How Does Stock Advisor Work? – Tips on How to Use Stock Advisor
Motley Fool's Stock Advisor is a subscription-based service that provides investors with stock recommendations and investing education. Their team of experts scours the market for companies that they believe have high upside potential.
Before getting started with the service, it is helpful to understand how it works in order to have the most success building a Motley Fool style portfolio.
The Motley Fool's investing philosophy is focused on buying and holding quality stocks for the long term, so it's important to have the right expectations regarding returns and their investing time horizon. They do not make recommendations for day trading or trying to pick-up quick profits; instead, they focus on stocks with big upside potential over the long-term.
They believe that, by doing this, the stock market's value will rise over time, despite any short-term market fluctuations. For those looking to invest their money, The Motley Fool recommends building a portfolio that can weather any market downturns and investing only money that won't be needed for at least five years.
They recommend you should buy at least 25 stocks. It's best to diversify your portfolio by buying a variety of stocks from different companies, and holding onto them for at least five years. This gives the companies time to work on behalf of shareholders and hopefully increase in value.
How to Start Building a Stock Advisor Portoflio
The service is designed to help you build a complete portfolio from scratch. Here's how they recommend doing it.
You start by reviewing their recommendations of which they have 3 types; 1. New recommendations, 2. Best Buy recommendations and 3. Foundational recommendations.
They don't advise buying all 25 stocks at once, but instead to gradually build up to that first by buy some of their foundational picks.
The foundational picks are released just once per year and they are, as the name suggests meant to provide a strong foundation to a portfolio. They stocks tend to be very established stocks with far less volatility and good growth potential but not explosive growth potential as the new recommendations.
Then, every two weeks they will release a new buy recommendation with their research report and supporting video covering everything you need to know about the recommendation. If you share the same conviction in the provided investing thesis then you would buy the stock.
They don't necessarily advise buying everything, but instead buying what you understand and what you have conviction in.
Then, every other week they will release the "Best Buys" which are re-recommendations from past picks. This is a great way to keep up with past recommendations and see what the Motley Fool analysts currently think of the stock and the opportunity for investing right now.
So, over the course of your first year investing with Motley Fool Stock Advisor you may have a handful of foundational stocks, new recommendations and "best buys" as part of your portfolio. It's also likely that you will have bought other stocks that you have learned about through all of the additional premium content and coverage they provide.
Tips on How to Use Stock Advisor
By following these steps, they believe that anyone can build wealth over time.
1. Invest in a variety of stocks to diversify your portfolio and increase your chances of making money.
2. Hold onto those stocks for at least five years to give them time to grow.
3. Invest regularly, even if it's only a small amount each time. This will create a snowball effect that can make your portfolio grow quickly.
4. Don't panic when the stock market declines. These dip provide a good opportunity to buy more of your best stocks while they're on sale.
5. Keep investing in the stocks that are performing well. These companies tend to continue doing well over time.
6. Focus on long-term returns rather than what's happening in the stock market day-to-day. If you invest wisely, your portfolio can be worth a lot of money over the years.
In conclusion, the Motley Fool Stock Advisor is a great service that can help you build a strong portfolio of stocks. They have a wide variety of content to keep you informed about different stocks and investing concepts. If you follow their advice, you could see some great returns on your investment over time.
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