Motley Fool Review 2021: Market-Beating Stock Picks

Full Review

The Motley Fool is perfect  for those who want to take their stock portfolio to the next level. Through its services such as Stock Advisor, Rule Breaker, and Rule Your Retirement, The Motley Fool is helping people improve their returns and even beat the market.

The Motley Fool is Best For:

Why The Motley Fool?

Successful stock picking is no small feat. And even if you manage to do so, it can be time-consuming. Nevertheless, investing is a key part of personal finance. In this Motley Fool review, we’ll see if The Motley Fool Stock Advisor program and its other services are up to the task.

The Motley Fool offers many premium services, including:

We will touch on several of these during the Motley Fool review, but the focus will be on the Stock Advisor program. Thus, this will also be a Stock Advisor review.

After all, Motley Fool’s Stock Advisor program is the company’s flagship product. That’s because it helps you beat the market with its simple style of stock picking.

But does it work? Continue reading the Motley Fool review to find out more.

Motley Fool Review: What Is The Motley Fool?

David and Tom Gardner founded The Motley Fool, an investment advice company, in 1993 along with Erik Rydholm. It offers a number of products that offer stock tips for its subscribers. The company calls Alexandria, VA its home.

The Gardner brothers still run things today. Thus, they continue to provide investment advice through articles, investment newsletters, and webinars.

The Fool helps new investors make better stock picks with its investment newsletter, Motley Fool podcast, YouTube videos, and more. The company is known for being outspoken on social media.

If you have ever done research on investing services, you’ve likely heard of The Motley Fool. If you’re like me, those things might be both good and  bad. At any rate, The company doesn’t take itself too seriously (hence the name). It makes for a great experience if you’re a subscriber.

It gets its name from a court jester in Shakespeare’s As You Like It. Still, this Fool has had some serious success investing in the stock market.

In spite of this, Fool has had its ups and downs. Due to the dot-com bubble, the company lost about 80% of its staff. Nevertheless, The Motley Fool pressed on and is doing better than ever.

Then in 2002, shortly after the dot-com bust, it introduced Stock Advisor program. Since then, the service has become its most popular product. In this Motley Fool review, we will see why each stock pick has made investors so happy.

In order to select its investments, the Gardner brothers rate each stock by asking 25 questions. Each “no” answer moves the stock up the risk scale.

The higher up the stock moves, the more “crushable” the stock is, meaning the more likely it is the company will crush under pressure. Among its currently active stock recommendations, the highest risk rating is 18.

Here is the risk scale:

Really, the Motley Fool Stock Advisor program has a high success rate. These returns are rarely seen elsewhere. As you will see in this Motley Fool review, investors aren’t just buying into the hype.

In fact, Fool has updated these numbers over the past couple of months, and they have actually gone up. That is despite the uncertainty in the market due to COVID-19 and everything else going on. Still, Motley Fool stock picks have remained strong.

How Good is The Motley Fool?

The Motley Fool uses a long-term investment strategy for its service, which we’ll see in this Motley Fool review. But they recommend specific stocks instead of exchange-traded funds (ETFs) or mutual funds. Many passive investors in the personal finance world recommend ETFs, but stock picks can be powerful.

And the co-founders have seen some impressive results with their picks. Specifically, here are the returns each has recorded since Fool’s founding (as of 04/26/21):

Tom Gardner: +305.9%

David Gardner: +849.8%

S&P 500: +129.4%

The number you see above, 578%, is an average for all Stock Advisor recommendations since the service was created. That’s much higher than the S&P 500, as we’ll see. Meanwhile, the brothers’ individual returns have been quite different, but they’ve seen great returns overall.

Motley Fool Stock Screener

In order to help you find the best investments, there is also a Motley Fool stock screener. This tool is both a free stock screener as well as an investment community.

The stock screener allows you to find stocks using several filters, including asset class, sector, and volatility.

You can also filter by “conviction,” which reflects how their analysts feel about each stock.

Motley Fool CAPS allows you to research financial metrics on companies and also lets you see star ratings. These ratings are set using stock picks from individual Motley Fool members. Thus, you’ll get insight from thousands of members to help you make a better stock pick.

