Motley Fool Performance – June 2014

Motley Fool Performance – June 2014 4.10/5 (82.00%) 10 votes

Here are the latest performance stats for all the Motley Fool services, since their inception. Not all of these are available on their public site.

The calculations follow the official methodology used by each of the services.

Check the Performance category posts on the right to see if more recent stats exist.

If you find these helpful, please take a second to rate the content by clicking on the stars above. You can sign up via email (in the sidebar on the right hand side) to follow my blog and get instant notifications when my monthly performance stats are updated. And follow me on twitter (@motleyfoolrview, note the missing “e” in “review”).

And of course, leave a comment below and let me know what you think.

Performance Highlights

June was a good month for the markets and as a result a good month for the Motley Fool services overall. If you are in the business of investing in individual businesses (stocks), months like this remind us why it’s valuable to look at stock performance relative to an index or benchmark. A rising tide lifts all boats as they say so if you are going to take on the extra risk of investing in individual stocks, you want to be sure that they are outperforming what you might have achieved by simply parking your money in an index fund.

To that end, the services that really shined in June were Supernova Odyssey, the Everlasting Portfolio, and Rule Breakers which were all up 40% or more month over month in their performance vs. the S&P, but not surprisingly those services have been among the most volatile in the past year. Don’t underestimate that volatility of course, because it works both ways.

 

 

 

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MF Performance Stats - 2014-06Jun

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Motley Fool Performance – May 2014

Motley Fool Performance – May 2014 4.45/5 (89.09%) 11 votes

Here are the latest performance stats for all the Motley Fool services, since their inception. Not all of these are available on their public site.

The calculations follow the official methodology used by each of the services.

Check the Performance category posts on the right to see if more recent stats exist.

If you find these helpful, please take a second to rate the content by clicking on the stars above. You can sign up via email (in the sidebar on the right hand side) to follow my blog and get instant notifications when my monthly performance stats are updated. And follow me on twitter (@motleyfoolrview, note the missing “e” in “review”).

And of course, leave a comment below and let me know what you think.

Performance Highlights

The overall market in May was less volatile than prior months, with the S&P moving up towards 2000. However, the Russell 2000 which is an index of small cap stocks (which make up a lot of the more popular Motley Fool services) remained almost as volatile as in the past few months, even testing its Year To Date lows that it saw back in February. At the risk of sounding like a technical trader, it didn’t break through those lows, so perhaps a lot of the lower conviction investors have been shaken out of the market, and we’ve reached some more stability. I’m certainly no market forecaster, but if that is true, it bodes well for growth-oriented investors, or at least provides a good time to get into the market.

And that also means the returns on the Motley Fool Services may have stabilized as well. In May, most of the services gained in their overall performance, with the biggest month over month gains in Stock Advisor and Supernova Phoenix, in line with the overall market.

 

 

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Motley Fool Performance – April 2014

Motley Fool Performance – April 2014 3.27/5 (65.45%) 11 votes

Here are the latest performance stats for all the Motley Fool services, since their inception. Not all of these are available on their public site.

The calculations follow the official methodology used by each of the services.

Check the Performance category posts on the right to see if more recent stats exist.

If you find these helpful, please take a second to rate the content by clicking on the stars above. You can sign up via email (in the sidebar on the right hand side) to follow my blog and get instant notifications when my monthly performance stats are updated. And follow me on twitter (@motleyfoolrview, note the missing “e” in “review”).

And of course, leave a comment below and let me know what you think.

Performance Highlights

April was another volatile month for the markets, although again the S&P finished just slightly up from March. For all the doom and gloom and bubble talk out there, the S&P is still up for the year. Between earnings season, and the mid-April dip (when the S&P hit it’s low point for 2014), these are the times that test us as investors.

For a second month in a row, a number of the Motley Fool newsletters lost ground to the S&P, as growth stocks continued to be the whipping boys of the markets. In fact, the only service to gain ground was Income Investor (forgive me if I won’t count Special Ops which gained a point as well, from -73% to -72%). On the opposite end of the spectrum, Supernova Phoenix lost over 50% of its lead over the S&P, giving up 9 percentage points since March. For a portfolio geared towards retirement age investors, that kind of volatility is especially painful. It’s something to keep an eye on, but I wouldn’t panic yet.

 

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Motley Fool Performance Stats - April 2014

 

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Motley Fool Performance – March 2014

Motley Fool Performance – March 2014 4.11/5 (82.27%) 88 votes

Here are the latest performance stats for all the Motley Fool services, since their inception. Not all of these are available on their public site.

The calculations follow the official methodology used by each of the services.

Check the Performance category posts on the right to see if more recent stats exist.

