Many investors, both beginners and experienced, rely on research to inform and enhance their investment decisions.
One of the most popular and well-known research newsletters is the Motley Fool.
Their lighthearted designs, loud marketing, and clever sales tactics can sometimes beg the question, “Is the Motley Fool a scam?”
When it comes to investing your hard-earned money…
…performing due diligence on your investment research is paramount.
So, let's take a deep-dive into who the Motley Fool is, and what makes them a reputable source of investment information.
What is the Motley Fool?
Many people do not even know what the Motley Fool is before accusing it of being a scam.
So what (or who) is the Motley Fool?
Quite simply, the Motley Fool is an investment research and analysis company that offers free and paid information for investors.
They are most well-known for their Stock Advisor service, which is a subscription-based monthly newsletter.
The newsletter offers stock picks, in-depth company analysis, recommendations to buy stocks, and much more.
Every month, the two founders each submit a stock pick that they and their teams have spent the prior month researching.
This includes fundamental and technical analysis.
The picks also include market research for the sector that the company is in, and they provide a strong case for why they believe that stock is better than its competitors.
What is a scam?
Technology is a blessing and a curse.
The internet allows investors to access more data and research than any other time in history.
Unfortunately, the internet also opens the door to scams and false salespeople.
Thankfully, the government-sponsored, investor.gov, offers a few red-flags for investors to watch out for fraudulent investments.
Here are three of the top red flags, and how the Motley Fool is differentiated from them.
1. “Risk-free” investment opportunities
When anyone promises “risk-free” investments…
…you should run the other way!
All investment has the potential for loss, and The Motley Fool does not say otherwise.
On the contrary, the company is well aware of the risk, which is why they spend so much time and resources on conducting a thorough analysis of the stocks they recommend.
2. Asked to pay for investments by credit card, gift card, or wiring money abroad or to a personal account
This is the classic foreign prince asking for help scam.
The way this works is someone will email you asking for financial help.
They may promise to pay you if you can transfer their money to a foreign account.
They usually have convincing stories, and once you send money somewhere, you never hear from them again.
The Motley Fool sells a service.
They will never ask you to send money to a third-party personal bank account.
3. Promises of great wealth and guaranteed returns
The Fool is very proud of their work, and they share their top-performing stock picks to validate their services.
However, they do not promise that you will achieve great wealth and guaranteed returns.
Some critics of The Fool that have not conducted any research think that sharing a stock pick that returned 233% is guaranteeing those results for every investor.
This is not the case!
These are some of the biggest indicators that you are involved in a potential scam.
None of these apply to the Motley Fool's business plan or the way that they market their service.
Is Motley Fool a Scam?
Now that we can identify a scam…
…is Motley Fool a scam?
The Motley Fool has a vital distinction from trendy investment newsletters as well as other established publications.
What is it?
To the novice, investing is a daunting endeavor.
And it should be…
…because YOUR money is literally at stake.
So, what do most people do when they embark on a new venture where capital is at risk?
Smart people seek counsel.
The Motley Fool has a strong reputation for providing vetted research, detailed analysis, and consistent performance to both its paid and free members.
They care about their customers as well.
Paid members have access to a wide array of customer service specialists to assist them with any questions or clarification on stock picks and analysis.
Motley Fool History
Brothers David and Tom Gardner founded the Motley Fool in 1994.
Their mission is to help retail investors by providing insight and access to excellent stock market research.
They wanted to give “Main Street” similar tools to Wall Street.
Since founding the company, they have grown to be an international company with many services and newsletters for investors to utilize.
Not only have they been in business, they continue to grow and launch new services to better serve the needs of their clients.
Scams are notorious for their short lifespan.
They pop up, plaster marketing and promises everywhere, and then they vanish without a trace – other than some unlucky “customers.”
You can also visit Motley Fool in the US, in the UK, Australia, Hong Kong, Canada, Singapore, and Germany.
They have many physical offices with real employees conducting real analysis of the investments that they recommend.
Their physical presence is impressive and should be reassuring for those investors questioning the legitimacy of The Fool.
Fake companies use PO boxes and vague email addresses to prevent their unsuspecting “clients” from following up on any of their false promises.
To top it off, the Motley Fool has multiple awards from Glassdoor for being a great place to work.
Motley Fool is NOT a Gimmick
Many financial scams require immediate action and promise instant results.
They want you to pay for something that sounds too good to be true and do not deliver.
While the Motley Fool has an intense marketing campaign…
…they are very diligent, and long-term focused.
They hold their track record of success and transparency in very high regard.
The founders have this to say about their business model on their website:
“We believe in treating every dollar as an investment in the future you want to create. We believe that investing in great businesses, for the long term, is the most effective path to wealth. We believe in the power of a community to learn and grow together. We believe in keeping score and being transparent in our investment performance. We strive to fulfill our purpose by truly serving every Fool, from our employees to our members to our community.”
That does not sound like a get rich quick gimmick at all.
Additionally, the Motley Fool is not an investment manager; they are a service provider that publishes stock picks and investment recommendations.
