I’ve talked a ton about investing on my blog recently because a huge part of following your authentic self is having the financial flexibility and freedom to focus on the things that matter most to you. I shared some of the key reasons I “fired” my financial advisor and decided to go at it alone. I even laid out a simple path for you to get started investing using index tracking ETFs.
The truth is when I started out alone as an investor. I didn’t really venture out by myself. I’ve mentioned multiple times that I joined a stock picking service called “The Motley Fool.” Founded by David and Tom Gardner, the company looks to beat the stock market by picking stocks of great companies that they can hold for a long time, at least 3-5 years and hopefully even longer if it’s a really great company.
I joined the Motley Fool in October 2019 and true to my nature was highly skeptical. As usual, I thought, “How are they scamming me?” Almost a year later, I cannot stop talking about how great a resource the Motley Fool has been for me as an investor.
After losing to the market substantially with my financial advisors by over 40%, I have actually made money investing for the first time this year and beat the market as of this writing by over 25% (I know this because I’ve spent HOURS building my very own customized investment tracker, not an easy task. I wanted proof that I was accomplishing what I set out to do.) All this without ever selling a stock even once. I’ve done this with very little effort outside of following their general advice and tapping in to my own economic intuitions.
At this point, you might be wondering if the Motley Fool is for you. I can’t answer that for sure, but I can lay out some of its best features and potential pitfalls of the Motley Fool.
3 Pros
- Motley Fool Live: This past March with Covid-19 shutting down much of the world’s economy, CEO of the Motley Fool, Tom Gardner, decided to do something major for its members. He wanted to create all day programming about investing for Motley Fool members. Every day since the pandemic shutdown Motley Fool headquarters in March, they have live streamed educational content for NO additional charge. I feel like I’ve taken 10 master courses in investing and life just by listening to the content regularly. Some of my best investments came after listening to “Deep Dives” into companies I was interested in, but unsure about as investments. The timely and highly relevant content is worth far more than the subscription fee for the service.
- Weekly Stock Recommendations: Between two recommendations of new stocks each month from David and Tom Gardner and the “Best Buys Now” features twice a month, the team provides 10-12 different stocks that they think are great investments that month. From that list you can choose what you think the best investment ideas could be for your own personal portfolio. It takes out a lot of the guesswork and overwhelm when it comes to picking what to buy next.
- Model Portfolios: Recently, the Fool released two different model portfolios to help investors in how to best diversify their portfolios and allocate assets. This really helped me understand how to lay out my entire portfolio and how to include ETFs along with the individual companies that I own. Without guidance, it can feel like a really overwhelming concept, but they really broke it down into easy to understand graphics and guidance.
3 Cons
- Upselling: When you first sign up you will likely receive offer after offer for their other services. As a member of Stock Advisor I often feel like I don’t even have enough investment money to buy the companies that I like. Stock Advisor is one of many services that the company offers for varying levels of investors. This is great, but what isn’t great is the 5 or more emails in my inbox every week teasing another service. I knew I wasn’t interested in more ads so I just changed my email preferences and the obnoxious emails went away. Problem solved.
- Only for Long-Term Minded Investors: If you are looking to get rich quick, they can’t help you. Their entire philosophy is built around holding stocks for 5-10 years. In fact, Tom Gardner encourages never selling a stock before 5 years is up even if it’s a huge loser or doing nothing. A great example of why is Tesla. From 2014 to 2019 the stock did essentially nothing, but in 2020 it has grown by some 500%. They will not teach you about any investment method other than buying and holding.
- They Cannot Give Personalized Advice: The Motley Fool is NOT a financial advice company and they cannot legally give it to you. When I had a financial advisor, I could call or email him any day and expect a response directly related to my personal situation. The Motley Fool does not provide that service. Depending on your situation, you may need tax or financial advice and this will need to be found elsewhere. Luckily, they do provide a substantial amount of educational resources that should answer many of the more basic questions.
Final Rating: 10 out of 10
I don’t know how I could rate it any lower than perfect. With their help I’ve beaten the market’s returns substantially and grown to be incredibly fascinated by investing in public companies. I’m loving the process of learning and rooting for companies that align with my values. It’s made investing everything I thought it should be and everything it wasn’t when I worked with a financial advisor. I personally couldn’t recommend the service highly enough. They fulfilled their mission with me by making me happier, smarter, and richer. I hope they can do the same for you.