*** UPDATED August 30, 2019 ***
In this Motley Fool review, I’m going to show you exactly what you get when you subscribe to a Motley Fool service. And most importantly, I am going to show you how their stock picks have performed for me.
I have been a paid subscriber to various Motley Fool stock services for 4 years now. I subscribe to both their flagship ‘Stock Advisor’ service and their newer ‘Rule Breaker” service.
In this Motley Fool review I will share my results of actually buying all of their stock picks from both services for the last 4 years. I will share with you:
- the percentage of their picks that were profitable each year for each newsletter.
- I will tell you the overall results of their picks year after year (if you didn’t BEAT the market by 87.13% since 2016 then keep reading to find out what you missed)
- and I will tell you how those picks are still doing today compared to the market overall.
The results of both Motley Fool’s Stock Advisor service and their Rule Breakers service versus the overall market are quite impressive, but they are quite different.
Keep reading to find out which service is best for your investing objective.
If you read this entire Motley Fool Review, then you it will be easy for you to determine which service is better for you.
I will also tell you 2 important secrets about the Motley Fool services that I have learned over the years. Two little facts that you must absolutely know and understand about their services in order to maximize your profits.
Is the Motley Fool Worth the Money?
To help you answer this question, I will share with you my pictures of my brokerage account that shows you my personal profits (and losses) with the last 4 years of their stock picks, give you my honest opinion, and then you can be the judge.
In short–the answer is YES, it has been WELL WORTH THE MONEY for me based on my results over the last 4 years. Assuming you have some cash to invest, and you can let the money stay invested for some time, it should be well worth it for you too.
In this Motley Fool Review, I will also tell you how to save 50% off their normal subscription fee.
But don’t worry, in this review I’ll cover everything including the good, the bad and the ugly.
I’ll even dive into the details and show you some screenshots of the actual products.
And most importantly, I will show you how their stock picks have performed for me and the differences in results of their two services: Stock Advisor compared to Rule Breakers.
So, keep reading this review of the Motley Fool to find out the TRUTH about their stock newsletters and their performance.
You may be surprised with my conclusion.
Why Did I Write this Motley Fool Review?
I will try not to bore you, but I think it’s important to tell you a bit about myself and why I felt the need to write this review.
My story is probably not too different from yours. I grew up in a modest household where everything we owned was paid for with hard earned money.
I watched my parents work their a** off (excuse my french). Working 60+ hours a week to give our family the lifestyle they thought we deserved. They didn’t get any special treatment and nothing was ever handed to them.
That said, my Father passed away 5 years ago soon after his 65th birthday. He worked hard his whole life and planned a simple retirement at age 65. He never got to enjoy his retirement years…
Since then, I’ve been on a journey to become a better stock investor and build my portfolio so I can retire early and enjoy those years with my wife and daughter.
To accomplish that, I set out on a mission to find the best way to build my stock portfolio the fastest.
Over the last 20 years, I have subscribed to literally dozens of stock newsletters. I have also subscribed to another dozen software and/or charting services that are supposed to give me signals of what to buy.
The truth is, they all worked out just “OK.” With most of the services I found that when the markets were up, my portfolio went up. And when the markets were down, my portfolio went down too.
However, I did find a few stock services that were able to consistently outperform the market year after year. And by ‘outperform’….. I am talking about consistently beating the market by over 20% year after year!
…And that’s brought us both here so I can share my experiences with the Motley Fool stock advisor services.
What is The Motley Fool Stock Advisor and Why Should You Care?
You probably already know a little bit about the Motley Fool and their products.
You may have seen some posts or articles on social media where they provide insights on the stock market.
However, here’s a brief recap of what they do:
The Motley Fool is a stock picking service whose stated goal is to help you learn how to “invest better.”
They advertise heavily, often promoting their Stock Advisor’s staggering 356% return since inception compared to the markets 80% return over the same time period.
For that reason, many consider it the best stock newsletter.
Those returns sound great, right?
Take a look at the chart below….it appears too good to be true.
And THAT is exactly why I wrote this Motley Fool Review–to share the results of my experiences with their services.
About the Motley Fool
The Motley Fool was founded by David Gardner and Tom Gardner in 1993. Their most popular stock recommendation service is called “The Stock Advisor” and was launched in 2002.
The Fool’s Stock Advisor service has only one purpose – to help YOU invest, better.
The Stock Advisor (SA) is Motley Fool’s flagship product.
Every month, the Gardner brothers present 12 US stock recommendations that are sent via e-mail and available on their website.
Here’s how it works:
- Every first Thursday of the month, Tom presents one new stock recommendation.
