With a name reminiscent of an 80s hair band and a court jester hat logo, it’s no surprise people wonder, “is Motley Fool worth it?”
What the heck is The Motley Fool anyway? And more importantly, why would anyone want to learn from a company that boasts a “foolish investing” philosophy?
The Motley Fool is a financial services and media company. It creates educational content across multiple platforms and offers extensive personal finance and investment services. Over the years, the company has garnered a positive reputation for its sound investment strategy and suitability for beginner and experienced investors alike.
Who is Motley Fool?
Founded in 1993 by brothers David and Tom Gardner, The Motley Fool Stock Advisor company began as a simple print newsletter that contained educational content about investing.
On April 1,1994, the brothers published an advertisement about a sewage disposal company they were promoting to teach the masses about investing in stocks. That ad, which was created as an April Fools’ joke, started to gain buzz and eventually got picked up by the Wall Street Journal, propelling the Motley Fool into the financial spotlight.
Two years later, the Gardner brothers published a book titled The Motley Fool Investment Guide: How Inexperienced Investors Can Prosper, which became a New York Times bestseller. Though the guide was well received, unfortunately, it also received a fair amount of criticism and negative reviews from blogs dismissing it as “20-something so-called advice.”
In 1997, The Motley Fool launched its website Fool.com. The company continued to grow until the market collapsed in 2001, forcing it to close branches and lay off 80% of its employees.
In addition to providing financial advice to customers in investing and taxes, The Motley Fool launched its subscription-based revenue model in 2002. As a result, it expanded its advisory service to Germany, Canada, Australia, and the United Kingdom.
Biases and Controversies
The Motley Fool suggests there are 15 biases or controversies that plague investors’ minds. Here are a few common ones you may recognize:
Humans have a knack for ignoring or avoiding information that goes against our beliefs. Instead, we search for “signs” or other information confirming our opinions and beliefs.
Recent events that have occurred often hold more weight in our minds than past events. This perception impacts the choices we make with our money and investments.
Herd Mentality Bias
You’ve likely noticed this bias in your own life as it closely correlates with FOMO, or “fear of missing out.” It’s natural to want to be included.
The Motley Fool warns readers to be aware of these biases and to avoid them, when possible.
Motley Fool Services
According to studies, about 30% of American consumers prefer to use financial advice services offered by professionals rather than go it alone. This has served The Motley Fool well as it is one of 218,100 financial advisors in the United States, offering advisory services to both free and premium members.
The Motley Fool’s website aims to help you build a profitable investment portfolio and achieve your financial goals. It offers valuable financial advice in the following areas:
Motley Fool analysts will give you the necessary information to invest in the stock market, such as recommended stock picks, special reports, and free market news.
Rule Your Retirement (RYR) is a service that will help you make better investment choices for retirement and learn how to reap the most benefits from social security.
The Motley Fool also offers access to the best stock brokers to help you meet your investing goals and assess potential risks.
Other services offered include:
- Epic Bundle
- Rule Breakers
- Everlasting Stocks
- Market Pass
- And many more…
How Much Does Motley Fool Cost?
Prices vary depending on the subscription service that you want to enjoy. An annual membership will cost new members $89 for the first year and $199/year each subsequent year.
To enjoy premium services, you will need to subscribe to the area where you want to get advice and other services. This comes with different pricing ranging from $199/year to over $13,999/year. It’s possible to recoup your subscription fee with a single stock recommendation.
What is the Motley Fool’s Stock Advisor Service?
The Motley Fool’s Stock Advisor Subscription recommends new stock picks each month, starter stocks, and best options to buy.
The company employs a team of stock analysts who are well-versed in the stock market and have access to a list of high-quality stocks and educational materials needed for investing. Motley Fool’s Stock Advisor service is likely a good fit for long-term investors looking to invest in individual stocks to beat the market.
Two New Stock Picks Every Month
Another of The Motley Fool’s popular plans, Two New Stock Picks Every Month, offers subscribers monthly recommendations for buying the two best stocks. This plan is the best option for any serious investor as the research is done for you. You’ll receive 24 stock picks in a year; simply decide which stocks you want to purchase.
Is Motley Fool Worth it?
Given its historical performance, Motley Fool is worth it for anyone who wants to invest in the stock market and has the extra cash not delegated to retirement funds. Moreover, it is affordable to subscribe to this stock recommendation service. When you do, you get access to 24 yearly stock recommendations.
In addition, you will also get recommendations on when to sell your stock. The stock analyst team does in-depth research and advises members on which stocks to buy and sell at any particular time.
According to Wall Street Survivor, about 63% of the Motley Fool picks have always been profitable and thus are proficient in recommending stocks that are likely to double (or even triple) yearly. Therefore, it is worth trying if you want to invest your money in the stock market, look for new stock ideas, want to build a diversified stock portfolio, or learn how to invest your money the right way.