If you find these helpful, please take a second to rate the content by clicking on the stars below. You can also leave a comment or sign up via email to follow my blog and receive regular updates. If I get enough feedback that my readers find this sort of information, I will provide updated performance stats on a regular basis. Also, please people, let me know what you want to see more of in the way of stats.

Performance Highlights

March was a mixed bag for the market. It felt more volatile, but the S&P was actually up slightly for the month, while the Russell 2000 (an index for Small Cap equities) was down, but only slightly. But as you will see below, the Motley Fool services generally took a step back as growth and momentum stocks felt the brunt of the volatility.

But even as services like Rule Breakers, Million Dollar Portfolio, the Everlasting Portfolio, and Supernova took big hits in their performance vs. S&P in March, the Income Investor and Inside Value services maintained their steady performance trends.

But I would highlight that almost all of these services continue to outperform the S&P over the long term, even as they take these steps backwards. And as I suspect that April and maybe even the next couple months will bring us even more volatility, it might be more prudent to focus on the “Hold” part of of “Buy and Hold”, and wait for the market to settle a little bit before investing too much new cash, especially in growth and small cap stocks.

 

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MF Performance Stats - 2014-03Mar

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More Details on Motley Fool One Separately Managed Accounts 4.40/5 (88.00%) 10 votes

Motley Fool One continues to release more information related to their newest Wealth Management feature: Separately Managed Accounts (SMA’s). Recently they revealed minimum portfolio sizes for their SMA counts, as follows:

  • Motley Fool One Everlasting Portfolio: $35,000
  • Supernova Odyssey: $25,000
  • Supernova Phoenix: $35,000
  • Million Dollar Portfolio: $45,000
  • Motley Fool Pro: $300,000

As I’ve stated in the past, given the prices of Motley Fool One, you’d need a portfolio of at least $100,000 for the membership to be worth the cost. So the above are really bare minimums to participate and not practical portfolio sizes. The much larger $300,000 limit for Pro is due to the complexity of the strategies they employ.

You are also able to set up more than one SMA, so you could also allocate some of your account to multiples of the above, subject to the minimums of each.

Members are able to transfer over existing taxable accounts or IRA’s (including Roth IRAs), but not any employer sponsored accounts such as 401k’s. If any of these accounts hold existing stocks that are not part of the portfolio SMA that you will be following, those stocks will automatically be sold. So if you are considering participating in an SMA, make sure you keep this in mind.

And finally, although IRA’s can be accepted, the Motley Fool suggests using taxable accounts, because IRA’s often have contribution limits which could prevent you from following all the trades.

Let me know if you have any additional questions, and I’ll see if I can answer them.

 

 

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Is Motley Fool A Scam?

Is Motley Fool A Scam? 3.25/5 (65.00%) 8 votes

Is Motley Fool A scam?

Apparently that is a question on a lot of people’s minds out there. I know this because when I review my website metrics for what phrases people are googling (or binging or yahoo’ing or otherwise searching the Web for) when they find my site, that phrase shows up with surprising regularity. When I first saw it I admit I laughed a little bit, but after more than a year of running this site, the phrase continues to show up with alarming regularity, and it got me to thinking.

The term “scam” is a highly charged word, particularly as it relates to financial or investing services. To call the Motley Fool a scam is to accuse it of the worst crime imaginable to a possible investor – namely, that it will knowingly cause you to lose money through deceit and misrepresentation.

This is much different than asking whether the Motley Fool is any good or worth your money. Those are reasonable questions that any informed consumer asks themselves. However, to ask if they are a scam infers a lack of trust from the get go. It’s a question that already assumes some level of guilt on the part of the Motley Fool. And for a service that prides itself on transparency it begs the question what are they doing wrong that people perceive them as a possible scam? I’m pretty sure I know the answer.

No, the Motley Fool Is Not a Scam

So let me say right off the bat that Motley Fool is not a scam. As a member for 7 years, I can unequivocally say that the Motley Fool has some of the most customer friendly policies I have ever experienced in my life, to the point where I wonder sometimes how they are able to not only stay in business, but apparently thrive. Every one of their newsletter services offers a month long trial membership whereby you get full access to the service and can get a full refund after 30 days, no questions asked. Many of their premium services offer a full 1 year money back guarantee – not a prorated amount, but a FULL money back guarantee. I have said this before but I have been a member of their most expensive Motley Fool One service for just under a year now, and I could call them up right now and get every single penny back. What other business out there provides such generous terms?

