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The Motley Fool – A Newbie Trader’s Paradise?

A new world is emerging from the ashes of the coronavirus pandemic. This is a world where employment numbers stagnate, businesses restructure operations, and unrest spreads amongst the general public. It is also a world rife with opportunity for investors; one professional even likened it to the mythological Wild West. But where to start? Most people have a hunch, but when it comes to actually investing your hard-earned cash, you may want a little bit of professional guidance. This is where an investment service like The Motley Fool really shines. The average investor simply does not have time to do the kind of research which makes a guess educated; The Motley Fool does all this work for you, plus a little bit more.

Founded in 1993 by David and Tom Gardner, The Motley Fool follows a business ethos that reassures even the most tepid of beginners: long-term investment strategy. While exchange traded-funds and mutual funds are typically recommended for their staying power, The Motley Fool works to make stock picks shine for investors looking to create passive, long-term, and relatively risk-free portfolios. Their recommended investment strategies have been impressive: with recent returns at an average of 36%, this is well above the S&P average, and shows that the folks at The Motley Fool have a bead on the market.

As a subscriber to The Motley Fool, you have access to a variety of specialized media which should help you better navigate what is at first an obscure market. There is a weekly newsletter, sprightly podcasts, YouTube tutorials, and various social media alerts. But the Stock Advisor program is their flagship service. It is a stock-picking service that provides members with two new picks per month. What makes the Stock Advisor so robust is that those at The Motley Fool thoroughly investigate the companies which they recommend. It is one thing to look at numbers and trends, datasheets and graphs; it is another to learn about a company, to engage with its spirit and practices, and really know its nuts and bolts. This kind of engagement is what The Motley Fool is all about.

Pros and Cons of The Motley Fool

Pros

  • At just $99 a year, it is an affordable service.
  • They have a history of success: not only did they survive the dot-com bust, but they have also thrived and prospered in a market that has grown increasingly abstract.
  • They offer advice and support through many different medias.
  • Their strategies favor the “average” investor. They do not aim to help users strike gold, but increase their portfolio earnings safely and securely. They employ common-sense rhetoric rather than gung-ho bravado.
  • You become part of a bona fide community.

Cons

  • They have a penchant for upselling their own wares; this can sometimes be cumbersome to the user.
  • Due to a long-view strategy, their stock picks can often be on the conservative side.
  • Not all stock picks are successful (but whose are?).

Still, with all the company’s success, people have a lot of questions about the service. In a sense, it all seems too good to be true. Is this fool’s gold? Does the company’s cheeky name imply something at the novice investor’s expense? Why doesn’t everyone use the service if the pros far outweigh the cons? Here are some frequently asked questions and answers:

  • Can I trust The Motley Fool? The short answer is a resounding yes. The company has been in business for almost thirty years, and we have yet to hear anything that would sow even an iota of mistrust in them. They are respected in the industry, and have the track-record to prove it.
  • Can I really make money using the service? Yes, of course you can. The Motley Fool guarantees nothing, but by following their advice and especially the Stock Advisor picks, one positions themselves for a significant return. Just look at their average: 36.4% compared to the 10.225% of the S&P 500. This speaks volumes.
  • Is this advice something I cannot get elsewhere? In a sense, yes. They research companies in a way that resembles the rigor of an academic department more than a brokerage firm. This allows them to make their “picks” with confidence.

The Bottom Line – Are The Motley Fool’s stock picks worthwhile?

Is the $99 dollar price-tag worth it? It all depends on what you are looking for. But it is very hard to argue against the company’s success. What’s more, their success of late has been even more impressive. It is every investor’s concern that they are getting stock advice from a dinosaur who does not understand the contemporary, youthful market, or even that they are being purposely left in the dark. But rest assured: The Motley Fool’s recent stock recommendations have done exceedingly well. Tom Gardner showed hip verve in recommending Pinterest last quarter, and David Gardner beat many to the punch in celebrating Zebra Technologies, a company he thinks will eventually come to dominate their share of the market. These are but a couple examples of the opportunities that will come your way as a subscriber to The Motley Fool.

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