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All stock market investors can be split into basic categories of passive or active investors. Passive investors often rely on mutual funds and exchange-traded funds (ETFs). Active investors, on the other hand, choose individual stocks they feel have a chance to outperform the average.
Some investors, like Warren Buffett, have earned celebrity status for their ability to find stocks that are undervalued and primed for big returns. But that kind of success requires studying financial reports, charts, trends, and more…day in and day out.
Unless you happen to work on Wall Street, you probably don’t have time to do that kind of intense research. That’s one of the reasons that stock newsletters like the Motley Fool Stock Advisor can be so appealing. Investing pros do the research for their subscribers and then tell them which stocks they believe are a great buy.
The Motley Fool Stock Advisor is a stock pick newsletter that has been delivering strong results for a long time and has a loyal subscriber base. But is the value of the service worth the cost? Here’s what you need to know.
What is The Motley Fool?
The Motley Fool is a company that provides investment and financial advice. The company was founded by brothers David and Tom Gardner in 1993. Its name pays homage to the court jester (Fool) in Shakespearean dramas who was the only person able to speak the truth to the king and queen without fear of execution.
The Motley Fool Stock Advisor offers a wide variety of free content through its website and multiple podcasts. In 2002, the Gardner brothers launched their premier stock-picking product, the Stock Advisor newsletter. While more premium services have since been added, the Stock Advisor is still Motleys Fool’s most popular (and affordable) newsletter and will be the focus of this review.
Motley Fool Stock Advisor Features
It’s important to understand that Stock Advisor is NOT a robo-advisor that will tailor a program to suit your investing needs or determine your risk level. Rather, this is a “buy this stock and that stock” service that leaves the actual mechanics of acting upon those recommendations up to each subscriber.
Technically, Motley Fool does have a wealth management option. But it’s completely separate from the Stock Advisor service, requires an investing minimum of $15,000 to $300,000, and its fees are on the high side. If custom portfolios or automated investing are what you’re after, you may want to look at a few robo-advisors instead.
The Stock Advisor newsletter has a great performance track record. The company says that its stock picks have enjoyed an average return of 546% since the service launched in 2002. That’s more than five times the growth of the S&P 500 during that same period.
While these numbers are impressive, it’s important to note that past performance is no guarantee of future success.
Also, when stocks are included in newsletters like Stock Advisor, it can cause their prices to quickly spike. This means that subscribers who wait a few days or weeks to buy recommended stocks may not see such dramatic returns.
Two New Stock Picks Per Month
Every two weeks, the Stock Advisor team releases a new stock pick recommendation. This format allows for subscribers to receive one new pick each month from both David and Tom Gardner.
The Motley Fool team follows a long-term, buy-and-hold investing approach. They ask investors to hold on to the stocks that have been recommended in any of their premium subscriptions for a minimum of three to five years.
New stock picks are released on the first and third Thursdays of the month. Subscribers can log into their account portal to see the latest picks. They can also opt-in to receive email and text alerts whenever a new buy or sell recommendation has been released.
Best Buys and Starter Stocks
In addition to the two picks per month, subscribers get access to the 10 stocks that The Motley Fool thinks are the best to buy today. Each of these Best Buys will be stocks that have been promoted within the last month as good investment opportunities.
Are you an investing newbie? If so, the Starter Stocks guide can help you quickly build your first portfolio. This list includes 10 stocks selected as best for new investors. The Starter Stocks guide is exclusively offered to Stock Advisor subscribers and is updated on an annual basis.
List of All Previously Recommended Stocks
Stock pick services often brag about amazing returns. But how can you be sure that their numbers are legit?
After all, you cant actually see the stocks that a service recommends until you become a subscriber. Even after subscribing, some newsletters only show their current picks rather than ones that were made in the past.
To its credit, the Motley Fool is totally transparent about its stock pick history. Once you’ve created your account, you can navigate to the Performance tab to see every recommendation that the Gardner brothers have ever made.
For fun, I decided to scroll down to the very bottom of the list. Sure enough, I was able to see the stock picks that had been sent out all the way back in 2002. I was happy to see that losers were listed right alongside the many winners as this demonstrated that The Motley Fool values transparency and isn’t trying to hide its mistakes.
