Happy April Fool's Day.
As many of you realised, The Motley Fool Australia will not be starting an investment bank, and JetFlyHigh (ASX: IFLY) is a totally fictitious IPO.
What IS for real in the financial services industry are…
- High fees.
- Conflicted, biased advice
- Investing under-performance.
The contrast with The Motley Fool's business couldn't be more stark.
This Motley Fool Take Stock email is free. We hope it gives you some sound investing advice, the odd stock recommendation, and helps you calmly navigate the daily, weekly, monthly and yearly ups and downs of the share market.
We offer four subscription-only newsletters, including the very popular Motley Fool Dividend Investor and Motley Fool Share Advisor services.
The scorecards for ALL FOUR of our newsletter services are ahead of the market, by a substantial margin.
Such out-performance doesn't come by fluke. Our Analysts and Advisors are passionate and skilled investors. They are smart. Wickedly smart.
Critically, they have no investment banking background. They haven't worked at a brokerage firm. Before joining The Motley Fool, they were typically working outside the financial services industry.
I was a Finance Manager, working at the BBC in London, before joining The Motley Fool back in 1997.
Motley Fool Share Advisor's Chief Investment Advisor Scott Phillips was a Commercial Manager in the fast-moving consumer goods industry, with stints at big names like Woolworths, Heinz, 20th Century Fox, Diageo and Blackmores.
Successful stock picking requires skill, absolutely. It requires skill to not only pick the big winners, but to avoid the losers.
It also requires nerves of steel — literally thousands of our subscribers are collectively risking hundreds of thousands of dollars on our share recommendations. In this business, you rarely hear from people in the good times, but my gosh, you definitely hear from them when things don't quite go to plan.
It happens. You make mistakes. It comes with the territory. In this business, you are doing well if you have a 60% strike rate… meaning four out of every ten stock picks are likely to be losers.
Happily, and not coincidentally, our strikes rates are running way better than 60%.
For Motley Fool Share Advisor, for example, out of 50 ASX picks made to date, only 11 are underwater. That's a accuracy rate of 78%. Quite extraordinary.
For Motley Fool Dividend Investor, it's still early days, but so far so good. Andrew Page is six for six, giving him a 100% accuracy rate. Amazing.
The Motley Fool Australia does not accept advertising. We're not owned by a bank or a wealth management company. We are solely dedicated to helping YOU invest better.
We make our money when you subscribe to our stock picking newsletters, and when you renew your subscription.
You make your money when you buy our stock recommendations, and they go up in price.
You'll only renew your subscription if you receive outstanding service and great stock picks. As a business, that alone should be great incentive for us to excel as Analysts and Advisors. That our renewal rates are amongst some of the best in the industry tells its own story.
We make our advice affordable. If you are investing $1 million or $1,000 into the stocks we recommend, the subscription cost to you is the same. It doesn't get any fairer, or transparent than that.
Compare our business model to that of others in the financial services industry.
Your broker gets paid the more you trade. No wonder they are constantly encouraging you to switch out of BHP Billiton and into Rio Tinto, into Woolworths and out of Wesfarmers, or into bonds and out of equities.
Your typical financial adviser gets paid a commission by product providers. No wonder then (s)he recommends you regularly switch life insurance providers. No wonder the Commonwealth Bank of Australia financial planners recommend you invest in Colonial First State managed funds, given CBA owns Colonial.
The Motley Fool is over 20 years old. We have operations in the US, UK, Canada, Singapore, Germany and of course here in Australia.
In Australia, Motley Fool Share Advisor opened its doors in November 2011. Its first recommendation, a small software company called Integrated Research Limited (ASX: IRI), is now up over 370% from our initial recommendation.
In the relatively short time we've been in Australia, we've established ourselves as one of the more recognisable brand names in our space. Scott Phillips is a regular fixture on Sky News Business, and appears weekly on Fridays with Ticky Fullerton on the ABC's The Business.
Hundreds of thousands of people read the free content on our website. Tens of thousands of people subscribe to our newsletters. In terms of numbers, in a few short years, we've left many of our much more established competitors in our wake.
The financial services industry would like to have you know investing is difficult.
They'll use fancy charts. They'll produce glossy reports. They'll merrily switch you in and out of different companies, products and funds. Their annual financial health check-up is nothing more than an opportunity to have you sign up for another year of sub-standard returns, charging you a small fortune for the privilege.
Finance, and investing, is not rocket science.
1) Keep a decent cash balance.
2) If you prefer a managed fund, use a Vanguard index tracking fund. Index tracking funds out-perform many managed funds, and Vanguard are known for their low costs. Our three children all have a Vanguard Index International Shares Fund, into which we make monthly contributions. [The Motley Fool Australia has no commercial, or any relationship, with Vanguard.]
3) If you prefer picking your own shares, either do it yourself, or give one of our Motley Fool newsletters a try. By far the majority of individual stocks I buy come from our Motley Fool newsletters. With accuracy levels of 78% and 100%, there's no point in me looking elsewhere.
4) If you prefer a combination of managed funds and DIY stock picking, see 2) and 3) above.
5) Ensure your share portfolio is diversified, in terms of sectors and individual stocks. Don't own nothing but oil stocks. Don't have 70% of your portfolio invested in Qantas Airways.
6) Invest for the long-term. Run your winners. Cut your losers. Don't panic when markets fall. Don't get greedy when markets are riding high. Reinvest your dividends. Regularly add new money to your portfolio, either by topping up your favourite companies, or opening new positions. Time is your greatest friend. Use it.
7) Sit back and let the power of compounding returns work for you. Retire wealthy. Live well. Stay healthy.
If you've read this far, congratulations.
It means YOU want to take control of your financial future. It means you want to invest better. It means you want to pay less for advice, and you want your investments to perform better.
The next step is up to you. You need to make the change. Seize the moment. Grasp the opportunity on this day, April 1st, the most Foolish day in the calendar.
As an added bonus for having read this far, I have a special April Fool's day offer for you.
A one year subscription to Motley Fool Share Advisor retails for $399.
Today only, I'm knocking $220 off that already low price, meaning you'll pay just $179 for a full 12 months subscription to our flagship investing newsletter. Put another way, it's 55% OFF our retail price.
Click here now, and join Scott Phillips and myself at Motley Fool Share Advisor, investing better, investing Foolishly.
Again, Happy April Fool's Day.
