It’s pretty much a guarantee that anyone who has researched stocks on the Internet has discovered the Motley Fool. You may have chuckled at the name, but there is almost no way to avoid this popular and well known stock picking service – after all, when you withstand the test of time (Motley Fool was founded in 1993) and have picked winners like Facebook and Netflix, you tend to stick out to people. The reality is that the Motley Fool stands out among its peers – not only for longevity, but also for its track record and the breadth of the advice that it now offers.
Covering the Basics
There’s a reason that the Motley Fool has so much appeal to regular, every day investors looking to excel at self-directed investing. Its basic concept is very straightforward and easy to work with. For a reasonably affordable price point, users get access to two stock picks per month – that works out to 24 each year. It is enough to keep you engaged and give you content to do your own due diligence and further research on, without being an overwhelming amount of information that requires technical expertise or a lot of free time to properly make use of. It’s a lot less complicated than many other forms of investing, such as real estate.
What a lot of people don’t realize is that the Motley Fool actually offers multiple services aimed at different investing goals and investor risk tolerance levels. Understanding the differences between the various subscription services and determining which one is most appropriate for you is probably the single most important up front decision you will make that will ultimately determine how successful your experience as a Motley Fool user is. Of course, with self-directed investing on the rise, it is always important to stay on top of the current rules that govern financial institutions to make sure you are working with a brokerage that is compliant.
The offering that most people associate with Motley Fool is known as Stock Advisor. It gives stock pick recommendations that focus on companies with established track records and a long history of trading. As you might expect, these tend to be companies that many have previously heard of it, and while their picks may well result in healthy returns, they are not necessarily hyper-growth oriented. This will work well for investors that are somewhat conservative and do not have an appetite for huge amounts of volatility in their portfolio.
Another Motley Fool service is known as Rule Breakers. It steps outside of convention and focuses on lesser known stocks that do not have as lengthy of a track record and may be susceptible to large swings in share price – both for good and for bad. It should go without saying that Rule Breakers is only appropriate for investors that have some tolerance for risk and won’t lose sleep over large swings in their portfolio.
Both offerings have some core elements that are the same – for example, they are priced identically, and they both follow the pattern of making two stock picks per month. The biggest difference is in the actual stocks that they recommend – it is quite rare for the two services to pick the same stock, meaning someone could in theory subscribe to both without much overlap.
Motley Fool Everlasting Stocks
The newest Motley Fool stock picking service is known as Everlasting Stocks. As you might be able to guess from the name, it is geared towards very long-term investment goals, and it is poorly suited for those looking to day trade or swing trade. Subscribers get access to a huge volume of foundational knowledge and core portfolio recommendations, plus lists of the hottest current stocks that are updated regularly, and frequent new picks.
It’s no secret that the stock market is a great tool for building long-term wealth, so if you are starting to invest towards a big goal like sending your kids to college, a product with a time horizon like Everlasting Stocks is definitely well worth looking into.
Motley Fool vs Morningstar
It would be unfair to only talk about Motley Fool products without providing some context as to the many other investment services that are readily available online. Another well known offering is Morningstar. While it also has a solid track record, the type information it provides is quite different from Motley Fool.
Morningstar reviews mutual funds, ranking them on a 1-5 scale based on a proprietary, in-house formula that they guard closely. If your goal is to pick individual stocks, it won’t work for you, but if stock picking makes you nervous and you prefer the relative safety of mutual funds, Morningstar can be a fabulous resource.
Motley Fool: First Among Equals
There are simply too many online stock picking services for most people to even contemplate, let alone research in great depth. Motley Fool checks the most obvious (and important) boxes – it has a long track record, it has a history of returns that outpace the S&P 500, and it is affordable and user-friendly. All things considered, it’s very hard to see how an investor just starting out could go wrong by including advice from the Motley Fool in their investing journey.