Motley Fool’s Stock Advisor Review
Motley Fool’s Stock Advisor Review
In this Motley Fool’s Stock Advisor Review we discover a service where Motley Fool does the time consuming research for you, then presents you with stocks they feel you should buy now.
Every month, the two owners of the Motley Fool send you their best stock to buy now. Every month they also send you 10 other stocks to buy now for a total of 12 stocks per month to invest in. Over a year’s time that comes out to 144 stock picks you need to buy.
While subscribing to proven services such as Stock Advisor is one of the fastest and easiest way for a beginner to make gains in the market, there are four things you need to look for when evaluating any trading service such as Motley Fool’s Stock Advisor.
4 Things To Look For
There are 4 things I look for when reviewing a service like Stock Advisor.
- What are my expected returns?
- How much will it cost me to get those returns?
- Can I do the required trades on my schedule?
- Do they have a money-back guarantee period to allow me to verify returns and to see if it is for me?
What Are My Expected Returns?
I recently visited their site on May 3, 2021 where i found the following returns advertised:
According to this table on their website, since 2002 they have gained 582% for their subscribers. Since their service is ONLY about stocks you have to buy now and hold, it’s not clear where this return comes from. Is it from all 2,736 buy alerts they gave out over that time period (12 picks per month for 19 years)? If so, do you have enough funds to buy and hold 12 new stocks every month?
In the small print it does say they take an average return of each stock and use that average to calculate the gain. I sure wish they would have actually posted the stocks and the gains achieved in the past so we can see for ourselves how the gains were calculated. A little transparency please.
Now if you want transparency and bigger gains than 582%, we can compare the return of Stock Advisor to my own Index Trading System where we do post all the trades and the returns can be verified. Also, if we look at those gains we see something quite different. Note: My ETF alert service started in 2009. Because of this the chart has been updated to reflect returns from 2009 to February 2021.
We all have only a certain amount of time before we retire (or pass away). The bigger the gains, the faster our money grows and the better chance we have of hitting our financial goals. Seeing how both services cost the same annually, it’s up to you how fast you want your money to grow.
What Are My Costs?
Stock Advisor runs $39 month or $199 annually. In addition, you’ll need to buy 24 stocks per year minimum. Fortunately, most brokerages no longer charge fees when you place the trades yourself. $199 is a reasonable cost. My own Index Trading System is $19.95 per month OR $199 per year. The Index Trading System has only 12 to 16 trades per year so it’s easier to manage and follow.
As you see, both services are priced the same annually except the Index Trading System has returned more each year, AND will actually show you the trades that make up that gain, unlike Stock Advisors lack of transparency.
Can I Do This?
With Stock Advisor, every week on a Thursday, stock picks are given. These are stocks to buy now and just hold forever. The Motley Fool owners believe in a buy and hold approach.
Each of the owners gives their favorite pick each month and also each month, you get a list of 10 stocks you should buy now. Their recommendation is to buy all, so you will need to make 12 buys each month. The alternative is to just guess which one or two of the twelve will do best, but heck, you can do that on your own without having to pay for a service.
So plan on buying, managing, and tracking about 144 stocks every year. After a few year you could be up to a few hundred. This could account for their poor returns compared to the Index Trading System. Stock Advisor will have you over diversified.
My Index Trading System comes with a trading strategy. There is only one ETF to buy. I email or text you what to buy after the market closes. You set an order to buy the ETF at it’s buy price. That’s it.
Check on your order shortly before the market close. If it did not execute, make the buy before the market closes. Then you wait 2-3 weeks for the sell alert and repeat. If you can do this, you can follow the Index Trading System.
Is There A Money Back Guarantee?
Motley Fool’s Stock Advisor does have a money-back guarantee, but ONLY if you signup for the annual plan. The only way you will be able to verify they are beating the stock market is if you buy the annual plan. Then you can go in for 30 days and see what they recommended in the past and what the returns were for all 144 buy recommendations each year. If they can’t show you those, beware.
Be warned they will have salesmen contact you while you have a subscription and offer you many of their other products.
My Index Trading System offers a 30-Day Money-Back Guarantee which means you pay up front, but have 30 days to verify returns and see if it’s something you can do. Cancel within 30 days and get full refund of your subscription fee (and you don’t have to ask – comes automatically). The guarantee comes with monthly and annual plans.
To wrap up this Motley Fool Stock Advisor Review I’ve put together a chart comparing Stock Advisor against ITS. Hopefully it will help you make a decision, or subscribe to both for a few months and see which is better for you.
Now that you have the facts, I’m sure you can now make a more informed decision as to which advisory service is best for you.
There is no guarantee that my trading system, or Stock Advisor will do similar gains in the future.
To your success.