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So, is Motley Fool Stock Advisor legit?
What is the past performance of Motley Fool Stock Advisor stock recommendations?
Is it worth investing in this stock-picking service?
Are there any other better alternatives?
Benefits Of A Stock Picking Service
With a stock picking service, I think you can benefit in the following ways:
- Get stock ideas from experienced analysts who have conducted thorough stock research and analysis
- Leverage other people’s industry knowledge and also time (i.e. save you a lot of time on research)
- Uncover potential investment opportunities because it’s impossible for you to analyze and track every single stock out there (yes, there are almost 4,000 stocks listed on US stock exchanges alone)
How To Choose A Stock-Picking Service
Here are a few things I will look at while choosing a stock-picking service:
- Is it legitimate? ( there are too many online scams, so it’s better to be safe than sorry)
- Who is giving out stock recommendations? Is the person credible and qualified?
- What are its track records?
- What are its reviews? (e.g. are there any positive reviews?)
- What is included in the stock picking service?
- How much is it?
- Is there a free trial of the service (you should always be allowed to try out their stock-picking service before making a decision)
By the way, there is a difference between stock picks and trading picks.
Stock investors are buying stocks for the long term (i.e. holding the stock for at least a few years)
But, a stock trader is just trying to predict the price movement of the stocks in the immediate term and profit from it in as quickly as a few minutes or hours.
A stock picking service is for stock investors who want to get stock ideas for long-term investment.
Now, let’s take a close look at Motley Fool Stock Advisor and see whether it fits all the criteria mentioned above.
What Is Motley Fool?
So, what is Motley Fool?
Is Motley Fool legitimate?
The Motley Fool is a financial publisher that has been around for almost 30 years.
As of 2019, The Motley Fool has operations in the United Kingdom, Australia, Canada, Germany, Hong Kong, and Japan with a total number of 300 employees.
The Motley Fool is generally regarded as one of the leading financial websites for stock research and analysis.
So, it’s a legitimate company.
Is Motley Fool well-recognized in the financial industry?
The Motley Fool was highly recommended by the most trusted names in the financial industry.
Is Motley Fool Stock Advisor Good?
Do I think the Motley Fool stock recommendations are good?
First of all, let’s take a look at their track record as of Jun 2022.
Below is the performance comparison between Motley Fool Stock Advisor and S&P 500 between 2002 and 2nd June 2022.
As of 2nd June 2022, average Motley Fool Stock Advisor recommendations have returned over 357% since inception while S&P 500 has returned 123%.
In short, the Motley Fool Stock Advisor has outperformed the market 3 to 1.
But, what about its individual stock picks?
This metric is important because I might not be buying every single stock recommendation made by the Motley Fool Stock Advisor.
Below is a table that shows the performance of individual stock picks over the years.
As of May 2022, Motley Fool Stock Advisor has had 171 stock recommendations with 100%+returns.
Here are just some of their best-performing stock picks:
- Amazon: it’s up 19,806%*
- Netflix: it’s up 23,901%*
- Walt Disney: it’s up 632%*
- NVIDIA: it’s up 16,423%*
- Shopify: it is up 4,107%*
- United Health Group: it is up 2,338 %*
[*Returns as of 31st Dec 2021. Past performance is no guarantee of future results. Individual investment results may vary. All investing involves risk of loss.]
Maybe you have been hearing about just putting all your money in stock index ETFs.
Yes, investing in stock index ETFs is safe and you will never go wrong with them.
In fact, I also invest in stock index ETFs and it is part of my investment portfolio.
But, I don’t think I can get above-average returns by investing only in index ETFs.
Here’s my reasoning.
A stock index consists of a lot of listed companies.
Some of these companies are great businesses and can stand the test of time and can get through crises like the coronavirus crisis largely unscathed.
But there are also companies that are badly affected by the current coronavirus crisis and might never recover.
For example, all the major airline stocks are doing very poorly and their prospects are not looking good either.
When you buy a stock index ETF, you are inevitably investing in both good and not-so-good companies at the same time.
Also, legendary investors such as Warren Buffet and Charlie Munger have achieved amazing returns by investing in a number of great businesses with long-term potential.
For me, I want to get stock ideas that could potentially be big long-term winners.
The Motley Fool Stock Advisor gives me a lot of well-researched stock ideas.
Personally, I don’t buy every single stock pick.
What I do is I will go through their stock recommendations and then do my own independent research and analysis before making my decisions.
Will the Motley Fool Stock Advisor always be right about their stock recommendations?
No, because no one can be right about their stock picks 100% of the time.
Let me sidetrack a bit here.
If any stock picking service tells you that they have a close to 100% success rate on their stock picks and can guarantee you high investment returns, you should definitely stay away.
Even Warren Buffet has loss-making stocks in his portfolio, but he still achieves above-average returns because a few big gainers in the portfolio can make up for the under-performers.
What I like about the Motley Fool Stock Advisor is that they are very open and transparent about their bad investments.
