Motley Fool Stock Advisor review: Subscription-based stock advice for (almost) everyone

Investing in individual stocks instead of things like index funds, mutual funds, or ETFs can make a lot of sense, especially if you’re trying to beat the market. But the problem is that picking individual stocks can be time-consuming and incredibly complicated. If the worst part of investing for you is coming up with stock ideas you feel confident in, it might be time to invest in a stock-picking service.

Motley Fool Stock Advisor is a subscription-based service from The Motley Fool that gives you different types of premium content including stock picks and recommendations, educational resources, and more.

In this Motley Fool Stock Advisor review, I’ll discuss the pros and cons of Motley Fool’s Stock Advisor, share details about how it works, and compare this service to others to help you decide if it’s worth the cost.

What is Motley Fool Stock Advisor?

Motley Fool Stock Advisor is a premium subscription service from The Motley Fool, an investing and advising platform trusted by hundreds of thousands of investors.

With membership, you get two stock picks every month along with an in-depth analysis of why Motley Fool experts chose each stock and why you should invest in them. You’ll also receive other lists of active and past stock recommendations as well as community and educational resources. On average, Stock Advisor stocks do very well and outperform many stock market indexes.

Stock Advisor differs from other services because it is not a brokerage account and it does not buy stocks or manage your portfolio for you. Rather, it provides you with expert-curated stock picks and the information you need to decide if you want to buy them yourself. It’s created for investors who want to keep adding individual stocks to their portfolios over time.

How does Motley Fool Stock Advisor work?

Once you’re a member, you’ll get exclusive stock picks from The Motley Fool co-founders Tom and David Gardner every month, sent right to your email. You can click for a full description of why each stock was selected and more information about the company.

Besides the monthly stock picks, there are other types of premium content you’ll be able to access using your Motley Fool account. Here are the main products within the Stock Advisor service.

Stock tips

As a member, you get stock tips every single month — and Tom and David Gardner still do the stock-picking.

They’ll send you a detailed report about each stock, including the company’s risk profile, why they chose the stock, and, best of all, 24/7 monitoring of that stock. 

So, if they recommend the stock to you and then some time in the future think that you should get out, they’ll send you an alert. 

The monthly stock tips are the bread and butter of this service. So stock recommendations from market experts make up the bulk of what you pay for.

Best Buys Now

Best Buys Now are ten stocks you should buy today based on current market opportunities. They’re chosen out of a list of 300 different stocks and updated regularly. Like Stock Advisor picks, you can only get this by paying for a Motley Fool service.

Starter Stocks

Starter Stocks are a list of 10 recommended stocks for you to begin a portfolio with. This list is helpful for rounding out your investing strategy, especially if you’re new to this, but these picks are the same for everybody. This list changes monthly, so you’ll know that it’s fresh once you sign up.

Suppose you’re just starting to build a portfolio and want to start with a small number of high-quality stocks. In that case, signing up for Stock Advisor and checking out the Starter Stocks list is a step in the right direction.

Related: 3 simple model portfolios for DIY index investors

Community and investing resources

Finally, you’ll get access to educational resources and things to help you improve as an investor including every past stock picks Stock Advisor has made.

You’ll also join a community of over a million other subscribers where you can post and answer questions and see what other Motley Fool investors are doing.

Features and benefits

Now that we’ve covered the basic services and tools included with membership, let’s get into some of the other perks and benefits of being a member.

Instant alerts

There is an instant alert feature to add your favorite stocks to the platform and keep an eye on how they are trending. So if there are large price fluctuations, opportunities to buy or sell, or other situations, you’ll be alerted so you can know what action to take.

News

The Motley Fool puts together informative investment news articles and publishes these right on the main screen of Stock Advisor. This allows you to keep up on everything you need to know in the world of investing.

Historical stock picks

As a member, you’ll have access to Motley Fool’s Stock Advisor stock picks dating back several years. Even though the window of time to invest in past stocks may have come and gone, you can still see what their historical picks have been and how they have fared. And there may be a few stocks still worth investing in.

You can see how some of the historical picks have trended and potentially formulate your stock picks based on some historical recommendations made by the Gardners.

Live customer service

Suppose you have questions about the product itself and not investment-related questions. In that case, you can contact their customer service through the toll-free number and speak to a live person.

Message boards

This is a unique feature that I love. While there are tons of investment message boards out there, this one is specifically for Motley Fool Stock Advisor members. So you can feel welcome to ask questions and give opinions because you’ll be speaking directly with other members who have the same information as you.

