Here’s my personal story about using the Motley Fool Stock Advisor, which I find to be a useful tool to get started in the world of investing. If you have never invested before, it’s possible to get some good experience doing so using this advisor.
Investing Without Risk?
The MOST IMPORTANT thing to know about using the stock advisor is that it’s possible to side-step one of the biggest worries new investors have — getting experience in the stock market and making mistakes that can help you learn how to be a better investor WITHOUT INVESTING A DIME IN THE MARKETS UNTIL YOU ARE READY.
Yes, I know that’s in all caps and makes this article read a bit like a conspiracy website. But one of the worst aspects of being a new investor is being afraid to make a mistake with your money that costs you a chunk of your investment funds. Using the Motley Fool Stock Advisor in conjunction with a mock trading platform such as the stock market simulator offered by Investopedia, can teach you a lot about investing without the risks.
Here’s the rub about getting started with the Motley Fool Stock Advisor — this is a tool for those who are serious about learning how to invest. This tool is NOT FREE but if you want to learn, the investment is well worth the money. You are presented with real stocks with real value, and not made-up companies that don’t actually perform, have real prospectus information, etc. The stock advisor assumes you are serious about real-world trading, and that is exactly what you want.
So you’ll need to invest the equivalent of just under two dollars per day (it costs roughly the same as an Amazon Prime subscription and is good for a full year just like Amazon Prime) to access the stock advisor. Once you’ve made the commitment, you are given access to the Fool’s regularly updated stock picks, which look like this:
I wanted to duplicate the likely experience of a new investor, so I selected only a single stock to get started. I wanted to see how the stock advisor worked on a very basic level (a good idea for most new investors) and see how the stock would perform after adding it to my Investopedia stock market simulator (which works based on actual market trades and uses market information to help you learn) and watched my stock, Twilio, Inc. (TWLO on NYSE) perform. The day I selected Twilio, it was recommended to me, but in subsequent days, this stock was edged out by better performers. I am able to view the stock’s performance in the Stock Advisor, and also compare it to the Investopedia information.
Keeping It Simple Early On
I deliberately kept my early portfolio very simple so as not to get distracted by too much information — you can add as many or as few stocks to your simulator or actual trading platform based on Motley Fool recommendations. My second phase of this experiment involves adding more recommendations from the simulator. If I were adding new stocks today, Motley Fool would advise me to look into other tech stocks including AutoDesk and Pinterest, with Pinterest being identified by Motley Fool as a “Best Buy” stock at the time of this writing.
You can add the stock to your Investopedia simulator (or whichever platform you choose) and watch it perform compared to your other stocks and do research on the stock itself using resources in both Motley Fool and Investopedia to view critical information like the 52-week average of the stock, top and bottom prices within the 52-week highs and lows, you can review balance sheets and other important details. When you are ready to “pull the trigger” on the stock you add it to your portfolio.
To date, I am pleased with my simulator experience. Using Motley Fool is an efficient way to find real-world stocks to use and monitor. For those who are interested in long-term investing, this is a valuable learning resource, and while it does require an investment to use (the annual fee), the learning you get from the recommendations, plus the research info and suggestions of which stocks are currently hot in the market can give a real sense of how the investment world operates and what you are most comfortable doing in the earliest days of learning how to trade.
Editors note: While The Motley Fool has done well in independent research, you should do your due diligence. Always check the company’s financials. Also, consider looking for red flags in the form of insider sales or analyst downgrades. And, lastly do a market check – see if people are using the company’s products and are happy with it.