- On the second Thursday of the month, David presents one new stock recommendation.
- On the third Thursday of the month, Tom presents five of his favorite Best Stocks to Buy Now list.
- And on the fourth Thursday of the month, David presents five of his favorite Best Stocks to Buy Now list.
Here is what one of the recent Thursday “Best Stocks to Buy” emails looked like…
As you might’ve noticed, Thursday is their favorite day.
That’s when new stock recommendations come out. On Thursdays you should be expecting to receive your email shortly after noon ET and you need to be ready to invest.
If you like analogies, you can think of the service as a Hollywood movie…
- The cop (you) knows a confidential informant (The Motley Fool).
- The informant has all the juice (the good stocks to buy) and shares that information with you.
- It all happens in the underground world (the stock market).
Since these stocks have already been analyzed and reviewed by a trusted source, all you have to do is log into your brokerage account and invest!
It makes life easy.
If you have doubts about one of their suggestions or would like to know more about a stock recommendation; you can pull up the coverage page which will display the analysis of the stock.
If you don’t have time to read their entire analysis, you can look on the right panel where they give a “1-Minute” presentation.
I love that feature! Here’s how it looks:
Notice the date of this recommendation…April 20, 2018 when the stock was around $42. I picked this one to show you because it was the Fool’s top performing stock pick of 2018.
Also notice the copy above says it was first recommended in January 2018 when it was around $29.18.
As of August 30, 2019 it closed at $126.50 so that stock alone is up 333%! This is just one of their stellar stock recommendations in the last 12 months that has tripled:
- In January 2018 they also recommended PAYC that is up 174% and in February 2018 they recommended FICO which is up 112%.
- Late April 2018 they also recommended SHOP which is up 204%.
- Early November 2018 they recommended ZS which is up 76%
- In January 2019 they recommended TWLO that is already up 61%
- In February 2019 they recommended APPN which is up 74%
- In March they recommended TWLO again and it is up another 13%
- Their April pick of ZNGA is only 5%
- Their May pick of SNPS is up 15%, and
- Their June picks are up 3% and one is down 10%
- In July, their pick of Zoom Video is up just 2%.
What you should note in the above examples is that it takes a few months for their stocks to move. Generally, it takes a quarter or two of earnings releases to positively surprise the market and then the stocks start climbing.
If those examples were impressive enough, then don’t miss out on their next pick. Here is the link i promised so you can save 50%-
So, Why Should You Care About the Motley Fool?
You should care for several reasons.
First, it makes investing in the stock so much easier and less stressful. Just read their recommendations every Thursday and buy what they recommend. I just buy the 2 NEW picks each month as the “5 stocks to buy now” are usually re-recommendations of previously selected stocks.
Second, as you can see, they really do pick a few stocks each year that double or triple each year. The gain on those stocks more than makes up for a few of their picks that go down a little each year.
Third, if you are just getting started, its a great place to start and learn about the stock market. Financial advisers agree on very few things, but the one thing they ALL AGREE ON is the sooner you start investing in the stock market they better off you will be in a few years.
I’m on a quest to become financially independent. So, I’m going to take all the help I can get to get there faster.
None of us have the time nor the skills to analyze thousands of stocks and then decide which ones are the best ones.
The Stock Advisor (SA) subscription is tailored to the Individual Investor to do exactly that.
I will explain why later on in this Motley Fool Review.
What Do You Get?
As a Stock Advisor (SA) member, you’ll have unlimited access to all of their current and historical best stocks to buy.
The suggested stocks also come with related articles if you wish to read more on the suggestions.
You’ll also get access to their “Favorites” page, which allows you to customize a list of stocks that you are interested in following. That page looks like this:
It also includes “Instant alerts“. They will send you an instant alert as soon as one of these events occurs to a stock in your list:
- New buy alerts
- When it is time to sell (this is huge)
- Large price changes
Additionally, you’ll get have access to the Fool’s research page, which presents premium articles and reports that cover most US stocks.
Their reports page is very interesting and presents numerous trending topics in our society such as virtual reality, self-driving cars, lithium batteries, pot stocks, etc.
For example, they just released (June 2019) a list of “The 10 Best Stocks to Own Today” that present the best opportunities in today’s fastest growing industries.
The Stock Advisor (SA) also includes access to the community page, where you can use discussion boards to communicate with other Fools.
Another interesting concept is the “Foolish Companies”, where the boards are company-based.
These boards are available to premium Fool members and can be useful for talking about investing strategies with fellow community members.
Is the Motley Fool a Scam or is it Legit?