As a member, I can see the performance of ALL its past and current stock recommendations (even for closed positions).
For some other stock-picking services that I’ve tried, they don’t publish the performance of all their past and current stock recommendations, so it’s not easy for you to find out their true track record.
For example, the year 2022 has not been good for high-growth stocks because of rising interest rates and high inflation.
So, you can see a lot of Motley Fool Stock Advisor’s stock recommendations are not doing very well.
The truth is that other stock-picking services are not doing well either because of the stock market crash.
Do I still think it’s worth subscribing to the Motley Fool Stock Advisor?
My answer is yes.
The stock market goes up and down all the time.
Every few years, there is a bear market.
According to Peter Lynch who is a legendary fund manager, far more money has been lost by investors trying to anticipate correction than lost in corrections themselves.
In fact, I think the bear market is the BEST time to start investing in the stock market.
During a bear market, it’s more likely to find great businesses selling at very cheap prices because people are just selling out of fear when the business is still fundamentally sound.
A market crash is a time when huge wealth transfers from irrational and emotional investors to patient and rational investors.
So, if you are thinking of getting into stock investing, I highly recommend the Motley Fool Stock Advisor because I think there are a lot of well-researched stock recommendations with long-term growth potential.
Motley Fool Stock Advisor Pricing
Before we look at the prices, let’s look at what you could get from your Motley Fool Stock Advisor subscription:
- You will receive two stock recommendations every month, as well as their monthly “Best Buys Now“:
- On the first Thursday of the month, you will receive your first stock recommendation
- On the second Thursday, you will receive the first 5 New Best Buys Now
- On the third Thursday, you will receive a second stock recommendation
- and on the fourth Thursday, you will receive the second 5 New Best Buys Now
- You will receive a real-time email notification when it’s time to sell, so you are never left wondering what to do
- You gain instant access to all past Motley Fool’s Stock Advisor recommendations
- You gain instant access to all of their stock reports
- The Motley Fool’s Top 10 Best Stock to Buy Now report features some of their recent picks that still offer the best potential return.
- The Motley Fool’s Top 5 Starter Stock features the ideal stocks that should be the foundation of new investors’ portfolios.
So, how much does Motley Fool Stock Advisor cost?
Its annual membership is usually priced at $199 a year.
Right now, there’s a special discount of 55% OFF on the annual membership for new members when you click the link here to try it out for 30 days with a membership-fee-back guarantee.
So, for $89 a year- that’s just $1.60 a week – you can gain unlimited access to their library of expert stock recommendations.
Is Motley Fool Stock Advisor Worth it?
So, is Motley Fool Stock Advisor worth it?
Okay, let’s first look at how much you can get from $1.6 a week.
As you already know that your Starbucks coffee cost at least $4, “$1.6 a week ” is even less than half of the price of your Starbucks coffee.
So, I would say that it’s really worth it to get Motley Fool Stock Advisor because the value you could get from it far outweighs the cost.
Here’s the best part.
When you sign up for the annual membership, you are protected by The Motley Fool‘s 30-day membership-fee-back guarantee.
What this means is that if you decide Motley Fool Stock Advisor isn’t for you, simply cancel your 1-year subscription within the first 30 days (it’s quick and easy to cancel), and you’ll be promptly refunded 100% of your membership fee with no questions asked.
What’s more, everything you see during those 30 days – the expert stock picks, the best buys now, the premium research and reports – are yours to save and keep.
Who Is Motley Fool Stock Advisor For?
Now, who is Motley Fool Stock Advisor for?
If you are serious about getting into investing and are looking for stock recommendations with long-term growth potential, then I highly recommend Motley Fool Stock Advisor.
So, who should not get Motley Fool Stock Advisor?
If you are looking for stock ideas to make money in the short term (within a couple of days or weeks), then it is not the right fit for you.
Motley Fool Stock Advisor Vs Zacks Premium
First, let’s compare Motley Fool Stock Advisor with Zacks Premium.
Zacks Premium is another stock-picking service that has been around for many years.
So, what is Zacks Premium, and what do you get from Zacks Premium?
Zacks Premium is a paid subscription service to provide stock traders and investors with investment tools and research called “Zacks Rank”(i.e. a type of stock rating)
Unlike Motley Fool Stock Advisor, it does not give you specific stock picks with clear buy and sell recommendations.
Instead, what it does is that it assigns a Zacks Rank to each of the stocks that it tracks to help you make your own investment decision.
Zacks’ stock ranking is founded entirely on one premise:
“Earnings estimate revisions are the most powerful force impacting stock prices.”, according to Zacks’ Founder and CEO, Len Zacks,
So, what that means is that if the stock’s earnings estimate is revised higher, then the Zacks’ rank of the stock will be high.
Conversely, if the stock’s earnings estimate is revised lower, then the Zacks’ rank of the stock will be low.
Also, it gets all the earnings estimates from the brokerage analysts who follow the stocks, so it does not come up with the earnings estimate itself.
