just getting into the game, you may be wondering if you should invest in this stock recommendation service.
In this article, we’ll review the Motley Fool Stock Advisor to see if it’s worth your money.
About Motley Fool
The Motley Fool was founded in 1993 by brothers David and Tom Gardner, who still run the site with their staff of expert analysts.
They were one of the first investing sites to market to the average consumer who was interested in investing.
They initially published content on AOL’s investing message boards and then created their own site soon afterwards.
They launched their first newsletter, Stock Advisor, in 2002, right as the internet was starting to boom.
Since then, the Gardners have grown their investment media empire with several other investing newsletters and premium subscription services, as well as podcasts and bestselling books.
They’ve been able to draw in unlikely investors with their sense of humor and accessible approach to investing.
They’ve received widespread media attention for their successful stock picks, many of which have been huge movers and shakers in the market.
What is Motley Fool Stock Advisor?
Stock Advisor is Motley Fool’s flagship newsletter and stock advising service.
They use in-depth analysis to choose successful stocks for a buy and hold investment style, making it ideal for the average consumer as opposed to the professional trader.
Stock advisor also gets you access to helpful investment education tools on the Motley Fool website, which can help you make the best investment decisions for your needs.
You’ll get new stock picks from David, Tom, and their analysts throughout the month, which you’ll receive via email and through their online portal.
Stock Advisor Key Features
Each Motley Fool newsletter has a few key components. Beyond the helpful recommendations in the newsletter, your subscription also gets you access to a variety of features on the Motley Fool website.
Within the newsletter, you will get:
- Two new recommendations each month. Tom and David each pick one stock they recommend, and they go into detail about why it’s such a good buy. You’ll get an in-depth look at the company, who’s running it, who their customers are, and why they’re so interesting to David and Tom. You’ll also get their take on why you should buy, as well as any potential risk factors to consider. This well-rounded approach helps you decide if the stock is going to be the right fit for you.
- 10 ‘timely’ stock picks throughout the month. Each month, David and Tom pick five stocks that they encourage investors to buy now. These stocks aren’t necessarily new, and many of them have repeated throughout the years. You’ll find a short overview of each stock with the picks. Since these picks don’t come with as much information, it’s important to research on your own, just to make sure they are a good fit for your portfolio.
These picks are updated every Thursday on a rolling basis, and they completely refresh every month.
In addition to the stock picks, you also get access to a wide variety of handy features on the Stock Advisor website. These include:
- Motley Fool special reports. The Motley Fool team frequently publishes premium articles just for Stock Advisor subscribers with helpful investment news and trends. You can browse through their entire library of special reports, which can be very helpful if you’re starting out and diving into the world of investing.
- Discussion boards. Your subscription gets you access to the entire Stock Advisor community, where you can chat with other investors. You can choose from a variety of different message board topics, where other users share their experiences and insights on investing. This is a great place to get a consensus or ask questions as you are building your portfolio. However, you don’t have to post to enjoy this feature – you can actually get plenty of helpful information just by reading the message boards.
- Starter stock portfolios. This set of stock recommendations is updated every year, and it is intended specifically for new investors building their portfolio for the first time. They are assembled from past recommendations, and they are a great place to start if you are new to investing.
- Stock analysis tools. These can help you evaluate stocks that you are considering purchasing. On the Motley Fool website, you will find a range of tables and charts that contain statistics about all of the stocks that David and Tom have recommended. This is an easy way to do your research on a stock before you commit to buying.
- Portfolio tracking tools. You have the option to link your brokerage account to the Motley Fool website, so you can keep track of your portfolio’s performance and read about new stock recommendations in one easy place. The Scorecard feature gives you detailed data on the stocks you are holding, and in the Favorites section, you can save stocks you are interested in buying, so that if you do want to purchase them, it saves time in the process. The Favorites section will also give you ‘buy’ or ‘sell’ recommendations for the stocks you’re holding and keeping an eye on.
Stock Advisor Pricing
You have the option to pay for Stock Advisor on a monthly or yearly basis. If you choose to pay monthly, the cost is $19 per month.
If you choose to pay yearly, you’ll pay $199 each year. This makes it one of the more affordable investment newsletters out there. If you know that you want to commit to a full year of the service, you will save a little bit of money by paying annually.
You also may be able to find online discount codes for annual payments.
If you do decide to purchase the subscription annually, you get a 30-day refund period where you can try out the newsletter and cancel if you aren’t interested.
How does Motley Fool choose their stock recommendations?
The Motley Fool’s Stock Advisor newsletter uses a buy and hold investment strategy when choosing their stock recommendations. This means this newsletter isn’t going to be as helpful if you are an active trader.
For each stock recommendation, they go into detail about why they selected it, and they also provide you with full access to the stock’s statistics. This transparency helps you make the best investment decisions for your personal portfolio.
There are a variety of factors that go into Stock Advisor’s recommendations.
The first is a diverse portfolio, which is a basic principle that any long-term investor should follow. Their list of recommendations has both large cap and small cap stocks.
And while they do follow trends in terms of investing in certain industries, they don’t put all of their eggs in one basket in terms of trendy products or services. There is always a balance.
Another principle that Stock Advisor relies on heavily when investing is looking at the business holistically, instead of just considering the numbers.
Of course, the financial, numbers-based aspects are important, but they need to be combined with information about the business practices and long-term plans for success.
