If you've spent any time in Fooldom lately, you're probably aware that The Motley Fool offers a suite of investing newsletters. But you may be wondering -- quite reasonably -- whether they're any good and which ones would serve you best. Well, let me assure you that they're all pretty impressive.
After I wrote an article a while ago about investing and plumbing (of all things!), I heard from a reader who asked me how to go about choosing one or more of our newsletters. As I replied to him, it occurred to me that many others might have the same questions. So I've expanded my answer here. And as you read, keep in mind that you can try these newsletters for free. There's a good chance you'll benefit greatly from them.
The rundown
First, here's a quick look at each newsletter service.
Rule Your Retirement : This newsletter, headed by longtime Fool personal-finance expert Robert Brokamp, covers a subject that is critical to most of us. You may be investing in some terrific stocks and funds, but if you're not investing enough, or if you're investing inefficiently, you're leaving some money on the table at best and setting yourself up for a bumpy retirement at worst. Robert and his guest experts offer specific stock and fund recommendations, along with guidance on Social Security, pensions, asset allocation, diversification, and other critical topics. There are also inspirational interviews with folks who have retired early -- and well -- and who explain how they did it.
Motley Fool Hidden Gems : This newsletter focuses on smaller companies. They can be riskier than their larger counterparts, but their size also means they have more room to grow. A recent look at the Hidden Gems scorecard showed that the total average returns for Tom Gardner and his guest analysts were at 30% and 36%, respectively, compared with 10% for the S&P 500. The newsletter features a watch list of intriguing companies, as well as a section on "Tiny Gems" that hold a lot of promise. Tom and co-advisor Bill Mann also include many investing lessons in their writings for the newsletter. Of the first 74 picks, 10 have more than doubled in value, and 31 have gained more than 20%. For example, student loan company First Marblehead is up about 50% in fewer than six months.
GreenLight : This is our newest offering. It aims to help you perfect your personal finances and covers everything from tax tips to the best brokers to computer advice to short-term investments. Learn how to avoid scams, optimize your credit score, and find great deals. It also offers investment advice, of course.
Inside Value : Value investing emphasizes paying a good price for investments, so you may find a greater margin of safety in these recommended stocks. Lead analyst Philip Durell fills each issue with close examinations of undervalued and attractive companies and details his thinking about their business, risks, competition, and valuation. His total average return is 9%, compared with 5% for the S&P 500 over the same period. Some of his recommendations are currently underwater, which means they're simply even more attractive investments now at current lower prices. Dell (NASDAQ:DELL), already a Stock Advisor pick, was recommended in the pages of Inside Value back in March, and its price has grown more compelling in recent months. Philip regularly lists his most-attractive-right-now stocks for his readers.
Income Investor : This newsletter is especially worth checking out for beginning investors, though we can all profit handsomely from it. It offers a more conservative approach to investing, because you earn dividends or other income from your investments while also benefiting from the accompanying stocks' growth potential. The total average return of the newsletter's picks is 14%, versus 10% for the S&P 500. Of lead analyst Mathew Emmert's first 70 picks, last time I checked, 21 were up by 25% or more, and 15 has risen by 35% or more. You'll find some familiar names on the list, such as Johnson & Johnson (NYSE:JNJ), and some less familiar ones, such as France Telecom. More than 20 companies on the list sport dividend yields above 5%, and 13 have yields topping 7%. These are some potentially powerful investments!
Champion Funds : If you have an interest in mutual funds -- and they make a heck of a lot of sense for most of us, especially those who'd rather not spend hours studying and selecting individual stocks -- this newsletter is well worth considering. It's true that most actively managed mutual funds don't do as well as index funds, but some do much better -- and lead analyst Shannon Zimmerman works hard to find top-tier, low-cost funds. This newsletter's total average return is 18%, versus 8% for benchmark indexes. Shannon will introduce you to many great investing minds -- ones who can invest your money for you through their funds. He even maintains three model portfolios that list appropriate funds for conservative, moderate, and aggressive investors. More than half of his 40 picks are up more than 15%, and 16 have climbed by more than 20%, which is darn impressive for mutual funds. One fund, picked only in November, is already up more than 16% and is invested in stocks such as UnitedHealth (NYSE:UNH), itself a Stock Advisor pick, and Cendant (NYSE:CD), which is an Inside Value recommendation.
