The Motley Fool is a stock advice company begun by brothers Tom and David Gardner in 1993 and is based in Alexandria, Virginia. Initially they published various guides and investment advice, then in 2002 they launched their main product, Stock Advisor.
Since then, it has become wildly popular with hundreds of thousands of investors from all around the world relying on this service for their stock picks.
It would seem fair to say that if they weren’t getting their picks right most of the time, The Motley Fool would no longer be here. The fact they have so many subscribers, indicates they are doing better than most.
Stock Advisor is The Motley Fool’s flagship product and it has been in operation for almost 20 years. Each month, both teams will recommend one new stock to add to your portfolio.
The six stock picks each month is ideal for anybody beginning their stock market portfolio. You can also view last month’s stock picks and see how they have performed.
It should be noted that they are still only human and not every pick is a winner. But they don’t shy away from their faults. They are very upfront about their failures as much as their winners. They will even recommend selling if they no longer believe one of their picks remains a good investment for the long term.
Having said that, over 80% of their picks have increased in value since being picked.
They also have another service called Rulebreakers which picks higher risk investments.
Young investors are considered to be in the age group of 18 to 40 years of age. I’m sure a lot of 40-year old’s would be flattered to be called young.
However, in terms of serious investing, many people in their 30’s are using the majority of their money to pay for expenses related to day to day living costs and raising children.
So, for the majority, serious investing only starts once these costs begin to reduce and there is more surplus income available for investing
Therefore, it is easy to think that subscribing to The Motley Fool and acting on their recommended stock picks is not ideal for those in the Young Investors age group.
But there are several very good reasons why The Motley Fool is actually extremely advantageous for young investors.
The greatest strength the young investor has is their age. Being younger they have more time to let their investments grow.
This allows the younger investor to take advantage of two of the most powerful investment concepts, those concepts are the time value of money, and the power of compound interest.
Simply put, the longer your money is left in any investment, the more it will grow in value. With stocks, this is due to the growth in the value of the stock as the underlying business continues to perform profitably, and through the dividends you are receiving, especially if you reinvest the dividends into more shares in the same stock. Then you begin earning more dividends on the earlier dividends received!
Because The Motley Fool’s stock picks are designed for long term growth, they are ideal for young investors who have more time before needing to cash out their investments.
Some individual stocks recommended by The Motley Fool are expensive and therefore require an investment of possibly thousands of dollars rather than hundreds to be able to buy a decent amount of stock. Some young investors may not have enough surplus income to buy those more expensive stocks at the time they are recommended.
In those instances, the young investor could choose to either ignore that stock pick or buy it later when they have saved up enough to purchase a decent amount of the stock.
Again, time works to the advantage of the young investor. They can set up a high interest savings account and make smaller deposits, then when the balance has built up to a suitable amount, withdraw it and buy the stock.
When people of any age set about making a budget, the first mistake they make is looking at all their bills and working out how much of each pay packet needs to be set aside to meet those expenses. Then they pay themselves out of any surplus remaining.
Instead, from each pay packet, you should pay yourself first based on your financial goals, then meet your ongoing living expenses out of the balance.
This way, you decide how much you need to put aside for long-term investing and make this one of your life’s priorities. You then incur expenses based on what you can afford out of the remaining income you are receiving.
The Motley Fool is all about making people smarter, happier, and richer. One of the great strengths of the service is the huge amount of investment information it makes available to subscribers.
We all know the influence that social media is having today. It is particularly popular among the young investors age group.
Many younger investors are taking their investment advice from social media.
That’s not always going to be the best source.
This is leading many to invest in cryptocurrency which is still considered by many to be a high-risk and unproven investment with many uncertainties still surrounding it.
To can learn more about The Motley Fool here.