What about the quality of their services? Motley Fool is not for everyone. They are long term buy and hold investors; they are not active traders. That style can be frustrating for some, especially when one of the first Motley Fool recommended investments they make loses a bunch of money right out of the gate. But their performance is generally very impressive, as my monthly performance reports show. Sure there is some survivorship bias here as some of their less successful services have been shut down and don’t show up in their performance statistics. And you can argue forever about whether their use of average returns since inception versus the S&P is the best performance metric (sort of like arguing about who is the greatest baseball player of all time) but it’s undeniable that they have had great success. And the Hulbert Financial Digest recently named 3 of their newsletters as the top 3 investment newsletters out there. So they must be doing something right.

But Wait There’s More! Act Now And Get a Free Toaster

So why do so many people need to ask the question as to whether Motley Fool is a scam or not?

Whenever I tell my friends or family about how great the Motley Fool is, and refer them to a sign up page, I usually get the same response: “Are you sure? Their marketing sounds so cheesy. I feel like I’m watching a late night infomercial.” At which point I am put in that uncomfortable situation of having to make excuses for them like when you bring around that new girlfriend that your friends don’t really like: “I promise she’s a really great person – once you get to know her.

But they are right. Motley Fool marketing is embarrassingly hyperbolic. Their marketing campaigns are riddled with phrases like “we will reveal the once in a lifetime investment opportunity that could literally revolutionize everything you thought you knew about transportation” or “apply quickly to see if you are one of 1 in a 1000 applicants qualified for our new one of a kind service” or “find out why we think this recommendation that has already returned over 1000% could still return another 1000%”. These are the high pressure, “promise the moon” marketing tactics of get rich quick scams. This is the language of penny stock purveyors and not the language of the intelligent, thoughtful, dedicated, and actually likeable advisors and team members who work at the Motley Fool.

The over the top marketing has been a subject of many posts on the Motley Fool boards, with many other long time members voicing similar complaints. In response, some of the Motley Fool advisors have alluded to also being unhappy about the approach as well but stated basically that the marketing department is separate from the investment services and beyond their control.

But ultimately that marketing team rolls up to the CEO, Tom Gardner, co-founder of the company. Tom and David Gardner both cherish integrity in the leadership teams of the companies in which they invest. Most of how they run their own company reflects this.

So why do they then allow these over the top, marketing campaigns that actually undermines the trust they seek to build and the great work done by their investment advisors? I can only conclude that the marketing must be wildly successful. Why else would they take that approach unless it works to brings in a ton of revenue for them?

Ultimately the Motley Fool is a business and I accept that their marketing must build excitement and attract customers. But they should take a lesson from one of their favorite CEO’s, Steve Jobs of Apple, whose marketing inspired the unrivaled loyalty of legions of fans without coming on like a used car salesman. After all, the Motley Fool is actually a great investment service – once you get to know them. 

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Motley Fool One Prices: March 2014

Motley Fool One Prices: March 2014 3.42/5 (68.42%) 19 votes

Here are the latest Motley Fool One membership costs, as of their March 2014 membership drive:

  • 1 year membership: $7,999/year
  • 2 year membership: $12,999 ($6,500/year)
  • 3 year membership: $15,999 ($5,333/year)
  • 5 year membership: $17,999 ($3600/year)

They also offer a $1000 early acceptance discount, and even more valuable, a 1 year FULL money back guarantee on all of the memberships (yes that includes the 1 year membership, so you could in effect use the service for free). Plus if you are an existing subscriber to any of their other services, you can count that cost against the Motley Fool One cost.

The prices continue to increase with each new membership enrollment, particularly the 5 year memberships. Last October, the cost of a 1 year membership was $7499, so they have increased that now by $500. However, the price of a 5 year membership has gone from $14,499 to $17,999 which is a full $3500 increase (which is $700 year). It is quite a steep increase but they are adding a potentially very valuable SMA service to the Motley Fool One offering. So at least the hike comes with additional benefit. Read my post here about why I think that new SMA service could be a game changer. But it nevertheless makes this much more of a premium service, catering to those with large portfolios.

Read all my Motley Fool One coverage here. And follow me on Twitter at @motleyfoolrview.

 

 

 

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Motley Fool One Introduces A Game Changing New Feature: Separately Managed Accounts 5.00/5 (100.00%) 1 vote

Motley Fool One is opening up its membership next week, and they are also introducing an intriguing new feature, exclusive to their members: Separately Managed Accounts (SMA’s).

From their FAQ:

“A separately managed account is an account at Interactive Brokers in which Motley Fool Financial Planning does the investing for you, following the strategies of the Motley Fool real-money portfolio service(s) that you choose, including Motley Fool Pro, Million Dollar Portfolio, Supernova: Odyssey 1, Supernova: Phoenix 1, and Fool One‘s Everlasting Portfolio.”