Stock Advisor : Launched in April 2002, our oldest newsletter offers a nice mix of approaches, with Fool co-founders David and Tom Gardner both recommending stocks in it. David tends to favor more aggressive investments, while Tom looks for more established good values. While each Gardner has picked some stocks that are down, the overall average return for each brother handily beat the S&P 500's 18% in the same period. You want specifics? David's average return was 48%, and Tom's, 70%! David has recommended Netflix (NASDAQ:NFLX) and Disney (NYSE:DIS) in the past and has more than doubled his money on them. He has recently re-recommended one of them. Some 20 of the brothers' picks have more than doubled in value, while eight have more than tripled, and three have more than quadrupled.
Rule Breakers : Headed by Fool co-founder David Gardner, Rule Breakers is designed for more experienced investors. This is aggressive investing and should be only a part of a diverse portfolio. That said, when Rule Breaker investing pays off, it does so in a big way, rewarding investors very handsomely. The Knot (NASDAQ:KNOT), for example, is up nearly 80% in just a few months. There are several picks in the red, but as with other such occurrences, they often represent even more tantalizing buying opportunities, at lower prices. Rule Breaker investing requires patience, and it does come with risk. Huge swings are the norm. The newsletter pays special attention to cutting-edge fields such as biotech and nanotechnology, and it has a regular feature devoted to early adopters. Overall, its recommendations were recently beating the S&P 500 handily, with total average returns of 14% versus the S&P's 5%.
Other extras
You get more than monthly stock and fund picks with these newsletters. You also get access to an online nook for each one, each featuring a scorecard for picks, articles, interviews by and with our analysts, dedicated discussion boards where you can interact with our analysts and other readers, and special reports and updates. You'll also be able to access all past issues, which offer details on each recommendation.
What's more, you can access various special reports just by trying out a newsletter for free. The reports include "6 Picks for Ultimate Growth," "Companies on the Road to Ruin" (15 companies to avoid), "5 Value Investing Secrets," "Dividend Time Bombs" (seven prominent companies with hefty dividends that are headed for disaster), "Supercharge Your Retirement" (eight specific, practical steps to preserve and enhance your retirement income), and "Slam-Dunk Mutual Funds: Building the Perfect Portfolio."
Why we charge, and what we don't charge for
If you're bummed to find out that you do have to pay for some of this great information, here are some things to consider:
- We're a business. We have to charge for something if we want to keep the lights on! (Few people bought our Motley Fool Shoehorns, so we're putting out newsletters instead.) That said, we take our responsibility seriously, working hard to offer you superior investment ideas that are well worth what you pay for them. Spend the modest price for a newsletter subscription, and we'll work mightily to help you make several thousands of dollars -- if not much more -- in return. So yes, the newsletters do cost money if you choose to stick around after your initial free trial, but we think you'll find it's well worth it. We aim for the newsletters to pay for themselves in short order.
- We don't charge you for everything. Our website is full of free guidance and education and even some investing ideas. (Make this page a favorite and check it regularly for our news and investment stories.) You can learn some basics in our 13 Steps to Investing Foolishly and in our Fool's School area. You may also find this page useful, though it has a lot of resources on it. I created it for teens, but it should serve post-teens just as well.
Just try one
Whether you're now sold or are merely curious, you owe it to yourself to give at least one of our newsletters a whirl. Take advantage of some free trials. We make it painless, and you'll be able to see many of our stock and fund recommendations and how well they've done. I wouldn't recommend subscribing to all of them -- that would be information overload. Instead, take some time to get more comfortable with investing and decide which approaches make sense to you.
Here are some additional related articles of interest -- they're some of the many, many articles on our website, all available for free:
- The Secret of Superior Stocks
- Low-Budget Investing
- Dividends for Your Dreams
- Time to Invest
- The Real Retirement Secret
This article was originally published on Feb. 18, 2005. It has been revised and updated.
Selena Maranjian's favorite discussion boards include Book Club, Eclectic Library, Television Banter, and Card & Board Games. She owns shares of Dell, Netflix, and Johnson & Johnson. For more about Selena, view her bio and her profile. You might also be interested in these books she has written or co-written: The Motley Fool Money Guide and The Motley Fool Investment Guide for Teens . The Motley Fool is Fools writing for Fools.
