The Motley Fool Stock Advisor and Rule Breakers programs are among the world’s most respected stock selection services. Launched in 2002 and 2004, respectively, hundreds of thousands of investors rely on Tom and David Gardner’s choices each month to make their next move.
Despite this, some Motley Fool investors are either skeptical or outright dismissive of the product. Although our Motley Fool review has been very positive about the quality of the platform, we think it is only appropriate to review some of the most common complaints in a fair and balanced manner.
Let’s dissect some of the most prominent negative reviews about the Fool and its stock selection programs.
The fool is not God. The Gardner brothers are not market insiders, and they do not cooperate with Wall Street. The fact is, sometimes they make mistakes.
What makes the platform so effective at what it does is its model. All members are advised to be willing to keep their stock options for between three and five years. The ideal portfolio will consist of a minimum of 25 recommended Motley Fool stock options.
Using these numbers, the Stock Advisor program has returned 637% since 2002 as of this writing. Compare this with a return on the S&P 500 of 148%.
Even when taking on losses, the profits from other recommended portfolio choices should dwarf them.
The fact is that if you throw all your money into a single stock, you may well lose money. In 2022, the market is volatile and the pandemic will only drive this forward. Even the most well-known stocks are experiencing massive turbulence and you need to be willing to push through it.
“Gardner Brothers are market makers / insiders”
Believe it or not, this is one of the most common points found in negative reviews of Motley Fool.
The short answer is that this is nonsense that has been expelled by bad investors and conspiracy theorists. Logically, Gardner Brothers has no reason to pull the wool over anyone’s eyes. If they exploited investors to enrich themselves, it would have become apparent years ago.
The Fool’s future depends on investors’ positive returns. Without producing results, the Fool would have gone bankrupt years ago. No market scam can last that long without discovery.
“The variegated fool told me to sell early”
No one can accurately predict the market. The market is moving for something and nothing. Although the Fool advises members to be willing to hold their shares for between three and five years, things change sometimes.
For example, if a company was chosen as a recommendation because of their dynamic founders, this change has significance if the founder suddenly resigns.
You should not worry about early sales warnings. It does not make them wrong; it makes them diligent. It would be more worrying if they did not issue early sales warnings.
“Stock recommendations cause market turbulence”
This is partly true. When the Fool recommends a company, especially a smaller one, it can cause the stock price to rise. Likewise, if they issue a sale order, it can cause the stock price to fall. We’ve seen that before.
However, these changes in the market rarely cause any lasting changes in a company’s stock price. Turbulence caused by Fool’s activities typically disappears within a few days.
“Too much advertising”
As much as we love the variegated fool at Modest Money, this is the only complaint we will uphold. The Fool’s marketing machine uses press techniques to encourage users to upgrade their accounts to more expensive subscriptions.
Subscribers can expect numerous emails with useful information and marketing emails that tell them about other programs. Note, however, that it is possible to opt out of promotional emails.
While this is a minor complaint, we understand why this may come to some users of the Motley Fool program.
“Aha! Motley Fool Asset Management proves that Fool is a scam!”
Perhaps the most frivolous complaint that pops up regularly. Motley Fool Asset Management is the sister company to Fool and has lots of stocks and ETFs. Some people argue that this proves that Gardner Brothers is cheating retail investors on behalf of hedge funds.
A particular TrustPilot complaint even went so far as to claim that the platform issues stock orders for stocks that Fool wants to short and buy orders for stocks they are about to go on.
The truth is that the Gardner brothers are rich men, and housing their assets in a business allows them to save millions in taxes. It is not proof of a scam. It proves that they are not stupid.
Ignore the conspiracy theorists. The Fool’s long-term results speak for themselves.
Conclusion – Do you have to trust the motley fool?
Our Motley Fool review proclaims that this is the best single selection service available right now. We maintain that Fool is still the best stock picking service. Most complaints have no factual basis or are wrapped up in crazy conspiracy theories.
Right now you can take advantage of Fool’s introductory offer. In your first year, you can take advantage of their Stock Advisor program for only $ 99.
Sign up for Motley Fool and get your first year for $ 99 now.