They are selling a subscription; they are not promising to take your money somewhere and make you rich.
*** SPECIAL ALERT -- Thursday, January 21, 2021 -- MOTLEY FOOL STOCK ADVISOR RECAP–2020 YEAR END SUMMARY (ONE STOCK HAS GONE UP BY 707%!) ****
The year 2020 is finally over. It was tough in so many obvious ways, but if you were a Motley Fool subscriber you are smiling given that 21 of the Motley Fool's 24 stock picks for the year are up; and the average return of those 24 picks is +78% compared to the SP500's 19% meaning you BEAT the market by 59% this year!
We have been tracking ALL of the Motley Fool stock picks since January 2016. That's 5 years, 60 months and over 120 stock picks. As of Thursday, December 31st, five of their 24 stocks picks from 2020 have already more than doubled (NVTA, ZM, SHOP, ZM (picked 2x), CRWD) and another one (TSLA) has increased 707%--all in just the first 11 months of 2020. In addition, 10 of their 2019, 12 of their 2018,11 of their 2016 and 15 of their 2016 picks have also more than doubled. Best of all, over these 5 years, the average stock pick is up 218%. That beats the SP500 by an average of 162%. And that's even accounting for all of this COVID mess that has wreaked havoc on most stocks. BUT, the Fool has done so well because they have quickly identified stocks this year that will perform well in the post-COVID world. THAT is how the Fool consistently does so well--they adapt and constantly pick stocks before everyone else realizes the opportunities.
- Lemonade (LMND) — Dec 2, 2020 pick is up 52%
- Pinterest (PINS) — Oct 1, 2020 pick is up 58%
- Fiverr Intl (FVRR) — Sept 3, 2020 pick is up 79%
- Crowdstrike (CRWD) — June 4 pick is already up 112%
- ServiceNow (NOW) — May 7 pick is already up 48%
- Shopify (SHOP) – April 2, 2020 pick and it is already up 238%
- Zoom Video (ZM) – March 19, 2020 pick and it is already up 228%
- DexCom (DXCM) picked Feb 20, 2020 right before the market crashed and it is still up 18%/li>
- Tesla (TSLA) picked January 2, 2020 before the crash and it is up 707%
- HubSpot (HUBS) picked December 5, 2019 and it is up 163%
- Netflix (NFLX) picked November 21, 2019 and it is up 71%
- Trade Desk (TTD) picked November 11, 2019 and up 393%
- Zoom Video originally picked Oct 3 and it is up 428%
- SolarEdge (SEDG) picked September 19, 2019 and it is up 251%
- Wix (WIX) picked May 2019 and it is up 99%
** If you had been a subscriber, then you would have these profits as of December 31st, 2020
Now, no one can guarantee that their next picks will be as strong, but our 5 years of experience has been super profitable. They also claim that since inception, their average pick is up 570% and now we believe them. Many analysts are saying that we have passed the bottom of this COVID crisis and "certain" stocks will recover quickly and be the new leaders. So make sure you have the right stocks in your portfolio.
Normally the Fool service is priced at $199 per year but they are currently offering it for just $99/year if you click this link
FYI -- Updated as of January 16, 2021 -- Thank goodness 2020 is over and we look forward to life returning back to normal in 2021. But the one GREAT thing about 2020 if you were a Motley Fool subscriber was 21 of their 24 2020 stock picks are up; and EIGHT (TSLA, NVTA, ZM, SHOP, ZM (re-recommended), CRWD, CRWD (re-recommended), and FVRR) have now at least DOUBLED! The average return of their 2020 stock picks is now +95% compared to the SP500's +19%. Their top performer was TESLA which is now up 860% since they recommended it in January 2020. In addition, their 2019 stock picks were awesome too and they are now up 121% beating the SP by 87%; and their 2018 picks are up 209% beating the SP by 165%. Now for 2021, with a new President and a COVID vaccine, most analysts expect the market to continue up, but make sure you have the right stocks!
In fact, over the last 5 years the average Fool stock pick has more than tripled (up 214%)! This time period covers the 2016 election, the Trump administration, the China trade negotiation, COVID, and now the Motley Fool is getting ready to release their stock picks for 2021 and the Biden administration. Don't miss out on the Motley Fool's next stock pick. Here is the schedule for their next TRADE ALERTS:
- January 21, 2021 - David's New 5 Best Stocks to Buys Now List
- January 28, 2021 - David's New Stock Recommendation
- February 4, 2021 - Tom's New Stock Recommendation
- February 11, 2021 - Tom's 5 New Best Stocks to Buy Now List
Motley Fool Guarantee
Thanks to the Motley Fool's longevity and transparent practices, they have made a name for themselves where it counts; their wallet.
They offer a 30-day money-back guarantee with their paid Stock Advisor service.
You can try it out, invest in their recommendations, learn how they analyze the market, and see how they operate.
At the end of the day, you can cancel with no risk if the service is not the right fit for you.
This guarantee is one of the most important and tangible reasons why the Motley Fool is not a scam.
You may love their services, or you may not, but their history and practices are those of a real business.
…Motley Fool is NOT a scam!