When it comes to well-known brands in the financial news industry, there are few companies that can compete with The Motley Fool. While we know that Motley Fool publishes hundreds of stock and finance articles, did you know it has a paid stock-picking service?
Stock Advisor Canada is one of The Motley Fool’s flagship services and has helped thousands of Canadians over the year. But is The Motley Fool reputable? Does it actually work?
Despite what you might think about paid stock-picking services, The Motley Fool has a long track record of success. In fact, over the past decade, Stock Advisor Canada has nearly doubled the performance of the S&P/TSX index. It has also provided over 40 stock recommendations that have provided over 100% returns during that time.
So while your experience with The Motley Fool might be limited to their informative articles or free podcasts, the company also has an impressive list of paid services.
Have I tried The Motley Fool’s services? Absolutely. So let me break down exactly what you need to know about The Motley Fool.
Is Motley Fool Reputable and Does it Actually Work?
First, it is difficult to argue that The Motley Fool isn’t reputable. The financial industry widely recognizes it as one of the most reliable and informative sources around. Not only does it have a proven track record but it was one of the first places I go to to get my financial news. Whether it is stocks, real estate, or cryptocurrencies, The Motley Fool has something for every type of investor.
Stock Advisor Canada is the Canadian division of its stock-picking service. In the Motley Fool’s home market of the United States, its Stock Advisor Service has had over 1 million subscribers. In Canada, there are currently more than 50,000 subscribers to the Stock Advisor Canada service. The Motley Fool has done an excellent job of creating a global community of ‘Fools’ that all follow the company’s investment strategies.
So how good is The Motley Fool at picking stocks?
I already talked about how Stock Advisor Canada’s returns have nearly doubled the returns of the S&P/TSX index. The impressive list of 40 stock recommendations of more than 100% includes Canadian gem Shopify and Latin American eCommerce giant MercadoLibre.
On average, stock recommendations from StockAdvisor Canada have returned 50% since The Motley Fool suggested them as stock picks.
See what I mean about an impressive track record?
Can The Motley Fool be Trusted?
The Motley Fool is a legitimately run business. The company is based out of Alexandria, Virginia, and was founded by brothers Tom and David Gardner in 1993. The Motley Fool has an interesting birth story as it was first founded through a series of April Fools joke ads that were meant to warn against investing in penny stocks.
If you have read a Motley Fool article or listened to their podcasts, you know what the company stands for. The Motley Fool is all about providing investors with financial independence by investing in great companies. Their strategies revolve around long-term buy-and-hold investing and finding cheaply valued stocks relative to their future potential.
With over 1 million subscribers and their content being consumed by investors around the world, I would say that The Motley Fool is definitely trustworthy. The podcasts are informative and easy to listen to and their articles are informative and rarely feel biased.
The stock-picking services might be their bread and butter, but The Motley Fool has plenty of free services to help investors succeed.
Is The Motley Fool Worth the Money?
This is a great question as I know some people are hesitant to pay for stock-picking services. For myself, I really just wanted to see if the stock recommendations were as good as they market them to be.
The cost is reasonable at $99.00 CAD per year or about $1.90 per week. The Motley Fool also has a 30-day full refund policy if you are not satisfied with its services!
So let’s break that down.
A one-time cost of $99.00 for the year is minimal when you consider what it costs to invest in other assets. In Canada, the average mutual fund MER is about 2.0% in 2022. This means you pay 2% of your total assets invested to fund managers. On an investment of just $10,000.00, you would pay $200.00 every year or double the cost of the Stock Advisor Canada subscription!
The MER for ETFs is lower than for mutual funds but can still add up pretty fast. An MER of 0.5% would still be $50.00 on an investment of $10,000.00. Considering that investing in individual stocks has historically outperformed mutual funds and ETFs, the $99.00 fee quickly becomes easier to digest. You also get access to the Motley Fool Canada community, historical stock recommendations, and company reports.
The Bottom Line: Is The Motley Fool Reputable?
The Motley Fool has one of the best reputations in the financial industry, hands down. The site offers incredible, free content on a daily basis. From stock analysis to financial education, or even just market news, The Motley Fool is a trusted source for the latest updates on Wall Street.
The Stock Advisor Canada service has provided investors with incredible returns over the past decade. My recommendation: do not get caught up on the annual price. You might be paying much more in fees to fund managers and not even realize it!
From someone who has used the service, the Stock Advisor Canada is worth it. Besides, if you disagree, you always have 30 days to get your money back! If you ask me, that is a win-win situation!