How Does Motley Fool Compare?
The Motley Fool could be compared to similar companies like TheStreet and Morningstar as they each provide personal finance and investing advice. For example, TheStreet’s “25 Rules of Investing” offer could be compared to The Motley Fool’s, providing a list of current best buying opportunities and two monthly stock picks.
Morningstar offers similar stock services and yearly subscriptions as The Motley Fool, with The Motley Fool’s first-year pricing being less than Morningstar’s.
Morningstar and The Motley Fool provide stock picks, recommendations, and research tools to help investors. And each company offers attractive promotions for new subscribers – The Motley Fool offers a $100 discount. In contrast, Morningstar offers a free 14-day trial.
The Motley Fool Review Pros and Cons
The Motley Fool is a sound investing advice company with a vast community of investors that has been reputed for its high returns. It has the best approach to investing and is one of the best places to get financial and investing advice.
- Affordable annual subscription costs.
- Suitable for beginner investors.
- Access to 24 stock recommendations every year.
- Includes research tools for help in searching for the best stocks.
- Guidance on the best time to sell.
- Stock picks with high returns.
- Responsive customer service team and message boards.
- 30-day money-back guarantee.
- Some services are higher-priced.
- No performance guarantees on stock picks.
How Do Their Stocks Perform?
Historically, The Motley Fool picks have performed well. Statistics show that in 2016, 2017, 2018, and 2019 their 24 stock picks grew by an average of 267%, 220%, 127%, and 56%, respectively.
The same statistics show their 2020 current picks grew by 45%. In addition, out of 144 stock picks, 45 more than doubled, and 27 tripled. With the 24 picks, therefore, you can make the right investment choice.
Is Motley Fool a Scam?
The Motley Fool is not a get-rich-quick scheme. Instead, it is a legitimate company offering a wide range of financial and investment services from experienced active investors.
What is Motley Fool’s Investment Style?
The Motley Fool has a unique investment philosophy. It recommends long-term investments over short-term ones; members are advised to opt for long-term quality stocks to hold for long periods before selling them.
In accordance with this philosophy, some quality stocks can grow by unimaginable amounts with some tripling, benefiting long-term investors.
Is the Stock Advisor Program Good for New Investors?
Yes, the Stock Advisor Program is suitable for beginner investors. As a beginner investor, you’ll receive stock tips and picks of blue-chip stocks to invest in. In addition, the discounted first-year membership fee reduces the barrier to entry for potential members looking to test the service.
New investors can access single and individual stock recommendations when they subscribe to the premium membership. Therefore, it is worth it for the new investors as well as for experienced investors.
Of course, new investors might want to try penny stocks. With this, Motley Fool also has many penny stocks with positive returns.
What Type of Investor is Motley Fool Best for?
The Motley Fool is a good option for beginner, long-term, and retail investors. If you want to invest in the stock market but are unsure of how to start, you will access investment advice and recommendations for the best stocks you can invest in for long-term gains.
The investment newsletter is also suitable for beginners. Before buying stocks, you will gain insight into the stock market and many other financial investment opportunities.
Experienced investors also gain access to an investment community where you can leverage your skills to maximize stock picks and other premium services. This program is also suitable for retired employees looking to wisely invest their retirement.
Frequently Asked Questions:
Investing can be complicated; if you’ve stumbled across The Motley Fool while seeking financial advice, you likely have questions about the company and its services.
Here are some common questions you may have as a potential investor:
Is The Motley Fool a Pump and Dump?
It is not. The Motley Fool does not engage in unscrupulous deals. The Motley Fool’s history differentiates it from companies that employ deceitful business practices. They have always recommended high-growth stocks and have witnessed tremendous success with their picks.
The Motley Fool’s proven track record attracts individual investors seeking its financial investment advice and other premium services.
Does Motley Fool Tell You When to Sell?
Yes. The Motley Fool’s strategy is to hold a stock for at least five years before selling. This is meant to give time for the stock to appreciate for better returns.
Based on market fluctuations, the company can recommend you to sell or hold for a specific period. In addition, members on the stock recommendation list receive notice to consider selling particular stocks or to further hold them.
The Motley Fool subscriptions are worth a look and the Stock Advisor program is a great place for beginner investors to learn about good investment opportunities from a company with a solid reputation in the industry.
This article was produced and syndicated by Savoteur.
Ryan Luke is a father of three, a husband, a finance blogger, and a full-time police officer. Through proper budgeting and money management, they have been able to live off one income and build wealth at the same time. As an active member of the personal finance community, his goal is to educate and help people get out of debt and build wealth! Come join him in an active conversation about all the best personal finance information available at ArrestYourDebt.com!