Stock screener

Motley Fool Stock Advisor has an easy-to-use stock screener. You can enter the stock or sort by asset class, sector, dividend yield, volatility, and other filters. It’s not as robust as something you might see through a trading platform like E*TRADE, for example, but it’s relatively intuitive and user-friendly.

How to sign up

Signing up for Stock Advisor is easy. All you need to do is go to the signup page and select “Join Now.”

From there, you’ll sign up with some basic information including your first name, last name, billing address, and credit card information on the subscription page.

If you sign up right now, you’ll receive a discount of 50% off the usual price. This means you’ll pay a total of $99 for the first year instead of $199 but you’ll still get all the same benefits as if you’d paid full price. This introductory promotion is for new members only.

You will be charged right away for the first year of membership if you choose the annual subscription. You can also pay monthly, but this will cost you $39 a month and you won’t be eligible for a refund.

Each new annual membership comes with a 30-day membership fee refund period. So if you’re not happy with the Stock Advisor service, you can cancel within 30 days for a full refund and shouldn’t have any problems getting it.

Types of stocks

Stock Advisor usually picks growth stocks and blue chip stocks with high potential for long-term returns. This means you might see a variety of different companies and industries and different justifications for each stock pick.

Stock prices vary, but don’t expect to see any penny stocks or stock picks with very low purchase prices. If you want to sort by price or something else, use the Stock Screener on the Motley Fool website to browse different stock picks you’ve received from Motley Fool services or check out other stocks.

Stock Advisor performance

If you’re wondering how Motley Fool stock picks actually perform compared to the overall stock market and popular indexes, the answer is better (on average).

Since its inception in February of 2002, Motley Fool Stock Advisor picks offer a return of approximately 366% compared to the S&P 500’s 117% (returns valid as of 12/6/22). And according to Motley Fool as well as real users, Stock Advisor’s recommendations turn a profit around 60% to 70% of the time.

The rest of the time, Motley Fool might recommend selling a stock. Their team will keep an eye on all the investments they recommend to help you stay informed.

How much does Motley Fool Stock Advisor cost?

You can either pay monthly or annually for a Stock Advisor subscription. You’ll pay $199 for a year or $39 a month. Membership includes the two monthly stock picks, Best Buys Now, Starter Stocks, and educational resources.

But there’s always a sign-up offer. Right now, new customers can get a full year of access to Stock Advisor for $99, and that’s backed by the 30-day money-back guarantee.

But there are also other ways to use parts of Stock Advisor without paying for the whole package or bundle this Motley Fool service with others. Here are a couple of alternatives to paying for the Stock Advisor service on its own.

Stock Advisor report

$100 will get you one research report containing a single stock pick from Stock Advisor’s team and a thorough assessment of why it was chosen. This can be a good way to sample Stock Advisor if you’re really not sure about paying for an annual or monthly membership.

Epic Bundle

If you want more stock recommendations, more support, and just more from The Motley Fool, check out the Epic Bundle. This package includes a Stock Advisor subscription, Rule Breakers subscription, Everlasting Stocks subscription, and Real Estate Winners subscription. In total, this is equal to over six stock picks a month.

We won’t go into detail here about how these services differ, but we will say the value of Stock Advisor and Rule Breakers alone is equal to the price of this bundle. You’ll also get access to exclusive member workshops throughout the year.

Is Stock Advisor worth it?

The question of whether Stock Advisor is worth it ultimately comes down to how you’re going to use it. This stock-picking service is intended for long-term investing and emphasizes a buy-and-hold strategy.

It’s really important to remember that all stock recommendations assume a five-year investing horizon and are chosen for long-term performance. This means that you shouldn’t expect immediate returns and are strongly advised to hold each stock for at least five years.

If you’re looking for a quick payout, consider a different service. A trading platform optimized for day trading would be a better fit for investors looking to buy and sell frequently. But understand no brokerage platform can guarantee you’ll make money or give you a timeline for returns. And the more frequently you trade, the more frequently you’re opening yourself up to risk.

How to use Stock Advisor

According to Motley Fool, subscribers to Stock Advisor should focus on building a stock portfolio of between 25 and 30 different stocks, including stock recommendations from the service, and give their investments time to become profitable. This is the best way to make each stock pick count.

Here are a few more recommendations for using this service wisely.

Use all the resources – not just the stock recommendations

To take full advantage of Stock Advisor, you’ll want to spend time using all of the resources this service has to offer and not just buying the stock recommendations and calling it a day.

