Motley Fool vs Morningstar: Individual Investments May Vary

Motley Fool vs Morningstar: Individual Investments May Vary

When it comes time to invest, making informed decisions is one of the best things you can do for yourself. After all, impulsive investing is closer to gambling, and likely won’t achieve the best results possible in the end. However, not all investors enjoy the luxury of time, where spending hours researching individual stocks is a practical option. That’s why many modern investors rely on portfolio recommendation services, which provide them with completed research and recommendations that they can implement right away. It’s important to note that these services only provide advice: you’ll still need to manage your investments through a brokerage!

In this article, we’ll be comparing Motley Fool vs Morningstar to see which popular service comes out on top. Although they both offer portfolio recommendations, the exact approach to investing varies from service to service. Fortunately, you’ll know which service is the best match for your particular investing style by the time you’re done reading this article. We’ll be by taking a look at Motley Fool’s Stock Advisor!

Motley Fool’s Approach to Investing

Motley Fool’s “Stock Advisor” has been offering investment advice since 2002. Since that time, its recommendations have generated a 356% return, far outperforming the comparatively meager returns of the S&P 500 (116%) as well as many other similar services. The Stock Advisor service provides members with monthly stock recommendations, all of which have been heavily researched by the experts at Motley Fool. The Fool selects recommendations with the intention of holding on to each investment for five years. Although, they will let you know if their recommendation changes. They also recommend holding a minimum of 25 different stocks in your portfolio for diversification and market protection.

The Fool’s Stock Advisor isn’t priced unfairly, but the upfront cost can be rather high (if you choose annual billing). Monthly billing is offered, though you will not be receiving the best pricing. For new members, a promotional offer lowers the cost of the first year’s service to $99. If you decide that the service is a bad choice for you, it’s possible to get a full refund within the first 30 days of service. For returning or continuing members, the annual cost doubles to $199 per year.

Motley Fool is Best for…

Investors with a more hands-off investment style. Using Motley Fool allows investors to take action right away using guidance from industry experts. However, they don’t have to keep a close eye on these investments after they’ve made them. Instead, the Fool will take care of that for them! For individuals who lack either the time or the drive to actively manage their portfolio, Stock Advisor is the ideal service. It only requires managing your portfolio once a month. You simply make the recommended changes, then wait for the next round of recommendations. This also makes the Fool a solid option for newer investors. It enables them to invest successfully despite lacking the experience to analyze stock reports on their own.

Morningstar’s Approach to Investing

Morningstar—founded in 1984—can’t directly compare to Motley Fool. While the Fool provides specific stock recommendations for its users, Morningstar opts for a more data-based approach. Morningstar gives its members access to investment research, recommendations, and insights. However, it doesn’t provide specific stocks or assets for you to invest in. Instead, the service assumes that you will use the platform to conduct your own research. Thus, you make independent investment decisions using the analytics the platform provides.

Morningstar Premium membership costs slightly more than access to the Fool’s Stock Advisor. Be prepared for an annual charge of $249! While this is certainly a well-sized chunk of change, you’ll have instant access to all of Morningstar’s analytical data and information. The platform provides ratings for various potential investments. This allows you to sort through and read expert data-based opinions on each. It also enables you to track stocks, see data behind your own portfolio, and stay up-to-date on the various factors affecting your portfolio’s performance.

Morningstar is Best for…

People who prefer to play an active role in their portfolio. If your style of investment is largely centered around compiling and comparing data then Morningstar should be your first choice. Providing subscribers with plenty of information and insights to form their own opinions, Morningstar enables active investors to make data-driven decisions. All without having to gather data themselves. Unlike Motley Fool, Morningstar doesn’t provide monthly stock recommendations. This is excellent for those who prefer to pave their own paths. However, since it doesn’t provide exact recommendations, it’s not a great option for those with limited time.

Invest According to Your Style

Both Motley Fool and Morningstar are excellent options for investors. Although there are plenty of alternative options available as well. Ultimately, the best service for you depends on your particular investment style. With Motley Fool, you’re entirely reliant on their stock selections. However, implementing their suggested investments takes very little time. You’ll also be receiving specific direction from a team with a historical streak of success.

On the other hand, Morningstar provides more experienced investors with invaluable insights and data. This allows them to adjust their portfolios with a data-driven sense of certainty. Nonetheless, newer investors may find the plethora of data overwhelming. Thus, may not be able to realize the service’s full value during the learning stage.

For less experienced investors (or those with little time), we recommend Motley Fool. For more experienced investors with plenty of time to pool over data, we suggest Morningstar. Which service you use ultimately depends on you, but you can’t go wrong with either. Either way, you’re almost guaranteed to start seeing a positive performance from your portfolio. Why wait: get started with either Motley Fool or Morningstar today!

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