Motley Fool Stock Advisor Program

As this is Fool’s flagship product, here we will have a quick Fool Stock Advisor review. This is a solid and affordable product that’s great for beginner investors.

The Motley Fool Stock Advisor service is a stock-picking subscription service. This stock-picking service provides two new stock picks per month.

We’ll cover what subscribers love about it in this Stock Advisor review. The average investor doesn’t have time to research their own stock picks, and that’s where this program comes in.

Tom and David launched it in 2002 because they knew there was a need for a better stock-picking service. And many “Foolish” investors even beat the market using their stock tips.

The result? The Stock Advisor program has been a huge success for the company and investors alike. And it’s a great way to start investing in stocks.

Motley Fool stock picks are updated every Thursday. Hence, the Gardners can save you a ton of time.

Here, Motley Fool co-founder David Gardner talks about the simple investing strategy of Stock Advisor:

It takes a while to understand the ins and outs of a company, which is why Fool’s updates are so helpful. And the Motley Fool doesn’t just look at a few numbers here and there.

Instead, they do a deep dive and review of every company, performing in-depth technical analysis. Only after a company meets their strict requirements do they decide to recommend it. In reality, they probably process a lot more information than the average investor wants to see.

If you are a new investor, this would be a huge undertaking. Therefore, a Stock Advisor subscription can be well worth it. Get The Motley Fool’s Stock Advisor picks here.

Motley Fool Stock Picks

The Motley Fool is not a service for day traders, nor is it one that focuses on investing in mutual funds or ETFs. Instead, its strategy centers around a buy-and-hold investment strategy.

In other words, you buy stocks and hold them in your brokerage account for a long time. Ideally, you would hold them for at least 3-5 years. Hence, the Stock Advisor program helps you find the best stocks to buy for 2021. For the purposes of the typical investor, this is a great strategy.

And many of their choices are what investors would call “blue-chip” stocks. Specifically, blue-chip stocks are from established companies with a history of strong returns.

As a result, you can expect established companies like Zoom Video (ZOOM) and Netflix. Another popular recommendation, Shopify (SHOP), has seen its share price increase by over 2,000% in the past five years.

However, you may also see some stock picks you wouldn’t have expected. And that is where the real value is.

One of the first things you’ll see is Stocks to Buy Today. On this screen, you’ll see The Motley Fool’s latest stock picks. As the name implies, these Fool’s hottest stock picks at the moment.

You may notice that some of the stock picks above are blurred. We do this to protect the integrity of the program, but you can see below the real-world performance of my Motley Fool stock picks.

As we go through this review, you will see why investors can be confident in Stock Advisor picks.

How Often Do You Receive Stock Picks?

Motley Fool Stock Advisor subscribers receive two new stock picks each month. While that may not sound like much, it’s more than enough when you buy and hold.

In fact, your brokerage account may remain static other than stocks they recommend selling. However, the performance is well worth it. And if one of the stock picks is no longer worth holding, Fool recommends selling that particular stock.

The Gardners always give an in-depth explanation for their sell recommendations as well. Therefore, you’ll be able to understand their sell decisions.

Motley Fool Recommendations: A Closer Look

Each time Fool’s Stock Advisor makes stock picks, it provides in-depth investment research along with the stock pick with plenty of analysis. That will be invaluable if you’re a member.

Consequently, subscribers can understand the specific characteristics as well as potential market factors that led to the pick.

That’s a nice perk to have because these analyses can help you understand the specific factors that make the stock picks worth buying.

Even if you aren’t interested in picking winning stocks on your own, it is helpful to know the “why” and not just the “what.”

Fool is very thorough in the research it provides on its Stock Advisor picks. Moreover, it uses various factors to show the strength of each stock pick.

Motley Fool’s Stock Advisor Performance

A Stock Advisor review wouldn’t be complete without looking at the performance of its recommendations. I mentioned above that each of the co-founders has done quite well and easily beat the market and index funds as well.

Specifically, the average return for Stock Advisor picks is over 587% cumulatively. In other words, each of their picks have increased by almost 6x in value since their initial recommendation.

This does include their picks dating back to 2002, but those are still pretty impressive results.

