Researching, evaluating, and choosing which stocks to trade is not easy. It can take you forever to zero-in on just the right combination of stocks for your style of investing.
Fortunately, a well-made picking service can save you hours of research-time and ensure you never miss a good investment. And…the Motley Fool Stock Picks package is claimed to do exactly that!
Of course, we’re all aware of their Stock Advisor platform, but the question remains – is their ‘Stock Picks’ package worth subscribing to?
We did an in-depth review of their two most popular services along with their respective stock picks. Here’s what we found.
Contents
Who is Motley Fool?
This is a financial services company that was founded in 1993 by two brothers namely Tom and David Gardner. Therefore, when it comes to the experience of providing stock recommendations, you can’t beat them.
The company offers both free and premium financial advice on its website, which comes in handy for new and experienced traders.
Additionally, the Motley Fool provides various services to help you achieve your financial goals. However, if you are looking for premium services, they have the Stock Advisor and Rule Breakers.
Under each of the Stock Advisor and Rule Breakers services, you also get Motley Fool Stock Picks to help you beat the market. That said, let’s take a look at what each stock pick from the Motley Fool has to offer.
Motley Fool Stock Advisor Stock Picks – An Overview
The Stock Advisor is Motley Fool’s flagship product followed by the Rule Breakers. On their website, the company suggests that investors will get 197 stock recommendations with 100%+ returns.
However, we feel that part of the returns is a little bit exaggerated. This is because the stock’s value is known to fluctuate up and down.
When it comes to their stock recommendations, the returns are usually calculated from the date of recommendation to the present.
Generally, Motley Fool recommends you buy 25 stocks and then hold them for at least 5 years for the best returns. Why you might want to know?
According to this financial service, you can expect over 680% returns with just the average stock advisor recommendations. Here is an example of how this works.
Let’s say you invested $10,000 in the year 2002 via Stock Advisor, what will be your returns by 2021? Well, if calculated by time-weighted return, your investment of $10,000 will be over $350,000 as of October 2021.
But what if you were to invest the same amount of money via S&P 500 TR whereby you receive your investment returns each year? By 2021, your returns will be only slightly over $50,000.
That’s a very huge difference compared to what you get with the Stock Advisor. So, it makes sense to hold your stocks for at least 5 years if you really want good returns.
Motley Fool Rule Breakers Stock Picks
Under the Rule Breakers premium service, the Motley Fool company also offers stock picks. This service has been in existence for over 15 years.
However, unlike with Stock Advisor where you get 197 stock recommendations, the Rule Breakers provides you with 171 stock picks. And each stock has been carefully picked by experts to maximize returns.
That said, the average stock recommendations via Rule Breakers boast over 364% in returns. This is lower compared to what you get with Motley Fool Stock Advisor.
But compared to using S&P 500 TR, where you receive your investment returns every year, it is even worse. Why do we say so?
Well, if you decided to invest $10,000 in the year 2004 via Rule Breakers, the returns as of 2021 will be over $120,000. However, with S&P 500 TR, your returns will be slightly over $50,000 by 2021 if you had also invested $10,000.
What do you Get with Motley Fool Stock Picks?
The Motley Fool Stock Advisor and Rule Breakers are award-winning services. It is no wonder the company claims that their stock recommendations come with 100% + returns. But what benefits does the Motley Fool stock picks offer to investors? Let’s find out.
1. New Stock Picks Every Month
Whether you use stock picks under Motley Fool’s Stock Advisor or Rule Breakers service, members usually receive new stock picks.
Generally, you will get only two new stock recommendations every month. These picks usually come from Tom and David Gardner, who is the company’s co-founders. Therefore, you can trust that they are worth the money.
You see, most stock picking services believe that sending as many stocks picks as possible is the best thing. However, what they don’t know is that investors usually end up having a hard time knowing which stocks to invest in or to ignore.
So, to solve this problem, Motley Fool only provides two stock recommendations each month. These picks are usually carefully selected to ensure you get maximum returns.
2. Starter Stocks
If you are a new investor and looking to build your stock portfolio, you are going to find this feature essential. It is also an excellent foundational stock recommendation for experienced investors.
The Motley Fool Stock Advisor recommends a portfolio have at least 15 stocks. This is to help maximize growth potential and spread the risk across.
As such, the company’s Starter Stocks list comprises 10 stocks to help you build a strong foundation for your portfolio. This list is usually updated on an annual basis.
These stocks comprise time-tested companies that have proven over time to be great investments in the past.
However, the company advises new investors to start building out their investment portfolio with at least 3 of the starter stocks. And then slowly build up the list to at least 15 stocks using those from new recommendations.
3. 30-day Membership Fee Back
Let’s be honest, there are so many stocks picking services available to choose from. Therefore, you might try the Motley Fool Stock Picks and decide it’s not for you.
So, what do you do next? Well, if you feel that this is not the Stock Picks service for you, you can proceed to cancel your subscription.
If you cancel within 30 days, the company will refund every penny of your membership fee. This, therefore, means that you can try out Motley Fool Stock Advisor and Rule Breakers service without risking your membership fee.
Now, that sounds like a good deal, right? After all, there are few companies in the financial service industry that provide this feature.
But of course, it is worth mentioning that you will only receive your membership fee back. Therefore, if you had bought some stocks and sold them at a loss, you won't get a refund.
4. Community and Investing Materials
Another benefit of signing up with Motley Fool Stock Advisor Picks is that you get access to educational materials.
For instance, you will get basic trading guides and the methodology the co-founders use to research stocks. This is particularly invaluable to new investors as well as experienced traders.
As if that’s not enough, the platform provides a community forum where investors are free to discuss stock picks. The forum is quite active and services as an excellent place for members to network with other investors.
And if you are a new investor, you will find the forum helpful because other members are always happy to help. That said, you should never rely on any financial advice given by strangers online.
Are there Any Subscription Fees?
If you want to invest with Motley Fool Stock Advisor or Rule Breakers services, you pay a membership fee.
Currently, the company has an introductory offer for new investors, which is $99 only for a year of full access. This is only $1.90 a week whether you choose the Stock Picks under Stock Advisor or Rule Breakers.
However, thereafter, you will need to part with $199 every year, which is also relatively affordable. The monthly subscription fee, on the other hand, is $39.
Unfortunately, there are no refunds available under the monthly package. The good news is that you can cancel the membership anytime.
Therefore, compared to other stock-picking services, Motley Fool is way cheaper.
For instance, the annual membership fee for Investors Underground is $1897. This is way too expensive considering that the platform does not even offer any membership fee back guarantee.
And if you compare Motley Fool to a platform like Trade Ideas, you will notice it’s cheaper. This is because the premium package by Trade Ideas costs $228 per month.
Pros
Cons
Conclusion
Stock prices can move a lot throughout the day. But since you never know when a stock’s value will fall further than you expect, you should consider using a stock picking service.
The Motley Fool Stock Picks seems like a great stock picking service. Both services have beaten the market for over 15 years. As if that’s not enough, the platform is backed by a 30-day money-back guarantee just in case you decide it’s not for you.
So, overall, it seems like an excellent stock recommendation service for both new and experienced investors. Of course, it has its own drawbacks that you should consider before trying the service out.
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