The Motley Fool Review

Saturday, 9 April 2022, 5:50 am
Press Release: Hugh Grant

In these days of low-interest rates, investors are needing to take greater risks with their money than in the past if they want to get real investment growth.

With cash and fixed interest assets struggling to keep up with inflation, investing solely in these safer forms of investment will mean your money is losing value.

Managed funds produce great returns some years and most keep ahead of inflation, but long term returns beyond 10 years tend to still be in single figures.

That’s fine for long term investments like saving for retirement where your funds can accumulate over time, but if you want higher growth over 5 – 10-year periods, you need to go to the stock market or invest in property.

Most property investments require you to take on extra debt, often requiring you to put your family home at risk to enable you to borrow. But at least you can see the property you are buying and even an untrained eye can get a reasonable gauge on the quality of the asset you are buying.

The stock market and individual stocks are far more difficult to gauge quality, especially if you spend 40 hours a week in a career not associated with financial markets.

The Motley Fool is a low-cost stock advice website that could come close to making your stock market dreams of riches come true.

As a stock advice company that has been around since 1993 and actively giving stock-picking advice since 2002, the returns on its recommended stocks have proven themselves to be an exceptional option for the inexperienced stock investor.

Who is The Motley Fool?

Brothers Tom and David Gardner began working out of their backyard shed in Alexandria, Virginia, USA, printing a newsletter with stock market advice.

In 2002 they began their primary service, Stock Advisor, and two years later, added Rule Breakers.

The Motley Fool aims to speak the truth about money and investing and to make financial advice accessible to people of all backgrounds and experience levels.

Their purpose is to make the world smarter, happier, and richer. They have over one million members subscribing to their services. They believe that investing in great businesses, for the long term, is the most effective path to wealth.

Overall Investment Philosophy

The Motley Fool’s overall recommended strategy is for an investor to hold at least 25 stocks to provide sufficient diversification, and the stock they recommend should be held for a minimum of 2 – 5 years.

This means their picks are not suitable for active traders but can be ideal for less experienced investors who don’t have time, energy, or the knowledge to understand the potential of individual stocks.

Investment Strategies

Stock Advisor is their flagship service and has two teams led by each of the Gardner brothers along with a group of analysts.

David’s team focuses on stocks that they believe represent “unquantifiable greatness”, based on long-term market trends. Tom’s team concentrates on stocks with an excellent management team, a strong financial performance, and a presence in underrated industries.

Rule Breakers is their other leading service, focusing on high growth, high-risk stocks primarily the emerging technology stocks. It is an aggressive investment philosophy to choose stocks believed to have high growth potential, but they can be volatile.

What Advice do you Get?

Stock Advisor searches every sector of the market and picks two stocks a month on the first and third Thursday of the month. Often their picks are mature companies that Motley Fool predicts still have a significant upside. These companies not only earn you great returns, but they come with lower volatility than many other “hot” stock picks.

In addition to each stock pick, this service also includes 5 “Best Buys” chosen from favoured investment opportunities to hold for at least five years, companies with solid track records to strengthen any portfolio, and Exchange-Traded Funds (ETFs) recommended to hold for broad concept investing.

This Best Buys list is arguably even more valuable than Stock Advisor’s twice-monthly picks. They help you build a better-diversified portfolio

Rule Breakers also recommends two stocks a month on the second and fourth Thursday of each month, along with a “Best Buys Now” list. They choose five best buys around the middle of every month, along with an in-depth explanation of why it believes these are good investment opportunities.

Once a year, this service also publishes a list of ten “Starter Stocks,” which they believe represent a good foundation for your portfolio. These stocks are more conservative and aimed to offset the volatility of their monthly stock picks.

What is their Performance Like?

Stock Advisors' average return since 2002 is 504% compared to the S & P 500 of 138% over the same period.

Since its inception in 2004, Rule Breakers' average return is 242% compared to the S & P 500 of 119%.

For both services, about 80% of stocks are showing positive returns.

They have had a few failures and have even recommended the sale of their recommended picks that did not perform.

What do these services cost?

Of course, you don’t want any potential investment gains eaten up by ongoing fees.

Stock Advisor cost $199/year, but only $99 for the first year, while Rule Breakers costs $299/year, but is also just $99 for the first year.

The Motley fool is not only the Stock picking website with the best performance but also with one of the lowest costs. They also provide a huge amount of investment advice. The major complaint from members is the number of advertisements popping up regularly on the site, however, these can be turned off in your account settings.

To learn even more about how The Motley Fool could be right for you, check out this review.

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