And that continues into 2021, with each founder’s picks performing extremely well. We’d be remiss if this review didn’t include Motley Fool Stock Advisor’s performance.

Although the economy was chaotic throughout 2020, Fool’s picks remained strong. There was a significant dip in March, but things quickly rebounded. Indeed, Tom and David Gardner continue to have a strong track record with their picks.

Stock Pick Performance

Now, let’s take a look at the Stock Advisor Performance screen to see how Motley Fool’s picks are doing. First, you see once again how each Gardner brother has done compared to the market. Then you see a list of stocks, along with the date and who recommended it.

Given how lucrative the stock picks can be, the Motley Fool Stock Advisor subscription service is a great deal. After all, you pay just over $16 per month. And that is even after the price increase. Equally important, the majority of of the team’s recent picks have positive returns. One is as high as 82.3%.

There is various other information on the screen, such as return for the stock since it was recommended. You’ll also see the S&P 500 return during that same time period.

The whole list is sortable to help you find information on different stocks. And if you see something you like, you can add it to your favorites to purchase later.

Some notes about the 13 stocks shown above:

• All but one has a positive return.
• The average rate of return is 29.33% (including the one loser)
  • The average S&P 500 return during the same time period is 9.21%.
• The average adjusted share price is $178.32. (Adjusted simply means the share price is adjusted for dividends and stock splits on the day of closing.)
• The average market cap is $41 billion. For reference, large-cap is anything $10 billion and above, so these are not small, teetering companies. Market cap is calculated by determining the total share value of the company’s stock.

Does This Help My Portfolio?

These are encouraging figures, and the real-world data proves it.

For instance, this graph shows the hypothetical growth of $10,000 in Fool’s recommended stocks:

What we see in this graph is that an investment in the S&P 500 would have grown to nearly $50,000 in 18 years.

“5x growth? That’s amazing!” you might think. And yes, that is quite good by most standards. Nevertheless, the S&P 500 doesn’t hold a candle to the Motley Fool Stock Advisor program. Each stock pick from the program has been much stronger.

Using Motley Fool stock picks, your $10,000 investment would have grown to around $250,000 in just 18 years. Yes, that’s 25x growth. Clearly, the Stock Advisor program has done amazingly vs. the S&P 500.

According to a FINRA report, 38% of US households don’t invest at all. While there are socio-economic factors at play, there are likely those who have simply chosen not to invest. Thus, if you want to start investing in the stock market, The Motley Fool is a great starting point.

I haven’t yet invested a huge amount of money, but I do maintain a portfolio of Stock Advisor stocks in M1 Finance. So, why haven’t I invested more? Frankly, it’s only because I don’t quite have the cash flow for it.

In fact, I started investing in June 2020, and here’s what my returns look like:

The money going in is small so far, but I feel pretty good about what I’m seeing from Stock Advisor. That being said, I hope to invest more in the future. This is allowing me to beat the market so I would love to put more money in.

Motley Fool Rule Breakers

This service is very similar to Stock Advisor, which we talked about earlier in the review. The major difference between this service and the Stock Advisor program is that David Gardner picks the Rule Breakers stocks.

This service specifically invests in high-growth stocks. You might notice that the cumulative returns are a bit lower for this program, but remember that it launched in 2005.

On the other hand, Stock Advisor has been around since 2002. And David Gardner’s picks as part of the Stock Advisor program have had an 800%+ return during that time.

Just like with the Stock Advisor program, you’ll get:

Although the service has lower returns than Stock Advisor so far, it also hasn’t been around as long. As we know, more time allows for more time to compound. It will be interesting to see how Rule Breakers stock picks perform in the next few years.

Features and Services

In addition to the obvious benefit of the Fool’s monthly stock picks, there are more features and services subscribers can take advantage of. Let’s take a look at them now.

Starter Stocks

Starter Stocks are exactly what they sound like. Thus, they are perfect for someone who is new and wants to start building a portfolio.

Fool compiles this list annually. It consists of stocks that are not only perfect for building out a new portfolio but can also strengthen existing ones.

Without a doubt, this list is quite useful for any investor. Sure, you see Stocks to Buy as you log in, but I couldn’t tell if these were good for a new portfolio. 

