It seems just about everyone is searching for the perfect investing strategy. What is the safest and most effective way to make money in the stock market? Well, the truth is, it is constantly changing. Investing in the stock market is always a slight gamble. However, employing the advice of experts can greatly improve your chances of successful investments. That line of thinking prompted The Motley Fool Stock Advisor review you are about to read.
About The Motley Fool Stock Advisor
The Motley Fool has been a trusted name in personal finance and stock advice for more than two decades. So, it is no wonder that more than 600,000 people subscribe to its investment advice.
That is why the expert at The Fool went to work to develop a stock advising service to lend a helping hand to beginner and intermediate investors. You can use the stock advising service to get picks for your investments or simply gain more information about current market trends.
Some of the most stand-out testimonials amongst those who have tried its stock-picking service have called it life-changing. Others even attributed The Motley Fool’s advice to their own financial independence. So, I took a deeper dive into the service to see how its recommendations performed for me.
First and foremost, The Motley Fool stock advisor is not a free service. You can access some fantastic investing information and news through its website, but you will not receive any stock recommendations or direct advice.
Typically, the stock advisor service runs at $199 per year. Right now, new members can get access for $99 a year, which comes out to $1.90 per week.
If you are wary about such a large expense, don’t worry. You can also access one month of the service for $39. Given the returns the company prides itself on, this is a small price to pay.
According to The Motley Fool website, average returns on stock advisor recommendations have been 521%. That is pretty astounding. In fact, the stock advisor team boasts that it has outperformed the market in a 4-to-1 ratio.
How do they do this? Well, they comb every corner of the industry and find companies that may be largely overlooked by Wall Street. Then, every month, The Motley Fool Stock Advisor sends you two stock picks. It does all of the research for you.
After you receive your stock picks for the month, it is suggested you take a few minutes to fine-tune your portfolio and then follow the market trends. But how does The Motley Fool serve a true investing novice, like me?
Taking a Look at The Stock Advisor
The great news is that if you are a beginner-to-intermediate investor, The Motley Fool stock advising service is made for you. More seasoned investors will likely not fee they get as much from the advisor, but I think even they could benefit from a membership. Here is my honest Motley Fool Stock Advisor review after trying out the service with an investing simulator.
Some of the immediate pros of using a service like The Motley Fool include being able to rely on a reputable name and having access to stock picks right away. I think the peace-of-mind behind getting your investment advice from a name like The Fool is certainly a perk.
Additionally, there is a ton of data on each stock when you look into what the pros are suggesting. You can get historical data about the stock and how it has performed in similar market conditions. Other users can also weigh in on how the stock is performing for them.
Outside of the direct stock picks The Motley Fool suggests, you can also check out the “top movers” list. These are typically top performers for the day or stocks to be watching in the near future.
In my personal experience, using The Motley Fool stock advisor was extremely user-friendly. For someone that doesn’t know a lot about investing, it was great. The one downside I saw was that many of the stock suggestions, while I used the service, were tech-focused. I would like to see more variety in its recommendations, but this could be due to the current market as well.
Another con of the stock advisor service is that you can’t necessarily balance it out with your other investments. For instance, they may recommend investing in Netflix, but in combination with your real estate, ETF, and other investment strategies, it may not be the best decision. You still aren’t getting the full picture view.
My Motley Fool Stock Advisor Review
As mentioned above, I did not invest any real-life money in the market. I used a simulator to get an idea of how the recommendations perform. The Investopedia investment simulator prohibits traders from investing more than 25% of their portfolio into a specific trade.
Additionally, it is worth noting that I performed this experiment in October 2020. The market is crazy right now. Though, this is arguably the best time to test out a stock advisor service and get an idea of the kind of advice they are giving. Here are how my stock picks performed.
My Stock Picks
I picked Square (SQ) and Pinterest (PINS) as the two stocks to focus on. Both stocks came recommended from The Motley Fool on the same day. The simulator limits you from spending more than 25% of your cash on any single stock, so I was limited to 10 shares of Pinterest and 13 shares of Square.
Of course, those two investments did not take up all of my $10,000 in investment cash. So, I went back into The Motley Fool to see what other stocks they suggested. Among those listed were:
- Autodesk (ADSK)
- Wix.com (WIX)
- Hubspot (HUBS)
- Fiverr (FVRR)
- Union Pacific (UNP)
- NVIDIA (NVDA)
- Nice Systems (NICE)
- ASML Holdings (ASML)
- Solar Edge Technologies (SEDG)
Other notable stocks among the top movers, while I used the service, were Netflix (NFLX), iRobot (IRBT), Slack Technologies (WORK), and Crowdstrike Holdings, Inc. (CRWD).
As you can see, most of the stock recommendations are tech companies. I decided to move forward with some shares in Solar Edge Technologies and ASML Holdings. I felt this gave me more of a mix. I also bought a few shares of Netflix (because I’ve always wanted to). Here is what my holdings looked like:
Returns on My Investments
As you can see, I invested about $9,800 of the allotted $10,000 the simulator gave me. Unfortunately, while I used the service, the market was generally down. I lost a little money, but every day the stocks The Motley Fool suggested performed well. Take a look…
Each stock I bought that they had suggested typically stayed in the green each day. Netflix, the only one that wasn’t in the picks they suggested, was the only one that really slipped into the red. However, it should be noted that Netflix was amongst the “top movers” on the day I got started. This area of the site continuously changes based on the performers each day.
When it comes down to it, The Motley Fool Stock Advisor is a great resource for people like me who haven’t yet started investing or are just getting started. Not only does it give you information about how the stock has performed historically, but you can get information about recent trends and how other investors are suggesting people move.
It was hard for me to stay off the stock advisor once I got in. For a beginner, it was all of the information I needed in one place to be able to make an educated decision. On top of that, the stocks they chose performed well.
So, whether it is for a month or a year, consider giving The Motley Fool Stock Advisor a try. At the very least, you’ll learn something about the current market trends.