I get this question a lot for some reason… I think it’s because people still have a negative view on the financial industry in general. Of course this view point is justified. But it’s still an easy answer: the Motley Fool & their Stock Advisor service is DEFINITELY NOT a scam.
Of course it’s not perfect and won’t be for everyone. But, they definitely are a legit company. I’ll cover more about the pros and cons a little later on.
I also think people may get the wrong impression if they stumble upon tweets like these:
However, you can find those tweets about anything these days!
The fact is, the Motley Fool stock picks have beat the market the last 4 years. My results shown below prove it. That is the most important thing you need to know. Also, they have been in business since 1993 and employ 250+ people. And they currently have 600,000+ subscribers to their Stock Advisor service. 600,000 people can’t be wrong!
Not to mention I’ve been a customer for over 4 years and I am very happy I subscribed because of the performance of my stock portfolio. I just wish I had subscribed earlier.
I know for a fact it is not a scam–my stock portfolio proves it! I get all of the emails I am supposed to get, and I have even met a lot of their employees at various investor education conferences that I travel to.
Like I said earlier, I subscribed because I saw their advertising about their great returns, and I had to subscribe to test it out myself.
Of course, as an investor, you should feel free to do your own due diligence and investigate the company before taking any investment advice.
But, for the benefit of people reading this Motley Fool review, here are the FACTS from my Motley Fool Review:
- There’s no question is a legit company that is very well known among investors. They say they have over 600,000 subscribers.
- I subscribed in 2016 and my results are listed below in the next section. Here is the summary–every year for the last 3 years they have beat the market by more than 20%:
- The average return of their 24 picks for 2018 is 52% which is 44.15% better than the SP500;
- the average return of their 24 picks from 2017 is 56% which is 30.68% better than the SP500; and
- their 2016 picks are up 135% compared to the SP 500’s 48% so those 24 stocks have beat the market by 87%!
3. They even have their own mutual fund, which is the “Motley Fool Global Opportunities Fund Investor Shares (FOOLX)”. I don’t have any comment on that fund as I haven’t reviewed it yet.
4. Also, the Fool Brothers don’t try to hide from their customers. Which is always a good sign.
They are very active in the investment community.
For example, they often have interesting ideas on their certified Twitter page.
For example, one day a few months ago the market was having its worst day in 8 months.(yikes!)
The Motley Fool then tweeted an idea on two blue chip stocks that can help us through that market downturn. Thank you Fool brothers!
The Gardner brothers are also active in the traditional media where they appear on news websites such as AOL News.
Here is an interesting piece on their ups and downs with Amazon.com (they first purchased it in September 1997!)
Now, regarding their Stock Advisor (SA) service, you’re not the first one to have asked this question.
I’ve subscribed the Fool’s Stock Advisor (SA) service for more than 4 years now and I can again reassure you that this is not a scam.
Like many other financial and investment research firm, The Motley Fool has a stock advising service that can be canceled at any time.
Here another testimonial from a customer given on Stackexchange, proving even more how it’s not a scam.
“I’ve had a MF Stock Advisor for 7 or 8 years now, and I’ve belong to Supernova for a couple of years. I also have money in one of their mutual funds. “The Fool” has a lot of very good educational information available, especially for people who are new to investing. Read full testimonial“
Now that we’ve beaten that myth to death, let me tell you what you really want to know.
Will it Help you Make More Money?
The short answer is YES.
That’s proven by their past performance. As I mentioned above, each of their last 3 years their stock picks have outperformed the market by over 22%.
I subscribed in 2016 and my results are as follows (updated as of August 30, 2019):
- Of their 24 stock recommendations from 2016, 19 are up, and the average of all 24 picks is +135%.
- For 2017, 22 of their 24 picks are up with an average of +56%.
- Of their 24 picks from 2018, 18 are up with an average of +53%.
- YES, that means the last 3 years they have outperformed the market by and unbelievable 87% in 2016, 31% for 2017 and 44% for 2018.
That is why they are consistently rated as the best stock picking newsletters.
Motley Fool Review – Some Additional Insights
1- It is true that there are many free options to explore, but after testing a bunch of them (I paper traded multiple stock advising services), the Motley Fool provided the most optimal returns and the best bang for the buck.
2- The Stock Advisor is usually $199 a year, but if you are a new subscriber visit this new subscriber page to get it for just $19 with a 30-day 100% membership refund period.
3- There is definitely a “Fool Affect.” With 600,000 subscribers, you must understand that the stocks they recommend do tend to go up about $2 within the first hours of the release of their recommendations. So be ready on Thursday to buy as soon as you get the email.