And one of the best things about Starter Stocks is these aren’t just trendy stocks; they are stocks you can hold for the long term.

In the Starter Stocks report, you’ll find stocks like Amazon (ticker: AMZN), Apple (AAPL), and Netflix (NFLX) plus some you may not have considered.

News & Updates

As a subscriber, you’ll have access to frequent articles and their investment newsletter to keep you updated. And in a world like the financial market, it can be a big help to have access to these details.

While these updates include buy and sell recommendations, they also touch on other topics, such as:

These are just some of the categories, but this gives you an idea of the type of content that is published regularly.

Generally speaking, you’ll see at least one of these articles every 1-3 days. However, you may occasionally see multiple articles in one day. By and large, the market can be chaotic and unpredictable, so it makes sense.

You may see some email offers with a product upsell sent to your email address here and there, but there are options to opt-out from each type of email if you’d rather not receive them.

Community Forum

You’ll also gain access to a community forum on the website that allows you to discuss a variety of topics with other investors – from very basic to more advanced.

The forum has quite a bit of activity, too. As such, you’ll be able to get a lot of your questions answered on the message boards.

Motley Fool’s Stock Advisor Reports

As a subscriber to the Motley Fool Stock Advisor service, you’ll gain access to Stock Advisor reports, which are very useful content. These reports contain lots of information such as the share price and the company’s track record. Plus, they are yet another way you can get an in-depth look at the inner workings of the stock market.

In addition to general stock market analysis, you’ll also find reports from Tom and David Gardner. They include some of their most recent picks and why each of the stocks mentioned are a buy.

These reports come in article format but often highlight short-term trends in the financial industry. For example, one recent report is about a stock recommendation for the cannabis boom.

Other times, the reports provide forecasts and predictions and various stock tips. Join to get the latest Stock Advisor reports.

My Favorites

The Stock Advisor program allows you to maintain a list of favorite stocks. In particular, you can add stocks to your favorites a few different ways, including:

• The Stocks to Buy Today list
• Searching within the My Favorites list

You will often receive emails with the latest buy alerts and sell alerts at the email address link to your account. Or, if you prefer, you can visit the website and see all the latest stock picks. If one of your favorites has a big price change, you can opt to receive instant alerts letting you know.

The site does let you set stocks as favorites and has a “buy” button, but you can’t buy directly through The Motley Fool’s website. Instead, you’ll have to use your own brokerage account.

However, if you use Fidelity, it does have the option of linking your Fidelity brokerage account to make things slightly easier.

How Much Does it Cost?

One of the best things about Motley Fool Stock Advisor service is just how affordable it is. And if you use the button below, an annual subscription is just $99 (50% off) for your first year. It really isn’t a lot of money for what you get.

After that, the membership fee goes up to $199 for a Motley Fool subscription. That is still incredibly cheap. Truly, this is a low-cost service that is worth the money.

Here is the full breakdown of the regular prices for common Motley Fool services:

When I signed up for the Motley Fool Stock Advisor service, I saw the Motley Fool prices for a new subscriber:

I would not recommend signing up for one month for two reasons:

1. Monthly cost. The most obvious reason is how much higher the monthly cost is. At $39/month, you would pay $468 per year. That’s a lot more money than paying annually.
2. Money-back guarantee. The Stock Advisor program comes with a 30-day money-back guarantee. Therefore, you can get a full refund within 30 days if you aren’t satisfied.

The Motley Fool Rule Breakers cost is $299/year, but you can still sign up for $99 for the first year.

Customer Service

If you have any questions or concerns, you can contact customer service using the contact form on their website. There is also a Motley Fool contact number, (877) 629-2589. You can call this number to get your money back for any reason.

There is also a Motley Fool forum where you can post less urgent questions.

How Does It Compare?

Another way this Motley Fool review can help is to compare it to other popular investment services. Let’s see how it stacks up against the competition.

On one hand, Stock Advisor is best for passive investors who want guidance on stock picks. On the other hand, Zacks Trade is best for active and semi-active traders.

