Whether you're new to investing or you have been investing for a very long time, you'll know that one of the most challenging things to do is to pick the right stocks. If you're new, terms like P/E ratio, EPS, profit margin, cash on hand, cost of revenue, and so on might sound like a foreign language. And if you've been investing for a while, you know how time-consuming it can be to do the research necessary to pick the right equities for your portfolio. That's the problem the Motley Fool Stock Advisor is trying to solve. It's a subscription-based stock picking service that gives you two stocks each month to try that have already been vetted by the experts. Is it worth outsourcing your stock picks to the experts? Find out in our Motley Fool Stock Advisor review!
Motley Fool Stock Advisor Review: What's Included?
The core offering of the Motley Fool Stock Advisor is the stock picks that you will receive each month. Two monthly picks arrive as part of the newsletter you'll receive. It's worth noting that Motley Fool is not acting as a brokerage or investment advisor, so you'll still need somewhere to execute the trades if you decide to put some money on their picks. That also means that you can invest as much or as little in each selection as you want, or you can skip their choices altogether!
This monthly service includes two picks. This fact is important because there will be services that will advertise these types of selections with great returns. The problem is that you have no idea who's behind the picks, so it's hard to know if they're honest or if they happened to get lucky. However, with these picks, you know that the Motley Fool has been around for over two decades with a very good reputation for their stock picks.
When you sign up, though, you're not merely receiving access to two picks. You're also getting access to all their historical selections, a list of the “10 best stocks to buy right now” newsletter each month, a “top 5 starter stocks report”, and monitoring for when they believe you might need to sell any one of these picks.
Additionally, you'll get access to the Fool Knowledge Base, which contains a trove of research and reports where you can get experts' opinions on other stocks.
All in all, we think it's an excellent package. It contains everything necessary for any investor to up their game in terms of the markets.
Motley Fool Stock Advisor Review: What Has Been the Performance?
Of course, anyone can pick stocks, but you want stocks that are going to do well! You want the insights that the experts have to choose the stocks that will outperform the broader market.
No stock pick is risk-free. There's always the age-old disclaimer that “past performance is no guarantee of future returns,” and when it comes to stock picks, this is 100% true. Just because previous stocks have done well doesn't mean that future choices will continue to do well.
With that said, the historical picks have been nothing short of spectacular. If you had invested $10,000 in the S&P 500 in 2002, that investment would be worth about $50,000 today. However, if you had taken that $10,000 and invested it by following the Stock Advisor picks, that original investment would be worth an impressive $325,000 today.
That is a huge difference. It's the best testimony possible for how good these picks have been in the past. Of course, that doesn't mean they'll continue, but the track record thus far has been stellar.
Let's take a look at two stellar picks in the past that Motley Fool Stock Advisor got right!
Tesla (January 2, 2020)
Back on January 2, 2020, Motley Fool issued a buy alert for Tesla stock. Then, it was about $700 per share. So if you had taken that alert and bought $1,000 worth of Tesla stock at the time, you would have had about 1.4 shares of this company.
On August 11, 2020, Tesla announced that it approved a 5-for-1 stock split, so, after that split, you would have about seven shares worth of Tesla stock.
The current price of Tesla hovers around $600, meaning that you would have $4,200 worth of Tesla stock today, for a profit of about $3,200 (about £2,250).
That's an impressive return for about a year and a half of owning Tesla stock! You would have quadrupled your money!
Fiverr (September 3, 2020)
On September 3, 2020, Motley Fool advised people to buy Fiverr, a freelancing company based in Israel. Then, it was about $113 per share. So if you invested $1,000 in the company at that time, you would have about 8.8 shares of Fiverr stock.
Since then it has gone up and down a little bit. Unlike Tesla, though, there have been no splits, so this pick isn't quite as exciting.
On February 12, 2021, this stock hit a high of $323. If you had sold then, you would have received $2,842.40 for a nice profit of $1,842.40 (about £1,300). On the other hand, if you held on to the stock, your $1,000 investment would be worth about $1,800, which is still about an 80% ROI in just a few months.
Ultimately, while Fiverr was not as exciting of a pick as Tesla, it still earned a decent return on investment.
How Much Does This Cost?
It should be evident from this Motley Fool Stock Advisor review that you're getting access to a lot of content! The question is, of course, how much does access to all this cost?
Fortunately, the introductory offer for all of this is a relatively modest $99 (about £70) for the first year. After the first year, the cost goes up to $199 (about £140) for 12 months' worth of picks. That pricing makes it very attractive compared with other options for investment advice. Many websites charge at least that or more for stock selections by investors with a less proven track record. This pricing also probably beats what you would pay to an investment advisor for their advice!
However, with that said, this service isn't exactly cheap either. You'll need a decent portfolio for these picks to be of real benefit. If you're only investing a hundred dollars a month, for example, or you have an account with a thousand in it, you're probably not going to benefit enough from these picks to justify the cost. If you're investing a thousand a month, though, or you have a sizable account balance, then it will very likely be advantageous to have these picks!
How Much Money Would I Need To Make These Picks Worth It?
There's no hard and fast rule for how much you need in your account to make these picks worth it. Perhaps you're starting small, but you're looking to learn, and these picks are a way to learn more about the market until you can afford to invest more. In that case, subscribing might be worth it for you, even if you don't see an immediate ROI from it.
With that said, probably unless your portfolio is at least $10,000 (or £7,000 for UK residents), these picks aren't worth the money. However, with a $99 introductory offer for one year and $199 per year afterwards, the subscription would only be 1-2% of your total portfolio if you have $10,000. At that point, the cost is probably worth it.
On the other hand, if you have $100,000 (£70,000) or more to invest, getting this subscription is a no-brainer! This subscription is much less expensive than a professional money manager, and it gives you more control over your investments!
Motley Stock Advisor Review: Is It Worth Getting?
The big question, ultimately, is whether or not Motley Fool Stock Advisor is worth getting. That's the central question, of course, of this Motley Stock Advisor review.
For most people, the answer is an emphatic yes. But, even if you use these picks to help trade your 401(k) in the US or ISA in the UK, you'll undoubtedly benefit from them. The brothers behind the Motley Fool have been around the business for a long time, as is self-evident from this offering!
Will all the picks be winners? Of course not. Nobody is 100% perfect for predicting the markets, and The Motley Fool is no exception. But that's the beauty of subscribing to a service like this: they're merely picks. They're not trading your account for you or forcing you to buy anything! Instead, you can gain access to some top-of-the-line research and understand why these people think each pick will be a success.
With the $99 introductory offer, it's worth signing up for, even if you view it as a relatively inexpensive education in how the markets, and market research, works. There's also a 30-day cancellation policy, so if you find that you're not getting enough out of the subscription, you can always cancel and get your money back.
Given, though, that many of their picks have been historically quite good, it's worth signing up for and seeing what they're recommending! No matter if you're new to investing or have been at it for a while, there's something in this subscription package for everyone.