They often look at upcoming product releases and other company prospects to gauge a company’s potential financial success. However, there are occasions where Stock Advisor will recommend investments based on market overreactions to global news or trends.
Finally, Stock Advisor picks tend not to follow the crowd. Instead of opting for stocks that are already receiving a lot of attention, they look for stocks with untapped potential or things that have been overlooked by the general investment community.
However, with the popularity of the Stock Advisor newsletter, an interesting phenomenon often happens when they recommend a stock. Since so many people take the Stock Advisor recommendations, it can actually move the market.
If you want to purchase one of the recommended stocks, it’s best to do so as soon as possible after the stock has been recommended; otherwise, the price could spike.
Overall, this broad buy and sell approach has proved successful. Once you subscribe to the service, you will be able to read more about it on their website. Motley Fool provides extensive investment education content on their site, so you can learn more about exactly how they choose their stocks and the strategies they rely on.
This will help you implement them in your own investments and make great investment decisions on your own.
Pros and Cons of Stock Advisor
Like any purchasing decision, there are pros and cons to signing up for Stock Advisor. Here are the advantages and disadvantages of this newsletter that you should look at before making a purchase.
Advantages of Stock Advisor:
- Incredible success rate. The biggest reason that people keep coming back to Stock Advisor for their recommendations is simply because they have been very successful over the years. When compared with the average returns of the market, Tom’s picks have generated 157% returns, and David’s picks have generated a whopping 545%. Since its inception fifteen years ago, Stock Advisor has well outperformed the S&P 500. Although no newsletter can provide foolproof recommendations, Stock Advisor has built up a reliable track record and are trustworthy. However, you should always research stocks on your own before purchasing, just to make sure they are a good fit for you.
- Access to premium recommendations and content. Another benefit of the Stock Advisor subscription is that it gets you access to a huge amount of investment content that can help you build your portfolio. Not only do you get current recommendations sent to you, but you also get access to past recommendations, and you can go through detailed stats and other related content to learn more about their performance over time. You can also read through their articles and special reports to educate yourself on investment trends, so you really get a lot of value in terms of the content offered.
- Active community. Another benefit of the Stock Advisor subscription is that you get to interact with their community, which is always active. You can learn a lot just from reading the message boards, or you can ask your own questions and get insight from other investors. This is a great way to get a more diverse set of opinions on any investment decision you are considering making.
- Doesn’t require excessive commitment to investing. There are many investment newsletters out there that are designed for aggressive investors or day traders, but for the average person, having to wait around and time the market on each trade can get very inconvenient and even overwhelming. Many people also just aren’t comfortable with risky, aggressive trading strategy. Stock Advisor is great for those who want a middle-of-the-road approach, and don’t want to feel like they have to invest a huge amount of time in their investments. It’s also appropriate for beginner investors, because there’s so much educational content available.
- Good value for money. While a Stock Advisor subscription certainly isn’t cheap, it’s more affordable than many of the other in-depth newsletters out there, and you get a huge amount of content with your subscription. You also have no obligation to continue past your subscription term, and they are easy to cancel if you no longer want to participate. If you are unsure of whether or not you want to subscribe long-term, you can sign up for a month just to see how you like it before committing.
Disadvantages of Stock Advisor:
- If you are an active day trader or like to use an aggressive investing strategy, Stock Advisor probably isn’t going to be the best fit for you. Their investments are chosen with a buy and hold investment strategy in mind, and the email notifications aren’t sent in a timely enough manner for day traders to be successful with the recommendations.
- On the other hand, if you are new to investing or just like to invest casually, the amount of information you get from the Stock Advisor subscription can be overwhelming. You’ll get several emails from them per week, and although they contain helpful information, they can feel overwhelming if you don’t have time to sit down and read them.
- If you do decide to cancel your subscription at any point, you won’t get a prorated rate that would refund the rest of your money. Essentially, all subscriptions are final. However, it is easy to cancel your subscription if you don’t want it anymore – just be sure to do it before the system auto-renews it.
Is Stock Advisor right for you?
You may be wondering if the Stock Advisor subscription is right for you. Motley Fool offers several different newsletters, each of which focus on different investment strategies and goals. Before signing up for Stock Advisor, have a look at all of the product offerings to see which one makes the most sense for you.
Stock Advisor is the flagship Motley Fool newsletter, and it’s the best one if you are new to investing and to Motley Fool. The amount of investment education content on the site makes it hugely valuable for anyone that is just getting started with investing and wants to develop their strategy.
It’s also great for a casual investor who is more experienced and wants to make their own investment decisions, but needs some guidance to point them in the right direction.
With so much content available, those who are interested in learning more can really dive in, but you don’t have to be active all the time to be successful with their strategies.
Stock Advisor is not going to be the right fit for someone who wants a riskier, more aggressive investing strategy.
Although there is plenty of information available on the site, it’s not updated in a timely enough manner to be helpful to day traders.
It also uses a long-term investment strategy, so their recommendations may not work effectively with a shorter term approach.
Overall, Stock Advisor is a reliable investment service with a huge amount of helpful content for the average self-directed investor.
Out of all the Motley Fool offerings, this one is the most universally appealing, and it’s the best place for new investors to start out.
With a long track record of successful investments, their stock picks and advice are very trustworthy.
The subscription provides good value for money and gives you everything you need to effectively manage your portfolio.
Of course, you should always do your own research on stocks before making a purchase.
Stock Advisor is currently on sale for a limited time for only $99. If you are interested, make sure you act now.