4- Like with any other investment advisory firm, it’s true that their investment strategies are not 100% guaranteed. From what I have experienced in the last 3 years, they do seem to pick one stock a year that goes down 20-30%. Sometimes they bounce back, and sometimes they don’t. They will, however, let you know when they want you to sell it. My recommendation would be to place a stop loss order based on your risk aversion with trailing percentages and/or fixed prices.
5- After paper trading their stock picks for 6 months, I eventually had the confidence to start buying their picks in my Etrade account. Here are a few screenshots of my account that show the date I bought them and the returns. Notice the TWLO was recommended twice so I bought it twice:
I also feel that their service is very cheap compared to other alternatives that don’t perform as consistently. (Zack’s Investor service is 3x the price)
How Much is a Motley Fool Membership?
The Stock Advisor is now available at its lowest price ever. Last year I paid $199 and if you go to their website you will see the full retail price is $199. BUT–They do run pricing promotions of $19 a month or $99 a year. Either way you can cancel in 30 days and get a full refund. You will also get their “BEST 10 STOCKS TO BUY TODAY” list when you subscribe…
Does the Motley Fool cover Penny stocks?
No, the Motley Fool Stock Advisor (SA) focuses on blue chip stocks, which are large & well-established companies in their respective industry. They do NOT review or recommend penny stocks.
Penny stocks are stocks of small publicly traded company that are trading at very low prices per shares (5$ or less in general).
Such stocks are usually highly volatile.
For penny stocks, I would suggest looking into Timothy Sykes, a penny stock trader who made $1.65 million by day trading as a university student.
Tim is now a financial educator and activist, where he donated $1 million to build schools in countries such as Ghana, Indonesia, etc.
He has a couple of teaching segments that you might interest you:
- Tim Sykes teaches Penny stocks
- Superman Trade alerts and premium research
- Guru – learn from proven profitable traders
- Analyze your trades
Is the Motley Fool Good for Technical Analysis?
No, definitely not. Technical analysis involves analyzing trade volume and prices and then trying to forecast the direction of stock prices.
The Motley Fool Stock Advisor service is based on the fundamental analysis, which is the study of a company’s financial statements, their competitors, the overall health of the economy, etc.
When investing for the long-term, it is best to analyze a stock’s fundamental, which can define the strengths, weaknesses and overall value of a company.
With the Motley Fool’s stock advisor (SA), the fundamental examination has already been taken care of, where you can read the analysis in their stock reports.
However, if you are an enthusiast of Technical Analysis, you can always perform your due-diligence with the Fool’s recommendations.
Is it Good for Day Traders?
Nope. Day Trading involves buying and selling stocks on the same day. The Motley Fool recommends stocks they want you to hold stocks for years, not minutes.
I personally believe it is hard to be successful as a day trader.
Think about it- You would have to put a heavy amount of cash on one single position and make round trip transactions on one day to be profitable.
As an individual investor, I wouldn’t be comfortable having a large position on one stock. The Motley Fool’s Stock Advisor (SA) is a service that is not suited for day trading.
It is more focused on buy & hold portfolios that is seeking capital growth. This involves a lot less stress and growth for the long-term.
Will it Make Me Rich?
It depends – How much do you invest? How will the Fool perform this year? What will the market overall do?
Rich is relative.
So, will the Motley Fool Stock Advisor (SA) make you rich?
My answer to this question is that over the next few years it should make you “richer” than if you didn’t subscribe!
Then What is it Good For?
I believe this is the easiest way to enter the world of investments and trading.
Being exposed to the Motley Fool’s stock recommendations and what the Gardner brothers have discovered will help you pinpoint what is essential in building a profitable portfolio.
Whether it’s for general knowledge of the market or for using for investment purposes, I believe the Stock Advisor is a tool that you should have in your trading bookmarks.
You don’t need a fancy degree or a job at Goldman Sachs to make money in the stock market.
The Motley Fool has made it easy and affordable for the regular Joe/Jane to start investing and to start making real returns.
Motley Fool Review Conclusion…
So… is the Motley Fool Stock Advisor worth it?
The short answer is YES.
If you skipped my entire review and came right down to the conclusion, (Good for you; I would probably do the same…) then here is my summary…
Of all the stock subscriptions I have tried over the years, the Motley Fool Stock Advisor gives you the greatest bang for your buck and is most definitely worth the cost.
I’ve been a paying customer for over since 2016. I buy $1,000 worth of each of their 2 specific stock picks every month. Here is a summary of the performance of the Motley Fool’s stock picks since January 2016.