So basically, you open up an Interactive Brokers account, transfer in money and/or existing equities, choose one or more of the premium services to follow, and they will execute the exact trades on your behalf, based on percent allocations to match your portfolio size. Other than standard trade commissions, there will be no additional fees beyond the Motley Fool One membership. And only equities that are part of those services can he held in the account, as I understand it (so if you own a Uranium penny stock that your Uncle recommended, you can’t hold that here).

Members and potential members have been requesting this feature for a long time apparently, either because they don’t have the time to manage their own accounts (or don’t want to spend the time) or lack the comfort level or conviction to execute their own trades, and would rather have the Motley Fool facilitate all the transactions on their behalf.

Possible Game Changer for the Motley Fool

What’s interesting about this feature is that I think this opens up a potentially vast new market for the Motley Fool. Previously, Motley Fool One was best fit for fans of the Motley Fool and/or people who wanted to spend a lot of time researching and managing their own investments. Members had access to a ton of content, and but you had to filter through the information and trades that were of interest to you. So unless you were a general Motley Fool fan, Motley Fool One was not a very efficient way to manage your investments. Many people were paying money to a financial advisor to manage their investments in addition to their Motley Fool memberships.

Now with these SMA’s, the service will appeal to a much larger audience of people who can compare the cost of a Motley Fool One membership to the fees they are paying their own financial advisors. With typical SMA fees running at about 1.5% or more of assets under management (i.e. portfolio size), anyone with a portfolio of around 250,000 suddenly has a probably lower cost alternative (assuming a Motley Fool One membership cost of approximately $2500/year). Suddenly the cost of Motley Fool One can be not in addition to their Financial Advisor fees, but instead of them. The access to everything else Motley Fool One offers would just be icing on the cake, and the service would still be cost effective even if those members didn’t avail themselves of any of it.

So this could be very good for the Motley Fool bottom line, and also a good deal for members who want to take advantage.

Let me know in the comments if this feature is something that would be of interest to you.

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Motley Fool Performance – February 2014

Motley Fool Performance – February 2014 3.73/5 (74.55%) 11 votes

Here are the latest performance stats for all the Motley Fool services, since their inception. Not all of these are available on their public site.

The calculations follow the official methodology used by each of the services.

Check the Performance category posts on the right to see if more recent stats exist.

If you find these helpful, please take a second to rate the content by clicking on the stars below. You can also leave a comment or sign up via email to follow my blog and receive regular updates. If I get enough feedback that my readers find this sort of information, I will provide updated performance stats on a regular basis. Also, please people, let me know what you want to see more of in the way of stats.

Performance Highlights

The market recovered in February, with the 10% drop that pundits have been predicting for about a year now, still yet to happen. The last time the S&P dropped 10% was a 19% drop in October 2011, and historically they occur once a year, so by that trend, we are overdue. But if you sit on the sidelines waiting for that drop, you miss out on all the gains in between.

After a year of publishing these performance posts, the month to month story tends to remain the same. The winning growth-oriented services keep winning, the “too clever by half” losing services tend to keep losing, and the conservative value-oriented services eek out solid consistent returns.

The biggest winners across the last 12 months have been the 2 Supernova portfolios as well as the Everlasting portfolio.They were outperforming the S&P by low single digits, and now outperforming by 28 points for Phoenix and the Everlasting portfolios, and 38 points for Odyssey. These are the youngest services at Motley Fool and shows the value of the long term, buy and hold approach.

MDP Deep Value and Special Ops are digging themselves deeper and deeper holes throughout a great bull run. I personally am putting Special Ops on a death watch list, and won’t be surprised to see the plug get pulled on this poor performer.

 

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MF Performance Stats - 2014-02Feb

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Motley Fool One Opening Up to New Members on March 20th, 2014 3.44/5 (68.89%) 9 votes

Motley Fool One is opening up their service again on March 20th in similar style to the previous few opens, complete with their over the top, infomercial style marketing, the facade that they are individually reviewing applications, the usual application questionnaire, and the members lobby with some content as well as an FAQ. 

Pricing details will be released on March 20th as well if history is any indication. 

There is one new feature that is being teased that has previously not been available in MF One. Their application questionnaire and FAQs indicate that they are likely to include the ability to automatically invest in recommendations made by their premium services without you as a member needing to do anything.

This auto investing feature seems interesting but a little ambitious in my opinion for a company that has never had the strongest technical infrastructure and whose financial planning features released last year left a lot to be desired.  But details are not yet available on the feature so it would be premature for me to comment. 

Once I learn more I will post details here.

Subscribe to my blog to get the latest updates on all Motley Fool services and follow me on Twitter (@MotleyFoolRview). 

And in the meantime, check out all my Motley Fool One content here, especially the one year review I just posted about my own experience thus far.

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