Instead, it takes all the earnings estimates and plugs them into a mathematical formula to generate a Zacks Rank every night. (yes, the ranking is updated daily)
There are a total of 5 different ranks:
- Zacks Rank #1 (i.e. Strong Buy)
- Zacks Rank #2 (i.e. Buy)
- Zacks Rank #3 (i.e. Hold)
- Zacks Rank #4 (i.e. Sell)
- Zacks Rank #5 (i.e. Strong Sell)
However, these stock ratings are ONLY for short-term trading (i.e. the next 1 to 3 months), but not for long-term investment.
Publicly traded companies are required to report their quarterly earnings, so the “earnings estimate revisions” indicator that Zacks uses is ONLY valid for at most one quarter.
So, in terms of stock advice, Zacks Premium offers Zacks Rank #1 stocks that are good for short-term stock trading (i.e. it can be used to help you predict the price movement for the next 1 to 3 months).
Basically, these are NOT specific stock trading picks with buy and sell prices.
It’s just a tool (i.e. Zacks Rank) that you can use to help with your own stock trading analysis.
On the other hand, Motley Fool Stock Advisor offers stock picks for long-term investment (i.e. hold the stocks for at least 1 to 3 years) with detailed research reports which outline the reason behind the recommendation.
For all the Motley Fool stock picks, they will send you real-time updates on the stocks whenever there is any news as well as real-time alerts when they think it is time to sell.
So, you won’t be left wondering what to do after you decide to follow their stock recommendation.
In terms of stock-picking strategy, Zacks essentially uses a single indicator called “Earnings estimate revisions” and a mathematical formula to calculate the stock rank.
On the other hand, the Motley Fool Stock Advisor’s research team uses strict stock selection criteria to make stock recommendations.
In terms of track record, the Motley Fool Stock Advisor has a very impressive track record.
As of 2nd June 2022, average Motley Fool Stock Advisor recommendations have returned over 357% since inception while S&P 500 has returned 123%.
For Zacks Premium, it says that it has more than doubled the S&P 500 with an average gain of +25.4% per year from January 1, 1988, to January 3rd, 2022 with the Zacks #1 Rank stock list.
Personally, I find this claim a bit confusing.
First of all, let’s just assume that its subscribers buy the stocks immediately the minute it appears on the Zacks #1 Rank.
Then when do they sell the stock?
Do they sell it immediately when it gets kicked out of Zacks #1 rank, or when it appears on Zacks #5 Rank (strong sell)?
So, what I feel is that Zacks Rank is more of a tool.
And it’s rather difficult to quantify the returns of a tool.
At the end of the day, you need to decide whether you can get a lot of value out of this tool because this is essentially what Zacks Premium is offering.
Although you also get things like a Focus List of 50 stocks selected by Zack’s Director of Research Sheraz Mian, I don’t really fancy this because I don’t even know this guy and his track record.
In terms of pricing, Zacks Premium is charging you $249 a year with a free 30-day trial while Motley Fool Stock Advisor costs $199 a year with a 30-day unconditional membership-fee-back guarantee.
So, if you are a stock trader (i.e. buy and sell stocks frequently and hold the stock for a very short period of time), then you might find Zacks Rank useful in your stock trading analysis.
But, if you are investing for the long term and are looking for good stock recommendations with a proven track record, then I would recommend Motley Fool Stock Advisor.
Motley Fool Stock Advisor Vs Morningstar Premium
Now, what about Morningstar Vs Motley Fool Stock Advisor?
Here are the key differences between the Motley Fool Stock Advisor and Morningstar.
First of all, Motley Fool focuses on stock recommendations while Morningstar offers analysts’ ratings and analysis on stocks, bonds, ETFs, and mutual funds.
For the Motley Fool Stock Advisor, you will get stock recommendations with research reports that detail why its team of analysts is optimistic about the stock.
On the other hand, Morningstar updates and maintains a list of stocks whenever there is a change in analysts’ ratings.
Morningstar doesn’t give you specific stock recommendations, so you still have to do your own research and make your own investment decision.
But, if you are interested to invest in funds or bonds, Morningstar gives you a list of recommended funds and bonds which the Motley Fool Stock Advisor does not.
In terms of performance, Motley Fool has a proven track record with its stock picks outperforming the S&P 500 for the same time period between 2002 and Jun 2022.
- Motley Fool Stock Advisor: 357%
- S&P 500: 123%
On the other hand, Morningstar does not make stock recommendations, so there’s no way to calculate its performance.
In terms of pricing, both Morningstar Premium and the Motley Fool Stock Advisor are quite affordable.
Both Motley Fool Stock Advisor and Morningstar Premium cost about $199 a year,
For Morningstar, there is a 7-day FREE trial, which means you can test-drive its product and services risk-free for one week.
Right now, for Motley Fool Stock Advisor, there’s a special discount of 55% OFF on its annual membership for new members when you click the link here to try it out for 30 days 100% risk-free.
So, for $89 a year- that’s just $1.60 a week – you can gain instant access to Motley Fool’s Best Buys Now.