Since I started subscribing in January of 2016, here are their top stock picks:
- SHOP is up 1,092%
- MTCH is up 685%
- OKTA is up 33%
- TTD is up 285%
- APPN is up 185%
- PAYC is up 260%
- And their WORST stock picks is STMP which is down 53.70%
The $24,000 invested in 2016 has more than doubled to $56,577. That is 135% return in less than 3 years.
Also, the $24,000 invested in 2017 has grown 55.68% to $37,363 and the $24,000 invested in 2018 has already gone up 52.65% to $36,628.
Over the last 3 years, 84% of the stock picks have been profitable. So they are not perfect. BUT, they do have a nice history of picking a few stocks each year that double or triple and THAT is what makes their picks so good. Take a look at the BEST STOCK column above and you will see. Also note that the BEST STOCK more than makes up for the WORST STOCK each year.
Remember– you can save 50%-
Since I started, my portfolio has outperformed the SP500 by at least 27% each of the last 3 years so I can definitely say it’s been worth it.
The biggest negative I experience is:
- With over 600,000 subscribers, there is definitely a Fool Effect on the stock prices. Within the first few hours of getting a recommendation, the price of the stock typically shoots up $2 or $3 so I have learned to get my order in quickly.
P.S. If you use this link, you will get a 50% discount. (I don’t know how long it will last…) Click Here
If you did read my entire post and want the more details as to why I’m recommending it, let’s get started.
So How Does the Motley Fool Stock Advisor Service Compare to Their Rule Breakers Service?
The Rule Breaker service works in much the same way as Stock Advisor. The differences are:
- Rule Breaker’s picks are coming from just David Gardner and his team
- You still get usually 2 new stock picks per month
- But these picks focus on high-growth stocks that they feel are poised to be market leaders
- The results of Rule Breakers stock picks are MUCH MORE VOLATILE than the Stock Advisor’s picks
- Over the last 4 years, the Rule Breakers picks have outperformed the Stock Advisor’s picks
- The biggest winning stock each year has a much bigger gain than Stock Advisor’s biggest winning stock each year
- But their biggest LOSING stock has a much bigger loss than Stock Advisor’s biggest loosing stock each year
- Their profitable pick percentage is lower too, so fewer of their stock picks actually go up compared to Stock Advisors
- BUT, because of the great success of a few of the Rule Breakers picks each year, if you bought all 24 of their picks each year your portfolio would be about 8% higher with Rule Breakers than with Stock Advisor’s.
Conclusion: Rule Breakers picks have higher returns, but more variance as well. So if you missed out on just one Rule Breaker pick each year, your results could be significantly worse.
For more information on Rule Breakers, see our Motley Fool Rule Breakers Review article.
The Math Doesn’t Lie
The reason I think the Motley Fool services are worth the money is because it pays for ITSELF! That means it’s basically free. The math is very simple…
If you take advantage of this offer now, then the service will only cost $99/year or $19/month.
That means that in order for it to pay for itself, it only has to produce 1 trade that makes at least $20.00.
Here’s an example: If I invest $1,000 in each of their 24 recommended stocks each year and the average stock increases by only 1.0% (that’s peanuts…), then I would make $240 a year. If you invest only $500 in each pick then you would still make $120 a year.
The reality is their picks have been up at least 30% each of the last 3 years so if you had invested $1,000 in each of the 24 picks per year you would make $7,200 a the first year, $14,400 the second year and roughly $21,600 the third year. And if you had invested just $500 in each of their picks you would have been up 1/2 that.
The math doesn’t lie.
It’s a no-brainer when you take a closer look into the Math.
The reality is that because of the Fool’s service, i was able to invest in Amazon 3 years ago!
Back then, Amazon was trading at about $330.
Now, Amazon is trading at roughly $1900!
That’s a 475% gain in only 3 years!
Again, the Math doesn’t lie…
So, that’s why i felt i had to write this review.
Many people have when people asked me if I am pleased with the Motley Fool’s service. My answer is always ABSOLUTELY.
That is, until the day that the math doesn’t work out…
I don’t have any emotional connection to the Fool’s Stock Advisor product. So, as long as I am making more money than it’s costing me, i will recommend it.
As soon as it’s stop working for me, I’ll be the first to tell you.
Let me know what you think in the comments.
If i missed anything or if you have any questions about my Motley Fool Review.
Have you had success with the Fool’s Stock Advisor service?
If so, i want to hear about it, drop me a comment below.
P.P.S. Don’t forget, the Motley Fool service is on sale right now. Here is the link.