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Motley Fool vs. Morningstar

Daily stock tips

Offers free market content

Claims to consistently outperform the S&P

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Trusted mutual fund ratings

Provides a 2-week free trial

Highly-rated “Portfolio X-Ray”

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Many investors become eager to expand their knowledge of the market, always looking for the cutting edge in research or stock tips. This is where both Motley Fool and Morningstar can be helpful. Both companies are reputable firms offering quality market research in addition to other services.

While the general goal and philosophy of each firm are similar, they are generally more focused on different types of investment. While the Motley Fool is more concerned with picking stocks that show promise to outperform the market, Morningstar focuses most of its research on mutual funds as well as ETFs. There is still quite a bit of overlap between the two companies, and this article can help you make the most informed decision in the question of Motley Fool vs. Morningstar.

The Motley Fool Overview

Don’t be tricked by The Motley Fool’s light-hearted approach to discussing the market. This company has been offering stock tips since 1998 and has established its reputation for solid market research well into the internet age. Curious investors can begin by looking through the multitude of free content that The Motley Fool offers to decide whether or not its premium services are worth the annual fee.

 For 199 dollars per year (99 dollars for first-year subscribers) individuals can access The Motley Fool’s premium plan. This will provide a given customer with access to The Motley Fool’s proprietary stock research and analysis in addition to the droves of free content found on its website.

The Motley Fool’s Philosophy

While The Motley Fool’s amusing language and focus on finding the next stock to outperform the market, this should not be confused with risky a risky day-trading venture. The Motley Fool stands by its philosophy of making sound, long-term-based investments that will yield growth over time.

While some investors report the daily newsletters as being too invasive, others claim that they enjoy always being kept abreast of market trends. This constant communication might make The Motley Fool might be a better choice for an individual who likes to peruse through financial reports on a daily or semi-daily basis as opposed to someone who would rather invest his or her money and forget about stock projections.

The Motley Fool has been around long enough to be deemed a trustworthy entity. The platform currently claims to have outperformed the S&P in returns on investment by over 600% compared to the S&P’s 143% as of December 16, 2021.

While this is dating back to data collected from the launch of The Motley Fool’s stock advisor service in February of 2002, it should be considered evidence that the company has a strong history as a trusted stock advisor.

Motley Fool Pros

Very affordable

Track record of success

In-depth reporting & analysis

Motley Fool Cons

Product up-sells can be a bit much

Not all stock picks are successful

Morningstar Overview

While The Motley Fool generally focuses its advice on stock picks, Morningstar targets its research more on general market trends, emphasizing  mutual funds and ETFs. With a very similar price point to The Motley Fool but a more diverse set of payment plans, Morningstar can be a useful financial research service if it aligns with your investment goals.

Morningstar Cost

Morningstar is priced almost identically compared to The Motley Fool, charging 199 dollars for an annual subscription, but customers can save money by signing on for a longer period. Morningstar also offers a two-week free trial to access its premium services, but this does require providing the company with a debit or credit card.

Morningstar Ratings

Morningstar is mostly known for its mutual fund rating system, rating a fund on a scale of 1 through 5. The rating is entirely based on a proprietary mathematical formula with no subjective human analytics. This can be a pro if an investor prizes data from a security’s past performance, but it can also be a negative for those who like to receive more speculative advice about a fund’s future.

Portfolio X-Ray

Many Morningstar Premium users report its “Portfolio X-Ray” feature to be incredibly useful. This service provides subscribers with an overall snapshot of his or her portfolio. This report will include the strengths and weaknesses of each portfolio, considering asset allocation, investment ratios, and how each asset is trending. The X-Ray is hailed as a great way to get a bird’s eye view of a portfolio and get general as to what might need adjustments and what aspects should remain untouched.

Morningstar Pros

Top-notch investment research

High-quality stock picks

User interface makes it easy to navigate

Morningstar Cons

Screeners don’t always project future performance

Can be expensive

The Motley Fool vs. Morningstar

While both services meet at a very similar price point, and both offer market tips, the decision between The Motley Fool vs. Morningstar will ultimately come down to an investor’s focus. The Motley Fool focuses on stocks, constantly churning out daily reports on the next up-and-coming security.

Despite this forward-looking attitude, The Motley Fool still stresses dependable, long-term investments.

Morningstar is similar in philosophy, but more of its research (as well as its respected rating system) revolves around mutual funds backed by historical mathematical analyses.

Some might see this purely mathematical approach as a benefit while others will want more human input about an asset’s future performance. This is a decision ultimately left up to the potential customer and his or her investment preferences.

Whether you prefer The Motley Fool vs. Morningstar, both are high-quality services for the right investor.

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