Motley Fool Review 2020

Stock Picking and Analysis

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Motley FoolIf you invest in single stocks, it's not always easy to pick the next winner. The Motley Fool is a well-respected stock picking service with a nearly 30-year track record. According to The Motley Fool website, it has far outpaced the S&P 500. The stock advisor service claims to have beaten that key market index by a factor of four over the last 17 years. Let's take a look at the costs, how it works, and if it makes sense for your investment needs.

Our Rating - 8

8

The Motley Fool is an investment website with a wide range of investment opinions. The Motley Fool Stock Advisor service costs $99 for the first year. This gives you access to two monthly stock picks from Motley Fool analysts, including co-founders David and Tom Gardner. The service has beaten the results of the S&P 500 by a significant margin over nearly two decades.

Sign up for the Motley Fool Stock Advisor Service

What Is The Motley Fool?

The Motley Fool is a stock and investment website. It employs many writers and analysts who are constantly combing the market for stock picks and investment ideas. The flagship product for investors is the Motley Fool Stock Advisor service. This paid service gives you access to a more exclusive list of stocks.

  • Customers get two new stock picks per month.
  • Subscriptions cost $99 for the first year and then $199 per year going forward.
  • You can try it risk-free for the first 30 days and then cancel for a full refund if you're not satisfied.
  • At any given time, Stock Advisor customers have access to about 10 recommended stocks.

The Motley Fool claims that the portfolios of the founders have returned higher gains than the S&P 500.

  1. Tom Gardner's stocks have returned an average of 201.8%.
  2. David Gardner's stocks have returned an average of 670.6%.

These contrast with a 92.7% average for the major S&P market benchmark (as of this writing).

The site generally maintains a lighthearted attitude, as reflected in its subscription newsletter and other services. However, the Motley Fool Stock Advisor service is generally well respected in the investment community.

For investors willing to take a bit more risk, the pricier Rule Breakers subscription costs $299 per year and focuses on growth stocks. The Fool also offers retirement guidance and resources in its Rule Your Retirement subscription for $99 per year, but this review focuses primarily on the Stock Advisor subscription.

Who Should Subscribe to The Motley Fool?

The Motley Fool is best for people who are interested in semi-active trading.

If you are a brand new investor or want to learn more about picking individual stocks instead of exchange-traded funds (ETFs) or mutual funds, The Motley Fool is an excellent resource with a reasonable price tag.

When I dropped in for the first time, I saw a list of stocks that I was mostly familiar with, and a few that were new to me. But I probably know more companies than the average person, since I'm a finance writer. Of the 11 stocks presented, I had actually considered two of the stocks myself at different times.

Expert investors who like finding their own stocks and passive investors who prefer to buy and hold diverse funds should skip this service.

History of The Motley Fool

Brothers David Gardner and Tom Gardner founded The Motley Fool in 1993. The Gardners still run the company from its headquarters in Alexandria, Virginia, in the Washington, D.C., area.

The original online launch led to widespread coverage, including by The Wall Street Journal and The New Yorker, and a partnership with then-booming America Online. It did well in the early '90s. But the company suffered significant losses in the fallout of the dot-com market collapse in 2001.

In the years since, however, The Motley Fool re-found its footing and expanded to include its own public blog, podcast, and video content, in addition to the Stock Advisor, Rule Breakers, and Rule Your Retirement subscriptions.

Biases and Controversies

While The Motley Fool Stock Advisor customers who have followed its advice perfectly since inception have done very well, it hasn't always performed well. The dot-com bubble was so bad for The Fool that it ended up laying off 80% of its staff and closing multiple offices.

During this period, The Motley Fool espoused an idea called “The Foolish Four.” This hypothesized that a well-constructed portfolio of just four Dow Jones Industrial Average stocks could beat the markets in the long term. Clearly, this isn't a great strategy, which The Motley Fool has since accepted.

On both the free site and within the paid subscription service, marketing and upselling are very in-your-face. This may deter some potential users.

What to Look for in The Motley Fool

Subscribers should look for the two big stock recommendations from Tom and David each month. Also, the brothers share their recommended “Best Buys” that could help fill out your portfolio. At the time the screenshot below was taken, there were 11 stocks listed on the buy list. New recommendations come out every Thursday.

The Motley Fool Stock Picks
Stock Picks from the Stock Advisor homepage.
(Company names, logos, and tickers have been removed.)

