If you’ve been exploring stock investing, chances are you’ve come across the Motley Fool Stock Advisor service. With its impressive long-term performance and reputation for delivering valuable stock recommendations, it’s become a go-to resource for many investors. But is it really worth the investment? In this comprehensive guide, we’ll dive deep into how the service works, its performance, features, and whether it’s the right choice for you.
What Is Motley Fool Stock Advisor?
Motley Fool Stock Advisor is a subscription-based stock-picking service that provides monthly stock recommendations for long-term investors. Launched in 2002 by brothers David and Tom Gardner, the service has built a strong track record of outperforming the market, offering an impressive return on investment for subscribers.
At its core, Stock Advisor is designed to help individual investors—whether you’re a novice or an experienced trader—build a diversified stock portfolio that can achieve significant growth over time. The service primarily focuses on companies with strong growth potential and competitive advantages, aiming to help subscribers beat the market consistently.
How Does Motley Fool Stock Advisor Work?
Every month, subscribers receive two new stock picks: one from David Gardner and another from Tom Gardner. The service emphasizes long-term investing, recommending that you hold stocks for at least five years to maximize returns. The goal is to identify high-quality companies that have the potential to grow over time, making it suitable for investors looking for long-term wealth accumulation rather than quick profits.
The Motley Fool also encourages subscribers to diversify their portfolios by investing in at least 25 to 30 different stocks. This strategy spreads risk across multiple industries and companies, reducing the potential downside if one or two picks underperform.
Performance: How Has Stock Advisor Done?
One of the key selling points of Stock Advisor is its strong track record. Since its inception in 2002, the service has delivered a return of over 670%, compared to the S&P 500’s return of around 154% in the same period (as of April 2024). This means that subscribers who followed the Stock Advisor’s recommendations have significantly outperformed the broader market over time.
The service boasts that around 60% to 70% of its stock picks turn a profit, with some picks, like Amazon, Netflix, and Tesla, delivering returns that have changed the game for long-term investors. However, not every pick is a winner. The service also advises investors on when to sell underperforming stocks to mitigate losses.
Key Features of Motley Fool Stock Advisor
- Two Monthly Stock Picks: Subscribers receive stock recommendations twice a month—one from each of the Gardner brothers. These picks come with detailed analysis, financial insights, and reasons why the stock is a good buy.
- Starter Stocks: For new subscribers, Stock Advisor provides a list of “starter stocks,” which are stable companies with high growth potential. These are excellent options for those looking to build a strong foundation for their portfolio.
- Top 10 Best Buys Now: Each month, Stock Advisor updates its list of the top 10 stocks that are the best buys at that moment. These are selected based on their potential for long-term growth and are great picks if you’re looking to make new investments.
- Educational Content: In addition to stock recommendations, Stock Advisor offers a wide array of educational resources, including articles, podcasts, and videos. These help investors learn more about the stock market, personal finance, and how to manage their portfolios effectively.
- Online Community: Stock Advisor also includes access to an online community where subscribers can engage with each other, discuss stock picks, and share insights.
Pros and Cons of Motley Fool Stock Advisor
Pros:
- Impressive Long-Term Returns: With a track record of outperforming the S&P 500 by a wide margin, Stock Advisor is ideal for investors looking to build long-term wealth.
- Affordable Pricing: At $199 per year (with frequent promotions offering the first year for just $99), it’s a relatively low-cost way to access professional stock recommendations.
- Diversification Support: The service encourages investors to diversify their portfolios, reducing risk and enhancing long-term performance.
- Educational Resources: Whether you’re a beginner or a seasoned investor, the Motley Fool offers plenty of resources to help you grow your investing knowledge.
Cons:
- Not for Short-Term Investors: If you’re looking for quick profits or are more interested in day trading, Stock Advisor isn’t the right service for you. The Motley Fool’s investment philosophy is centered around long-term investing.
- No Brokerage Integration: Unlike some other investment platforms, Stock Advisor doesn’t link directly to brokerage accounts, meaning you’ll need to execute trades manually.
How to Get the Most Out of Motley Fool Stock Advisor
To truly benefit from the service, it’s important to follow the Motley Fool’s investment philosophy:
- Invest in at Least 25 Stocks: This ensures your portfolio is diversified, which spreads risk and maximizes growth potential.
- Hold for at Least 5 Years: Stock Advisor is built for long-term investing, so plan to hold onto your picks through market volatility.
- Invest Regularly: Adding new capital to your portfolio over time helps compound your gains and allows you to take advantage of new opportunities.
Pricing and Subscription Options
Stock Advisor costs $199 per year, but new members often get a discounted rate of $99 for the first year. The subscription includes two new stock recommendations each month, access to the Starter Stocks and Best Buys Now lists, and entry into the Motley Fool community.
The service also comes with a 30-day money-back guarantee, giving new subscribers the chance to try it out risk-free.
Is Motley Fool Stock Advisor Right for You?
Motley Fool Stock Advisor is best suited for investors who:
- Are looking to build a long-term portfolio and are comfortable holding stocks for several years.
- Want expert stock recommendations but are comfortable executing their own trades.
- Are willing to invest regularly and diversify their portfolio.
If you’re a short-term trader or someone looking for a hands-off approach, Stock Advisor may not be the best fit. However, for those who follow the Motley Fool’s investing strategy, the service has proven to be a valuable tool for achieving long-term financial success.
FAQs
What is the investment strategy of Motley Fool Stock Advisor?
The Stock Advisor service is based on long-term investing, recommending stocks with growth potential and advising subscribers to hold these stocks for at least five years.
How much does Motley Fool Stock Advisor cost?
The service costs $199 per year, with frequent discounts offering the first year for $99.
Is Motley Fool Stock Advisor good for beginners?
Yes, the service is highly recommended for beginners due to its straightforward recommendations, educational content, and emphasis on building a diversified portfolio over time.
How does Motley Fool Stock Advisor compare to other stock-picking services?
Compared to other services, Stock Advisor has a strong track record of outperforming the market, offering consistent returns that surpass those of the S&P 500.
What happens if I want to cancel my subscription?
The service offers a 30-day money-back guarantee, allowing you to cancel within the first month for a full refund.
