The Motley Fool is an online investment advisory service with a 25-year history. Its flagship entry point for paid subscribers is the Motley Fool Stock Advisor program. This subscription service, priced at $99 for the first year, as of 2021, provides subscribers with access to two individual stock recommendations every month.
Naturally, with so many investment scams online, investors unfamiliar with the Fool are rightly suspicious about online investment programs claiming to help you beat the market. The sad reality is most investment platforms do not make their clients money consistently, if at all.
We are going to look at the Motley Fool’s Stock Advisor program to determine whether this is worth your time and money.
What Do You Get With the Motley Fool Stock Advisor Program?
The Stock Advisor service’s primary value comes from its two monthly individual stock recommendations. Subscribers receive two new stock picks every month directly from the company’s co-founders, Tom and David Gardner.
Since most subscribers to this service are beginners, you will also receive the ‘Starter Stocks’ report. This is a regularly updated list of 10 different stocks designed to help you build the foundations of your portfolio.
The majority of these recommendations are major household names with long track records of providing consistent returns.
You also receive the ‘Best Stocks to Buy’ report, which is a current list of buying opportunities. These picks tend to be more current and focus more on companies with huge growth potential.
Finally, you gain access to an education portal offering investment lessons, articles on current market affairs, and the methodology used by the Gardner brothers to recommend stocks.
Are the Motley Fool’s Stock Picks Legit?
The Motley Fool is one of the few investment platforms with any long-term credibility. They have a strong track record of choosing stocks yielding high returns since February 2002. That does not mean all their recommendations are winners, but their winners far outweigh their losers.
For example, in October 2018 the Motley Fool recommended purchasing shares in Amazon. On October 10th, the share price was $1788 per share. The share price on January 31st, 2021, was $3352 per share. If you invested when the Fool told you to, you would have nearly doubled your money.
Another example of the Fool’s success is Tesla. On January 1st, 2020, the Fool recommended buying shares in Tesla at $88. One year later, on January 3rd, 2021, shares were priced at $880. If you invested just $1,000 in Tesla, you would have turned that investment into $10,000 in just one year.
What makes these picks stand out is the Fool did not recommend stocks from unknown companies that happened to make it big. These were established corporations with plenty of column inches in the mainstream media.
If you followed the advice of the Stock Advisor Program, you would have more than made back your subscription fee from these two picks alone.
Is Stock Advisor a Type of Pump and Dump System?
The average retail investor is much smarter than twenty years ago. They are highly suspicious of anyone who recommends stocks online. The big fear is getting snagged in a pump and dump scheme.
The cautionary tale of the Wolf of Wall Street essentially involved Jordan Belfort recommending classic, safe blue-chip stocks to his clients. When he gained the client’s trust he recommended penny stocks in companies he owned. Once the stock soared high enough, Belfort would sell his shares in these companies for a huge profit, while his clients would lose everything and be left holding worthless stock.
Although it may seem like a similar story with the Fool, this is far from the case. The Fool has shown itself able to deliver regular returns on established companies. They have done this year after year, with the Gardner brothers demonstrating complete transparency regarding the methodology they use.
According to one review on the Motley Fool, since the company’s founding, the total rate of return on stock recommendations is 544%.
Will the Motley Fool Help You Beat the Market?
If you followed all of the Fool’s Stock Advisor recommendations, you would be up 544%, whereas if you invested in an S&P 500 tracker fund your gain would be just 121%.
If you followed the Fool’s advice, invested in Amazon, and held it throughout the ups and downs of 2020, you would have been rewarded with a 75% gain.
In short, even if you have grown to distrust online stock picks, the Motley Fool backs up its recommendations with hard numbers.
Although 95% of professionals fail to beat the market, it does not make it impossible. Stock Advisor is a solid investment recommendation program that has demonstrated its worth time and time again.
If you choose to follow its advice, you have an excellent chance of beating the market and making money.