The Motley Fool vs. Morningstar comparison
Moneywise.com / Moneywise.com
Updated: December 01, 2022
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If you want to improve your portfolio or better understand your investments through research, there are many services to choose from. Two of the best-known names in investment research are The Motley Fool and Morningstar. Both services have a good reputation for providing quality investment research, but they focus on different types of investments for different investment goals. Here's our The Motley Fool vs. Morningstar comparison.
Motley Fool vs. Morningstar overview
The Motley Fool is primarily a stock picking service, where you can sign up for one or more newsletters explaining why a certain stock is set to grow over the next few years. Morningstar, on the other hand, is best known for mutual fund and exchange-traded fund (ETF) research. If you’re deciding on a premium investment research service, read on for a head-to-head comparison of The Motley Fool vs. Morningstar to find out which may be best for your investment needs.
About The Motley Fool
The Motley Fool is a stock picking service founded in 1993 by brothers David and Tom Gardner. The duo remains at The Motley Fool’s helm and shares their top stock picks on the main Motley Fool weekly newsletter. As you may infer from the name, the site takes a light and jesting attitude toward financial management and investing.
The Motley Fool features a long list of subscription offerings, but the flagship Stock Advisor is a common starting place. Through this newsletter, subscribers get recommended stock picks every Thursday, rotating between David and Tom’s new picks and “best buys now” lists.
In addition to its paid offerings, The Motley Fool offers a plethora of free content on its website, which can give you an idea of what you would get from the premium subscription. Since launching in 2002, the paid subscription has boasted a 575% return compared to 116% from the S&P 500, as of Jan. 29, 2021. That’s quite a track record and outperforms even many professionally managed investment funds.
Morningstar is a large investment research organization with over 5,000 employees covering over half a million investments. Founded in 1984 by Joe Mansueto, Morningstar’s popularMorningstar rating scale for mutual funds is featured prominently by many brokerages— a testament to the quality of Morningstar research.
In the decades since, Morningstar’s ratings have expanded to ETFs, stocks, credit ratings, and other data for individual investors and investment professionals. Morningstar Premium is the flagship service that gives you access to a huge set of investment tools, ratings, and reports for regular investors. That includes a Best Investments section covering funds, stocks, and bonds.
Morningstar takes a serious, formal approach to manage investments. Beyond its paid services, it also features a wide set of free and premium education resources beyond the data-heavy ratings and analysis. While Morningstar features ratings and top picks, its wider focus means you can’t easily track its performance against the overall markets.
How The Motley Fool and Morningstar Work
How The Motley Fool works
As mentioned above, The Motley Fool offers several subscriptions as well as free content. Here, we’re going to focus on The Motley Fool Stock Advisor subscription.
When you join Stock Advisor, you can choose between weekly emails or text messages (or both) to alert you when the new recommendations are published every Thursday. Stock Advisor weekly releases rotate between Tom and David Gardner, who share new recommendations and lists of the best stocks to buy. The newsletter often features repeat recommendations of stocks where Tom and David have strong convictions.
According to Motley Fool records, David has an 841% average return and Tom has a 309% average return. That’s much better than you would get with a low-cost S&P 500 investment, though past performance is no guarantee of future results.
I signed up for The Motley Fool Stock Advisor last year to try it out for a review. Overall, I’ve been impressed with the service and its well-reasoned picks and analysis. I even made a few adjustments to my portfolio based on The Fool’s advice.
I’m a bit turned off by the sales messaging and upsells, though I have been happy with the value I’ve received from my Stock Advisor membership — which I plan to renew and keep for my own personal use.Sign up to The Motley Fool
How Morningstar works
Morningstar’s free content is definitely worth looking into, but here we are focused on the standard Morningstar Premium membership. The two biggest standout features here are in-depth research on 600,000+ securities and a “Best Investments” with lists of stocks and funds broken down into a list of useful categories.
The Morningstar Premium Best Investments page has 15 lists of mutual funds, ETFs, and stocks featuring hundreds of securities. With Morningstar Premium, you'll have the resources to pick the best investments on your own. Morningstar doesn’t give you a narrow portfolio of stocks or funds. Instead, it offers tons of data and analysis, along with its own expert ratings, to make decisions for yourself.
I tried out a two-week trial membership of Morningstar Premium to get a look under the hood for this review. While I’ve known the brand for decades, I’m impressed with the clean, easy-to-navigate resources that cover more investments than I could ever have time to consider.Sign up for Morningstar
Unique features of The Motley Fool and Morningstar
Both The Motley Fool and Morningstar aim to help with your investments, but that’s where their similarities end. They take a different approach and offer different types of information, so one may appeal more to you — or you may be interested in both.