Plus, Zacks is actually its own broker, meaning you can buy stocks on its trading platform. Stock Advisor doesn’t have that convenience.

But given that Zacks is for more active traders and investors, this makes sense. If you couldn’t trade directly on the platform as an active trader, it would be too much back-and-forth.

Because Zacks Trade is a broker, it has its own trading interface. And its interface is technical in nature with lots of graphs and granular reports.

The Motley Fool’s Stock Advisor service has plenty of in-depth reports and articles, but they are meant to help investors beat the market on other platforms. Plus, they help you understand why the Fools makes the stock picks it does.

Both services are great, but which you should use depends on your preferred style of trading.

The Motley Fool vs. The Street

Action Alerts PLUS is slightly more expensive than The Motley Fool; it has different prices depending on how much time you commit to, but the cheapest plan is $250/year.

If you haven’t heard of The Street, it was founded by Jim Cramer. He’s best known as the lively personality behind CNBC’s “Mad Money.” As such, Action Alerts PLUS gives you insight into Cramer’s stock portfolio and what he likes at the moment.

He does have a team as well, and a subscription gives you an insider’s look at the whole portfolio constructing process.

The biggest difference between the two is the trading style. You may know Cramer for his “Sell! Sell! Sell!” proclamations.

Indeed, AAP stocks are sold more frequently. While Stock Advisor will tell you to sell occasionally, the team at The Motley Fool is a bit more measured in its recommendations.

Thus, which one is better depends upon the trading style you prefer and which is more suited to your personality.

The Motley Fool vs. Robo-Advisors

Robo-advisors have been more popular with investors in recent years. For this reason, services like Betterment have become household names that most investors know.

These services are what is referred to as digital investment advisory programs, as the SEC puts it.

It’s not a big surprise how popular robo-advisors have become. After all, many investors don’t want to spend lots of time picking stocks. And with a robo-advisor, all they have to do is answer a brief questionnaire, then deposit money regularly.

Investors don’t have to worry about researching stocks or executing individual trades. Instead, the robo-advisor puts your money in a diverse set of ETFs with built-in diversification. That means it’s less work, and returns are relatively stable.

So, what’s the downside of robo-advisors? The most obvious one is returns. While your money should grow in the long run, the return will likely be lower than you’ll see with Stock Advisor.

In addition, you can’t be selective with your investments. Indeed, some investors don’t like ETFs because they won’t be able to avoid the “loser” stocks.

Plus, ETFs make it more difficult to invest in a socially-responsible way. While robo-advisors like Betterment are adding socially-responsible investments, you will always have less control with a robo-advisor.

Of course, Stock Advisor has its downsides, too. After all, investing in individual stocks can take longer, and can be more volatile, too.

Overall, deciding between Stock Advisor and a robo-advisor is about how much risk you can tolerate and the returns you want. Plus, not everyone is comfortable managing their own portfolio.

Motley Fool FAQ

By this point in the review, you might still have questions about The Motley Fool, so I wanted to answer some of them. Here are some of the most common questions you ask:

Is The Motley Fool Legitimate?

The Motley Fool is 100% legit. They have been around since 1993 and are based in Alexandria, VA, just outside of DC. The company has a long track record of successful stock picking.

Moreover, they provide a quality service, and the subscription isn’t too costly. There is a ton of information on the website and the program is well worth the money.

Plus, the founders have created a number of YouTube videos to help you get to know them better and better understand their mission. It offers a variety of services including Stock Advisor and Rule Your Retirement. It even has its own index funds, FOOLX and FOIIX. There is also a Motley Fool ETF, TMFC.

Above all, Tom and David Gardner’s goal is the help every member get better returns.

Track Record

As mentioned earlier in the Motley Fool review, the company has been around since 1993 and has a long track record of success. The fact that it’s not a flavor of the month company is one of the best ways to know it is legit.

The Fool Stock Advisor service has been around since 2002 as well. Hence, it has almost 20 years under its belt. That alone is quite a bit more history than most robo-advisors and other fintech companies have under their belts.

Transparency

Tom and David Gardner are upfront and honest about Motley Fool’s Stock Advisor program and their stock-picking recommendations. That is beneficial if you are a subscriber.