Read the investment articles, see what other Stock Advisor subscribers are up to, and check out the reports available to you. That way even if you only end up paying for this service for a few years, you’ll still be better off and a more knowledgeable stock investor.

Take advantage of the community too. If you just wait for those two stock picks to hit your inbox each month and never use the service besides, you’ll be missing out on some of the best parts of subscribing to Motley Fool.

Act quickly

Another piece of advice we have for making the most of Stock Advisor is to act quickly. As soon as those stock recommendations get to you, add them to your portfolio as quickly as you can because you’re most likely to get a low price if you buy right away. And remember, all other Stock Advisor subscribers are seeing the same picks as you, 

Keep track of when the recommendations are scheduled to arrive and do your best to have the funds ready when they do. Likewise, if Motley Fool’s team suggests you sell a stock that’s underperforming, don’t delay in getting rid of it to cut your losses and come out on top.

Be consistent

The best way to use the Stock Advisor program is to invest in both stocks that are recommended each month. You should generally invest the same amount in those stocks and keep pouring new money into your portfolio.

So, for example, if you choose to invest $1,000 in each of the stock picks every single month for the entire year, you’re going to be better off than you would be picking and choosing which of the investments you want to invest in or doing it at different dollar amounts. From a long-term perspective, it wouldn’t make much sense to invest different amounts in different stocks because this will somewhat defeat the purpose of diversifying and cause your investments to be skewed.

Follow the expert picks and invest as consistently as possible for the best chance at high returns.

Who is Motley Fool Stock Advisor best for?

Motley Fool Stock Advisor might be right for you if you fit any of these investor descriptions.

Experienced and busy investors

If you’re a more experienced investor with a lot on your plate, you can save time using Motley Fool Stock Advisor if you don’t want to do stock research yourself.

To genuinely get good at picking stocks, you have to understand the ins and outs of the companies that you’re looking at. But even if you’re skilled at doing this, it’s time-consuming.

So not only does this narrow the pool of investments to look for, but it serves up two picks every single month, so you can invest in those stocks and do nothing more with your portfolio if you want to.

Long-term investors

Stock Advisor is best for people who want to invest in individual stocks as part of their long-term investment strategy. It’s ideal for passive, big-picture investing and removes the headache of choosing stocks yourself.

Read more: Long-term investing: When is it a winning investment strategy?

Fund investors

If you’re someone who has traditionally only invested in things like ETFs or index funds, but you want to start picking individual stocks too, you might feel overwhelmed or confused about where to start. Stock Advisor does most of the work for you and you can trust that the stock picks you receive have been extensively researched – just not by you.

This service is also suitable for people who want to hedge their investment portfolio. Meaning, if you have mostly ETFs and index funds, and you want to take a little bit more risk by picking a handful of individual stocks, you can do this without going way too off-course in the stocks you’re choosing. 

Those who want an investment community

The message board within Stock Advisor is an excellent place to ask questions and bounce investing and stock ideas around with other like-minded members. If you want a group of people to talk investments with, and discuss Motley Fool stock picks with, Stock Advisor is a great option.

Who shouldn’t use Motley Fool Stock Advisor?

While Motley Fool’s Stock Advisor is great for some people, it may not be worth it for others. Here are a few types of investors who should think twice before signing up for a Stock Advisor subscription.

Brand new investors

If you have never invested before and haven’t started building a diversified portfolio of assets, you might want to hold off on signing up for Stock Advisor. Brand-new investors are better off sticking to an ETF, mutual fund, or robo-advisor until they own stocks in a variety of companies and industries before investing in a stock-picking service to expand on that.

While Stock Advisor is beginner-friendly and the Starter Stocks are helpful for creating a solid foundation of investments, this service is best for continuously contributing to your portfolio, not beginning it. And because it won’t personalize recommendations to your goals and needs and won’t offer portfolio monitoring services, it shouldn’t be used to build an investing strategy from scratch. 

Read more: How to invest: Essential advice to help you start investing

People who want exclusive or personalized picks

Suppose you’re someone who likes to go in and make stock picks for yourself by analyzing different companies or finding companies that nobody else knows about. In that case, this product will be frustrating for you because you are getting the same two picks that everyone else who subscribes to Stock Advisor is getting.

Anyone willing to pay for this service can get it and none of the stocks are chosen for you specifically. Motley Fool doesn’t take individual investor profiles into consideration at all when putting together Stock Advisor picks.