How are they the same?
- Morningstar Premium and The Motley Fool Stock Advisor are both premium investment services that come with roughly similar price points.
- Both send out newsletters and feature websites where you can log in to view the latest investment research and recommendations.
- In addition to the regular data you pay for, they include additional reports, bonuses, tools, portfolio trackers, and educational content to best utilize and understand their advice and recommendations.
How are they different?
These sites have more differences than they do commonalities. Each one appeals to a different type of investor and comes with different types of recommendations.
The Motley Fool:
- Takes a fun approach to the stock market.
- Its Stock Advisor focuses on a list of about 10-15 stocks at once.
- You get new stock recommendations weekly and the newsletter includes detailed information on each stock (though it never hurts to do a bit more reading and research before buying).
This brings us to the unique data from Morningstar.
- Morningstar’s wide coverage makes it a good place to check in before making any investment decision, whether you want to buy or sell.
- Morningstar is a serious service with a ton of data that could be useful for any investor, even if you are not actively looking to pick stocks for your portfolio.
Pricing and plans
The Motley Fool stock advisor pricing
The Motley Fool Stock Advisor costs $199 per year with a lower $99 price for the first year for new members. That’s lower than many competing stock picking services you may consider.
- The Rule Breakers: If you’re looking to upgrade to other products, the Rule Breakers service costs $299 per year, or $498 per year for a Stock Advisor bundle with Rule Breakers.
- The Discovery: Everlasting Stocks service from Tom Gardner charges $299 per year. Rule Your Retirement is $149 per year. There are a couple of options in the four-figure price range as well.
Morningstar premium pricing
For the standard Morningstar Premium membership, you can choose between a few pricing plans: $29.95 per month, $199 per year, $349 for two years or $449 for three years. You can try out the service for free with a two-week trial before committing to a paid membership, though you do need to enter a payment card for the trial.
For a one-year membership, that puts the two services at the same price point. But you can save with longer-term subscriptions to Morningstar Premium.
With both services, you shouldn’t need to use customer service frequently. Unless you have a billing or payment issue, the two products are essentially self-serve.
- Motley Fool customers can contact customer service by email from anytime or phone from 9 a.m. – 5 p.m. ET Monday through Friday. It also has a help center with answers to many general questions.
- Morningstar offers a help center plus phone and email contact options.
Who are they best for?
So, who should sign up when comparing The Motley Fool vs. Morningstar? Each is good for its own specific use case. You may want to sign up for both, depending on your investment goals and budget.
Motley Fool is best for those interested in stock picking with a fairly active portfolio. If you want to take a hands-on approach to single stocks, The Motley Fool is an excellent resource to consider. Its branding and style may not appeal to everyone, but its information and track record are solid.
Morningstar is best for those who want more general market information, particularly concentrated on mutual funds and ETFs. While stocks are well supported, the overall value from Morningstar comes from its wide range of stock and fund ratings, as well as data that you can use to support your own investment thesis. They give top picks, but don’t go as far as saying to buy specific stocks, which you get from Motley Fool.
Alternatives to the Motley Fool and Morningstar
Zacks is a stock and investment research company that offers reports and screeners for a wide range of investments. If you already have a brokerage account with a major broker, Zacks reports may be included. Premium memberships give you more reports and tools for $249 per year after a 30-day free trial.
Stock fans may be familiar with the free blog content fromSeeking Alpha. It also offers a premium service that includes investment ideas and data. You’ll pay $239 for an annual membership or $29.99 for a monthly subscription.
Further Reading: Seeking Alpha and the Motley Fool comparison
Investor’s Business Daily (IBD)
Investor’s Business Daily is a news-style service that includes stock lists and research. You can start with a two-month membership for $20, followed by a $34.95 monthly fee.
Jim Cramer is a part of The Street, another premium stock trading service. If you like Cramer’s show on CNBC, you may also enjoy The Street’s free and premium content. The popular Action Alerts PLUS membership costs $29.99 per month, $299.99 per year, or $499.99 for two years.
Bottom line: Which is the best?
If you want to know which is better, The Motley Fool or Morningstar, it comes down to your goals.
- If you want an exciting stock picking service that helps you build a portfolio of 10 or more stocks, The Motley Fool has you covered.
- Morningstar is the right choice for those who want a broader and more measured approach to picking their own investments.
You may want one or both to improve your investments for the long-term. Thanks to lower-cost introductory offers and trials, you can give either a try without spending an arm and a leg to find out if it’s right for you.
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