Motley Fool’s Stock Advisor?

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The last time I saw the stock markets and world financial systems drop into the depths they are in, it came roaring back for a number of years.  Prior to that, in my lifetime, I’ve seen it happen once before that.  Simply put, business cycles occur and if people have faith that the world is NOT going to end, people will become confident again, investors will push the stock markets up again and right now is one of the best opportunities to get back into the stock market.

As a result, I’m quite seriously looking at investing right now.  However, just as cynical as most people can be when seeing financial markets collapse all around us and some of the biggest financial institutions around us go bankrupt or get bought for pennies on the dollar, I am very skeptical & need to do a bit of research before purchasing something.  I got the regular marketing email from Motley Fool’s Stock Advisor service recently & boy do they write a good sales piece about their service!  I almost bought on the spot, but…

I do a google or two with the same phrase and get these bits of advice as a result:

“Like any sort of investment plan/ service they can go back and pick the stocks with the best numbers over a carefully selected time and say how great they were. They can even say they picked them. But they probably also picked ones that did horribly over certain periods too. They want to show the best side. Generally if an investment has been having a hot run, it is probably about due to go the other way for a while to get its returns back to the average. See what the dot coms did? Nothing offers above average returns forever. The Fool does offer good basic advice but I would be careful about specific suggestions. I am mostly using low cost index funds for my investments. And a Utility stock.”

“If you look at Hidden Gems or their Funds investor , you will see a very significant return but when you look at the last twelve months , for the most part, each pick has lost money. They take the total returns for the last 2-3 years – when the market was hot – and then give you their returns. The other thing they do is get a home run stock say a 75% increase for one month which then offsets the next seven months of losses.

They do not try to hide anything . They are completely honest and up front . Otherwise they would not show the bad with the good. But I agree with the other respondent that to make money you need to buy every monthly selection to catch the “homerun” pick and offset the bad ones.
I subscribe to their Retirement Rules ” newsletter which has a model portfolio but does not try to pick stock monthly. This newsletter is one of the best I have ever subscribed to . It gives great advice, has excellent tools and welcoming message boards.
Two folks respond to the question about the legitamacy of this service & say it’s no better than most services and are usually not worth the money.  They HEAVILY recommend DRIP plans though for their long term viability.

Here’s another person supporting DRIPs:
“I have subscribed to many, many financial newsletters over the years, and honestly, their picks are not much better than the experienced investor on Yahoo.

Motley Fool is good. However, like everyone else, they have bad picks. But I like the straight forward, honest approach they take. So many of these financial newsletters only post their losers, and try to let the losers fade out of memory.

I would not pay more than $150 annually for any newsletter, and trust me, most of them charge much more than that.

My favorite Free site is :

low-cost-stock-recommendations.com

“It is just information provided. My best suggestion is to make use of strategies like Retirement Plans and DRIP Plans and thing long-term.”

Here’s one of the better sets of tips along with a link to something that’s free & similar:

Well, I guess it depends on what you are into.  Motley Fool touts promising small caps; Weiss touts blue chip value companies.  Fools’ formula is also on the same Intuit website for free. 😉  I actually use both plus Hagstrom’s Warren Buffett’s Way depending on what the company is.  Plus my own research methods also.  I suspect we are going to transition to growth stocks being more slightly in favor over value stocks so I would advise to be a little more careful in picking value stocks right now.  Of course, one must be careful in picking any stocks.

http://www.quicken.com/investments/strategies/

Some other person recommended as a similar service this site: Investment Quality Trends

Right now, I’m leaning towards not getting it.

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