Pros:

  • Weekly stock recommendations with expert analysis. Get a weekly stock pick from a market expert with a proven track record.
  • Relatively affordable annual cost compared to some investment newsletters.  The service is $99 for the first year and $199 for future years. That translates to $8.25 per month for the first year and $16.58 per month in future years.
  • Text and email alerts give you quick information. Opt-in for alerts via email and text message so you don't miss an announcement.

Cons

  • Upsales.  The site is heavy on sales and uses strong marketing language to try to sell you additional subscriptions.
  • No stock recommendation is guaranteed. While The Motley Fool team has outperformed the markets overall, not every stock they suggest is a winner.
  • Recommendations can move the market. Stock prices can temporarily spike after a Motley Fool newsletter comes out, which might lead you to buy at a higher price if you're not careful.

Final Thoughts on The Motley Fool

Most investors shouldn't put their entire portfolio into the suggestions of any single stock picking service. Among stock subscriptions, however, The Motley Fool has a good reputation and a strong track record of success.

In my opinion, the stocks in the current portfolio as of this writing are logical and sound. There's never any guarantee of future performance, of course, but the advisor tends to do well overall.

If you're up for a subscription service that costs $199 per year, the introductory deal is an excellent way to test the waters. With a lower $99 fee for the first year and the 30-day refund policy, you can take a risk-free look behind the scenes to decide if it's right for you.

Eric Rosenberg

Eric Rosenberg is a finance, travel and technology writer in Ventura, California. He is a former bank manager and corporate finance and accounting professional who left his day job in 2016 to take his online side hustle full-time. He has in-depth experience writing about banking, credit cards, investing and other financial topics and is an avid travel hacker. When away from the keyboard, Eric enjoys exploring the world, flying small airplanes, discovering new craft beers and spending time with his wife and little girls.

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7 Comments

  1. Motley Fool is only good for themselves!! They could ruin a business. They predict a stock will go down and if that does not happen. They keep writing until it goes down!! After they write a review they advertise you should invest in something else and if you click on it it leads you to an ad which will ask you for money. Motley Fool will write articles until the stock bottoms out.

  2. I would not recommend the Motley Fool. Their recent recommendation of Luckin Coffee was a total disaster and many of their subscribers lost a lot of money. They also tout early investments in Amazon and Netflix but those investments are also over-hyped since it took years for those stocks to take off. The key to good investment advice is timing, not just picking the right stocks. The constant upsells are beyond annoying and I wish I had never subscribed and wasted my money.

    1. I wanted to invest in stocks. After Google Search I find Motley Fool Canada and entered my information. I received email and got annual membership. I am a paid member with Motley Fool and never received reports or recommendation. Instead, they are sending me a lot of advertisement email in order to grab more money form my pocket. I tried to contact them and left a few messages, but the y never respond to my phone calls. Then I sent them emails, and got automatic response that they will contact me in 24 hours. However, they don’t bother to contact once you get membership. Customer service is bad and they don’t care for their members. Please don’t waste your money and time with them. However, Motley Fool US is better as they receive call and provide response. I called them as I got their number from the internet and they responded quickly and advised that I should contact Motley Fool Canada. You can test Motley Fool Canada by calling them but they will not receive your call.

  3. Yes, the constant efforts to upsell into new and additional advisory services is off-putting. You could sink thousands of dollars a year into this services, and stay constantly busy at deciding what to buy.

    They also have a managed account, I believe, which might be worth trying for a year or two to test how good they really are.

  4. Made some good money, then they went digital. Stopped supporting some of the stocks I had bought. You need to know when to sell, not just buy. It’s like a carnival now; hurry, hurry, hurry, look for our next recommendation. If you need to be spammed, The Motley Fool is your ticket. In twenty days, got 19 emails. If you listen to the emails, you will do exactly what they recommend against.
    Finally, to top it all off, I tried to cancel auto renewal. No option to do this, using the Comcast model. So I changed the credit card info. They still used the old information and renewed anyway. Sent a message about their fraudulence and stated I wanted a refund check. No feedback after three weeks.

  5. Motley Fool is exactly what it says it is – a fool. Don’t be hyped into joining them – even for $99.00 as it’s a waste of time and money. I get a lot more out of other FREE sources. I give these guys a big “0” out of 10. Stay away!!

  6. I won’t speak about their stock picking prowess but I will state that you should be careful about your subscription renewals. They will automatically renew after your initial subscription and if you try to cancel by email or by submitting an online form, you will receive no response and they do not assist you for existing services on the phone number listed. This borders on fraud and I am going to report them to the BBB

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