Day traders

Motley Fool’s investing philosophy is all about long-term returns. All Stock Advisor picks are given to subscribers with the hope that you buy and hold them for at least five years to give the stock market time to fluctuate and bounce back. So you should stick with a stock pick unless otherwise recommended.

If you’re looking to get rich quick and capitalize on short-term returns, Motley Fool might not be right for you. This platform as a whole is not ideal for day traders. For this, consider a trading platform.

Related: Here are the best online brokers for commission free trading 

Motley Fool Stock Advisor vs. competitors

The primary competitor of Motley Fool Stock Advisor is Morningstar Premium, but there are also a few other types of services that offer some of the same benefits and some benefits missing in a stock picker.

Robo-advisors, for example, are one alternative to stock-picking services. These are often very affordable because they use computer algorithms to recommend investments instead of real people, but they also provide more personalized services that cater to your individual needs. Using the information you provide about your risk tolerance and financial goals, a good robo-advisor (like a couple we’re going to talk about) will customize its recommendations to give you what you’re looking for and continue providing rebalancing and monitoring support.

That said, you won’t get the same level of justification about why each stock recommendation makes sense as you would with a stock advisor service like Motley Fool’s.

Here are some top competitors to Motley Fool’s Stock Advisor and how they compare.

Morningstar Premium

Morningstar Premium is similar to Motley Fool Stock Advisor in that it gives you access to detailed investment research, but Morningstar gives you more information and more stocks to look at. However, it’s not updated as frequently.

Morningstar works a lot like equity research firms. They have a core number of funds and individual stocks that they look at and analyze in-depth and give you information so you can still make your own independent decision. So recommendations are broader and less specific. If you like picking stocks for yourself, choose Morningstar. If you want specific stock recommendations, choose Stock Advisor.

For both Morningstar and Stock Advisor, you can find an in-depth analysis of specific stocks recommended. But with Morningstar, that analysis might be three to four months old. For the most up-to-date information, choose Stock Advisor.

Read our full review.

M1

M1 is a robo-advisor that works slightly differently than others. It allows you to pick individual investments as a part of your “pie” of total investments, including fractional shares. You can add and remove “slices of the pie” to achieve your target asset allocation. Your portfolio is automatically rebalanced, managed, and tax-optimized.

M1 is ideal for self-directed investors with some experience who want to choose their investments and execute them with one platform. Theoretically, you could use Stock Advisor and M1 together for a well-informed investing strategy, but if you’re looking for something to help build your portfolio and manage it for you, you’d probably prefer M1 over Motley Fool. And if you’re brand new to investing, neither M1 nor Stock Advisor would be a great pick.

Read our full review.

M1 Invest Disclosure: This article is not investment advice. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Brokerage products and services offered by M1 Finance, LLC Member FINRA/SIPC, and a wholly owned subsidiary of M1 Holdings, Inc.

Wealthfront

Wealthfront is another robo-advisor with a lot to offer, and it’s better for beginners than the other options we’ve mentioned so far. Compared to most robo advisors, Wealthfront asks a lot more questions about your investing goals when you first sign up, which can be helpful for newbies who aren’t quite sure what they’re looking for yet. And after the questionnaire, Wealthfront recommends a portfolio for you featuring a mix of ETFs.

Wealthfront and M1 are similar, so if your choice comes down to these two, choose M1 if you want the option to pick your own investments, and Wealthfront if you want more support in creating a portfolio and are looking for a hands-off investing solution.

But if you’re choosing between Wealthfront and Motley Fool Stock Advisor, you’ll need to decide if you’d rather build a whole stock portfolio or pick a few individual stocks at a time.

Read our full review.

MoneyUnder30 receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for each new client that applies for a Wealthfront Automated Investing Account through our links. This creates an incentive that results in a material conflict of interest. MoneyUnder30 is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.

Summary

Overall, Motley Fool Stock Advisor is an excellent product at a reasonable price for the value it offers. If you’re ready to purchase individual stocks, want help picking them, and you’re willing to pay for expert recommendations, this is a really solid choice with a performance that speaks for itself. In addition to 24 stock picks per year, you’ll receive valuable tools and resources to help inform the rest of your long-term, passive investing.

However, Stock Advisor has limitations. You can’t customize the type of recommendations you receive and you will get the same information as everyone else who has a subscription. If you’re looking for more personalization and help building a portfolio from scratch, consider an alternative like a robo-advisor.

If you do sign up, come back to our Motley Fool Stock Advisor review for tips to make the most of your subscription.

Read more:

• How to invest: essential advice to help you start investing
• 7 easy ways to start investing with little money