Active Investing Community
Subscribers also get access to all of the Stock Advisor community boards. Investing questions are asked and answered by the community 24/7. Popular boards include:
- Ask the Stock Advisor Team
- Stocks That Interest You
- 10% Promise Archive
- Becoming an Investing Master
- Investing Philosophy
- Calendar of Events
There is also a dedicated discussion board for more than 100 popular stocks. Stock Advisors community members are all passionate about investing and can support you along your journey to becoming a confident investor.
Includes 30-day money back guarantee
The Motley Fool Pricing and Promotions
Stock Advisor normally costs $199 per year, but The Motley Fool is currently offering a 60% discount that drops the annual price to $79 the first year for new members. New annual subscriptions are also backed by a 30-day money-back guarantee.
To get the discount on the annual plan, you’ll need to use this link. If you try to sign up for Stock Advisor from its Premium Services page, you won’t be able to see the deal.
Whether or not Stock Advisor is worth the money will depend, in large part, on the amount of money you have available to invest. The newsletters flat-free structure means that investors with large balances are likely to save money over Asset Under Management (AUM) models while investors with small balances may not.
For example, it’s common for robo-advisors to start their advisory fees at 0.25% of AUM. That means investors with $10,000 in assets would pay $25 per year and investors with $100,000 portfolios would pay $250. So Stock Advisor would cost $74 more for the investor with $10,000 investor and $151 less for the investor with $100,000.
How to Enroll in Motley Fool Stock Advisor
You can visit this page to sign up for the Motley Fool Stock Advisor. You’ll need to provide an active debit or credit card to pay for your subscription fee. In my own experience, it took less than 5 minutes to create an account and get access to all the picks.
It should be noted that you’re likely to receive some sort of upselling during the signup process. For example, I was told that I had been selected for a special upgrade opportunity to add the Rule Breakers service to my membership.
Once you’ve created your account and logged in, you’ll be asked to answer a few questions to complete your investing profile.
It should take less than a minute to answer the questions. And that’s it! You’ll immediately have access to all the monthly picks, Stock Starters, community discussion boards, reports, and more.
The Motley Fool Mobile Support
At one time, The Motley Fool did have a mobile app. But the app is no longer available and the company says that it’s still working on a replacement. While there is currently no mobile app, Stock Advisor subscribers can receive SMS stock alerts.
The Motley Fool Customer Service
Stock Advisor subscribers can call The Motley Fool Member Services team at 877-629-2589. Business hours are Monday through Friday between 9 a.m. and 5 p.m. (ET). Email support is also available through the company’s customer contact form.
What Others Are Saying AboutThe Motley Fool
The Motley Fool has a B rating from the Better Business Bureau (BBB) and has received 145 customer reviews with an average rating of 4.21/5. The company also has a 3.1/5 rating on Trustpilot out of 872 reviews from customers.
Positive reviews often praised the performance of the Stock Advisor picks. One recent reviewer, for example, claimed that his gains in 2020 could pay for his annual subscription fees for the rest of his life… and maybe his kids too!
Many negative reviewers, however, complained that they’d been inundated with constant upselling emails since signing up for a Motley Fool service. Others cited problems with promptly receiving their refund after canceling within their first 30 days of membership.
The Motley Fool Pros and Cons
Strong historical performance — Stock Advisor picks have consistently outperformed the overall stock market for nearly 20 years.
30-day money-back guarantee — Annual plan subscribers can receive a full fee refund if they cancel within their first 30 days of membership.
Supportive community — Access to hundreds of discussion boards for quick answers to your investing questions.
Email and text stock pick alerts — Receive notifications immediately whenever a new stock pick has been issued.
Inexpensive for investors with large balances — If you have more than $40,000 to invest, you’ll likely pay less for Stock Advisor than even the most affordable robo-advisor service.
Not a wealth management service — Stock Advisor is not a broker or robo-advisor. You’ll need to buy and sell all of the stock recommendations yourself on a separate platform.
Frequent upselling — Many customers have complained online about the number of marketing emails they began receiving after becoming a Stock Advisor member.
Expensive for investors with small balances — If you have less than $40,000 to invest, the Stock Advisor’s annual cost may be more than you’d pay for robo-advisor portfolio management.
