A lot of people are investing is simple now because of the Internet, however, finding good investments can be challenging. One of the most popular investment newsletters is Motley Fool Stock Advisor. They have been around for over 30 years and generally well respected and I remember reading their articles in the newspaper years ago. So here is my honest review of the Motley Fool.
In addition to following the markets for over 25 years, I have worked as a financial advisor and inside sales desk manager for a broker-dealer. To be upfront, I am not a huge fan of “stock picking” gimmicky newsletters and get-rich schemes. My personal perspective on investing is more conservative and long-term focused.
My initial impression is that Motley Fool is a mix of personal finance and stock picking for investors that are looking to make their own trades. Personally, I consider their material very general and the marketing stock-picking hype leaves a bad taste in my mouth. If I were a financial advisor or experienced investor, I would give Motley Fool a 5 on a scale of 10.
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The Motley Fool rating of 5 is based on my perspective and which is considered very tough. There are several things I like about Motley Fool and some I don’t. Other newsletters/publications to consider would be Advisor Market Report, Morningstar, or Barron’s.
What I like about Motley Fool
I think it is important to note there are a lot of things I like about Motley Fool. The first thing I like about them is that they provide very good personal finance and general investing advice. Many of the articles you will read provide great value to readers, especially those who are just starting to invest.
Specifically, the retirement and investing basics sections are great for people to read. Everyone’s financial life is unique, but these articles will help most people answer some basic financial questions on how to get started, taxes, and how much to save. As always, I recommend everyone have their financial plan reviewed by a financial advisor before they start investing.
What I didn’t like about Motley Fool
As mentioned earlier, the clickbait and stock hype articles really turn me off. Unfortunately, this really tarnished the image of the Motley Fool to me personally. After visiting their website, I was stalked for what seemed years with clickbait ads for stocks.
As mentioned above, Motley Fool has had some great stock picks, but the way it is marketed is a huge turn-off. They may be doing this to get people’s attention, but I think they don’t need this style of marketing because it brings down their own content.
Specifically, the ads and articles on “weed stocks” are nothing more to me than clickbait. I read several of them and wonder if people are buying these stocks because Motley Fool mentioned them which is very disturbing.
What about Motley Fools’ Stock Advisor?
The Motley Fool claims that their picks have out-performed the S&P 500. At the time of writing this, the stock advisor has a 564% return vs the S&P 500 of 117% from 2002 (see the dot-com crash). These numbers are very good I think legitimate and may be worth it if you are just for ideas. However, many people could have seen similar returns if they would have invested after the crash in the technology sector. More importantly, investing in just a handful of stocks without understanding diversification, could be a disaster to a portfolio in a down market.
Is Motley Fool worth it?
You might be asking, “Is Motley Fool worth the money?” The short answer is no. Sorry, but I think many new investors would be better off with a financial news subscription like the WSJ or Barron’s and financial professionals would look at more specific research reports.
Is Motley Fool legitimate?
One of the first questions investors may ask is Motley Fool legitimate? The short answer is yes, Motley Fool is very legitimate. They are stock and investment publishers founded in 1993 by David Gardner, Tom Gardner, and Erik Rydholm. Their primary business is online subscriptions to their stock recommendations, analysis, and research. The Motley Fool exploded in popularity when it made a content partnership deal in 1994 with America Online.
Motley Fool’s Dot-Com Crash
Like many companies of the time, Motley Fool was caught off guard by the dot-com crash in 2001 and lost 80% of staff. This was most likely due to the markets and Motley’s Fool’s promotion of the “Foolish Four” investment theory. The mathematical formula was used to find ways to out-perform mutual funds “in only 15 minutes a year.” Unfortunately, it didn’t work and even Motley Fool publically admitted the theory fell short.