For instance, when you go to the Performance screen, you can see all previous picks the Stock Advisor service has made since its inception.

Not every stock pick has been a winner, but they openly disclose all of their winners and losers. As a subscriber, you will have all the information you need to make informed decisions.

Is The Motley Fool a Pump and Dump?

The Motley Fool Stock Advisor program is not a pump-and-dump. David and Tom Gardner actually own Stock Advisor stocks—they aren’t just trying to short these companies. In fact, as David notes in the video above, they own the stocks they recommend for at least five years.

And they don’t own these stocks for a short period of time. Instead, they buy and hold each stock pick for the long term. If they ever do sell a particular stock, they will let you know via their sell alerts. That means you’ll receive an email at the email address you provided.

However, that only happens when a company starts to perform worse than expected. The overall strategy is to buy and hold, best for long-term investors.

So, no, the service is not a pump-and-dump by any definition of the term.

Is the Motley Fool Worth it?

Yes, The Motley Fool is worth it. In fact, it is a reputable company that’s been around almost 30 years. Indeed, The Motley Fool is worth the money. Not every pick will be a winner with this service, but it’s a great value and has more than paid off for thousands of members.

There is nothing dubious or suspicious about The Motley Fool. If you start with the Stock Advisor service, you pay a modest fee for superb stock picks. At the end of the day, isn’t that what most of us want with a service like this? To elaborate, let’s take a look at some Motley Fool reviews and complaints from the online community.

Motley Fool Ratings and Complaints

Trustpilot gives The Motley Fool a 3.2/5. While that review may not sound spectacular, most of the feedback consists of five stars (42% of the total). Here are some of the positive Motley Fool opinions you will find there:

As with many marketplace-style review sites, there are just a few two four-star reviews. The second-largest number are one-star customer reviews. But these one-star reviews tend to give what sound like minor complaints or are entirely suspect.

For example, a Motley Fool complaint says “In summary what you receive is slightly more information than from their emails and website.” That seems to be this reviewer’s biggest complaint.

Overall, the feedback is largely positive. That should make investors feel good.

However, the Fool has a staff member providing in-depth, detailed responses to many of these reviews. That shows they don’t take low ratings lightly and value each and every customer’s input.

Many people complain about marketing emails, but you can always opt out.

So while not every customer is completely satisfied, I see little reason to believe this service is a scam. In fact, it’s one of the top stock-picking services out there. It’s really a great experience overall.

How Do I Cancel The Motley Fool?

Although we stand by this service as a great value and well worth the money, things do happen. If you ever want to cancel your Motley Fool membership for a full refund, the best way is to call customer service at (844) 611-9905. Representatives are available to help between 9 a.m. and 4:30 p.m. eastern time.

You can also use the contact form on the Motley Fool website.

How Do I Sign Up?

Signing up for the Stock Advisor program and other services is easy. All you have to do is head over to the premium services section, select the service you want, and that’s pretty much it.

Once you enter your name & billing information and select monthly or annual billing (note: annual is a much better deal), you’re be all set.

Note that a credit card number is required when signing up for this service.

As you can see, getting signed up is very simple. It only takes a couple of minutes.

Is The Motley Fool Right for You?

The Motley Fool is a great value and has the data to show it’s been largely successful. Although there have been a few hiccups along the way, the company continues to see long-term success. Tom and David Gardner have created a quality program and it’s been a great experience for me.

After all, the numbers don’t lie. It has a phenomenal track record and has helped investors beat the market regularly. Indeed, Motley Fool’s financial advice has been excellent.

The founders have had a combined 4-500% historical return (compared to ~100% for the S&P in the same time period). That alone shows just how successful they have been with their investment newsletters.

Of course, you should be aware of the potential risks – individual stocks can be more volatile than an index fund or mutual fund.

You should certainly do your own research before investing in the stock market. But if you’re looking for an easy way to find some stock ideas, using Motley Fool’s stock picks is a great way to start.

Building a portfolio using Fool’s recommendations can put you on the path to investing success. It’s not easy to beat the market, but the Stock Advisor program helps investors do just that. Thus, a Motley Fool subscription is a deal you won’t find anywhere else.

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