How We Tested the Product
For our test of Stock Advisor, we signed up for a free trial ourselves so that we could fully evaluate the signup process and user experience. The four main factors that were considered during our test were:
- Ease of use
- Customer service
Stock Advisor was given an editorial rating of 1 to 10 in each of the above categories based on how it compared to other stock tip newsletters and advisory services.
It couldn’t have been any easier to sign up for Stock Advisor and I was pleased to find that the back-end experience was pretty much exactly as advertised. I also loved the fact that The Motley Fool lists all of their previous picks in the interest of transparency.
The number of different premium services offered, however, can be confusing and even a bit overwhelming. In total, the company offers 30+ stock pick newsletters and real-money portfolios. Once you’re in The Motley Fool universe, you can easily get sucked into a spiral of always chasing the next flashy stock or newsletter that a marketing email makes you aware of.
If you can stick with the main recommendations provided in Stock Advisor, you’re likely to find great value in the service. But if you feel constantly tempted to pay for more services than you need or to become a speculative trader, you should probably step away and choose a different investing strategy.
The Motley Fool Alternatives
|Zacks||Advice for active traders|
|Morningstar||Mutual fund screening|
|Empower||Analyzing portfolio fees|
|Financial advisors||Comprehensive financial planning|
Zacks is an investment research company that has been offering in-depth stock analysis since 1978. Its founders, Ben and Len Zacks developed the well-known Zacks Rank system for picking stocks. In addition to producing a lot of free content, Zacks offers three paid stock-picking services:
- Zacks Ultimate
- Zacks Investor Collection
- Zacks Premium
Zacks offers an all-in-one trading platform called [wp_shortcode_43]. The platform is built with high-frequency traders in mind. It offers charting and technical analysis tools, low-margin trading interest rates, an options strategy lab, and much more.
Finally, Zacks members get access to 20+ free research subscriptions and free trials to 80 premium services. Learn more about Zacks Trade in our full review.
If you prefer to invest in mutual funds rather than individual stocks, Morningstar may be the right investing research company for you. While the company provides some free content, you’ll need to sign up for Morningstar Premium to access all of its tools. These include:
- Analyst Ratings: See the star rating of each mutual fund, stock, or ETF based on the analyses of more than 150 Morningstar’s analysts.
- Screeners: Search and filter mutual funds by ratings, performance, financials, and more.
- Top Picks: See the list of mutual funds that have earned Gold, Silver, or Bronze ratings from Morningstar’s research team.
- Portfolio X-Ray: Evaluate the performance of your portfolio’s asset allocation and rebalance if necessary.
Morningstar Premium costs $29.95 per month, $199 per year, $399 for two years, and $449 for three years. You can also try Morningstar Premium risk-free by taking advantage of its 14-day free trial offer.
While The Motley Fool can provide new stock ideas, it can’t analyze how your current investments are doing. But Empower offers many tools for evaluating the performance and cost of your existing portfolio.
With the exception of its wealth management service (which has a starting advisory fee of 0.89%), all of Empower’s research tools are completely free.
Investing tools offered include:
- Net Worth Calculator
- Savings Planner
- Retirement Planner
- Investment Checkup
- Fee Analyzer
The Empower Fee Analyzer, in particular, could be very helpful if you have a 401(k) account. With this tool, you can identify any hidden fees you may be paying. And if it turns out that your current investments are expensive, the Fee Analyzer tool can help you find lower-cost alternatives.
Financial planning goes beyond just picking the right investments. You’ll also need to consider things like how to maximize your investment income in retirement, how to save on taxes, and how to create a proper estate plan.
If you have a complicated tax situation or simply want to get advice that is tailored specifically to your situation, you may want to set up an appointment with a financial advisor. If you’re not sure how to find a fiduciary advisor near you, try using an advisor-matching service like SmartAsset and Paladin Registry.
The Motley Fool Stock Advisor could be a good option if you’re someone who’s comfortable with DIY investing. Remember, this newsletter only recommends the stocks to buy. But actually acting on that advice by buying and selling those stocks will be completely up to you.
If you don’t think you have the time (or desire) to be a hands-on investor, a passive investing option might be a better choice. For example, you could make automatic investments each month into mutual funds or ETFs with one of the top discount stock brokers.
Finally, Motley Fool won’t be the right choice for investors who want wealth management services. If that’s what you’re looking for, you may want to open an account with a robo-advisor or hire a financial planner instead.
Includes 30-day money back guarantee