Motley Fool Everlasting Portfolio Review
Motley Fool Everlasting Portfolio is a premium stock advisory service run by Tom Gardner. The service offers an inside look at Tom Gardner’s real investment account where members can see his exact holdings, portfolio allocations, and returns. Does it justify the steep price tag? Read our review to find out.
About the Motley Fool
The Motley Fool is one of the biggest financial media companies, specializing in financial news and investment advisory services. The company was started in 1993 by Tom and David Gardner, two brothers who shared their investing ideas on a simple website.
The company has since grown into a financial media powerhouse with over 300 employees, over a dozen investment advisory services, and millions of monthly readers.
We have reviewed a few of the company’s most popular premium services. We started with our Motley Fool Stock Advisor review and eventually started reviewing services like Rule Breakers, Motley Fool Options, and Rule Your Retirement.
Today, we are going to look at the Motley Fool Everlasting Portfolio, one of the company’s high-end investment advisory services.
Is the service worth paying for? Keep reading our Motley Fool Everlasting Portfolio review to find out.
What is Motley Fool Everlasting Portfolio?
Motley Fool Everlasting Portfolio is one of the Fool’s most premium (and expensive) services. it is one of the most interesting Motley Fool services we’ve reviewed to date. Read this review thoroughly because there is a lot to digest.
Everlasting Portfolio is the ultimate portfolio-building service. The service offers an inside look at Tom Gardner’s personal stock portfolio.
Have you ever wondered what it would be like to see the exact stock portfolio of a great investor? That’s exactly what you get with Motley Fool Everlasting Portfolio. You get a real-time look at Tom Gardner’s account. You can see every single stock he holds, how he allocates his capital, his returns, and more.
There are a few other perks to the service (which we will get to) but the main perk is being able to see the exact portfolio Tom Gardner has been using to make millions of dollars in the stock market.
Who is Tom Gardner?
If you are going to pay to see someone’s stock market portfolio, you want to make sure they are reputable. After all, I wouldn’t pay a dime to see my neighbor’s portfolio (no offense) because I have no idea whether or not he’s credible.
So, is Tom Gardner credible? Absolutely.
Tom Gardner is a well-respected investor who has made a living off his investing prowess and transparency. Tom, alongside his brother David Gardner, have been the masterminds behind the Motley Fool brand for almost three decades.
Tom’s stock picks have been outperforming the S&P 500 by a considerable margin. We’ll take a closer look at specific performance data later in the review.
What Do Motley Fool Everlasting Portfolio Members Get?
Now that you know a bit about the service, it’s time to look at what really matters. What do you get as an Everlasting Portfolio member?
As mentioned above, the star of the service is the live portfolio. That said, the service has a few main offerings.
- Investment Education
- Portfolio Alerts and Updates
- Live Portfolio Access
We’ll start by looking at the auxiliary benefits before doing a deep dive into the portfolio.
Everlasting Portfolio is not a standalone investment education service, but it comes with four main resources.
- Getting Started With Everlasting Portfolio
- Principles of Winning
- Selling Strategy
Each resource comes in the form of an in-depth guide designed to help members make the most of the service. While these lessons can be applied to any investment strategy, they are specifically designed to be applied to the Everlasting Portfolio (after all, you’re paying for it).
The resources are relatively basic but its important for investors to understand the methodology behind the portfolio if they want to replicate Tom’s success.
Portfolio Alerts and Updates
Tom Gardner’s portfolio is regularly updated. Members will get an alert every time Tom makes an update to his portfolio.
These alerts usually come in the form of buy and sell recommendations (similar to the Stock Advisor service).
Updates usually come every month or every other month. Unlike other Motley Fool services, the alerts aren’t set on a fixed frequency (i.e. two alerts per month). Alerts are issued when changes are made to the portfolio.
For example, Tom issued 4 buy alerts in July of 2020 and 3 sell alerts. He hasn’t issued any updates since (as of October 2020). This speaks to the nature of the service. It’s less about constantly buying hot stocks and more about maintaining a strong portfolio of stocks.
This leads to the main part of our Everlasting Portfolio review.
The Everlasting Portfolio
If you are paying for access to Motley Fool Everlasting Portfolio, you are paying for access to Tom Gardner’s personal portfolio. You can get investment education from a variety of sources and you can get hot stock picks from cheaper services like Stock Advisor and Rule Breakers.
The Everlasting Portfolio gives you an inside look at how these stock picks can comprise a real portfolio. As a member of the Motley Fool Stock Advisor and Everlasting Portfolio, I will let you know that it makes a major difference. Being able to see a real portfolio adds a new dimension to the investment advice.
The portfolio is set up as a sortable table that includes the following columns:
- Company and Ticker
- % of Portfolio (i.e. allocation)
- Market Value
- Cost Basis (i.e. average entry price)
- Current Price
It’s really that simple. The table looks similar to what you’d see if you logged into your brokerage account and pulled up your own portfolio.
So, how does this portfolio perform?
We cannot share any specific holdings of the portfolio out of fairness to both The Motley Fool and its paying subscribers. That said, we pulled all of the data into Excel and put together a list of some key statistics.
- Everlasting Portfolio: 454.7%
- S&P 500: 204.8%
Tom Gardner’s portfolio more than doubled the returns of the S&P 500
- Everlasting Portfolio Since Inception: 23.2% Annualized
- vs. S&P 500: 15%
- EP Past 5 Years: 23.9% annualized
- vs. S&P 500: 14.4%
- EP 2020: 66.1%
- vs. S&P 500: 9.7%
- 63 Total Stocks
- Stock prices range from ~$15-$500 (the average share price is $102.44)
- 45 Winners Comprise 95.3% of the Portfolio (i.e. positive return)
- 18 Losers Comprise 4.7% of the Portfolio (i.e. negative return)
71% of the stocks in the portfolio have positive returns. While 29% of stocks have negative returns, these stocks only account for 4.7% of the portfolio’s value. Tom allocates more capital to winners and keeps losing positions small.
- The average return of a winner is 208.3%
- The average return of a loser is -43.89%
- The biggest winner returned 898.9% and accounts for 19.3% of the portfolio
- The biggest loser returned -87.7% and accounts for <1% of the portfolio
Once again, Tom makes a habit of doubling down on winning positions and minimizing losing positions. The biggest winner also happens to have the highest allocation in the portfolio.
- The average allocation per stock (i.e. % of the portfolio) is 1.55%
- The highest allocation is 19.3%
- The lowest allocation is 0.0% (i.e. such a small position that it is insignificant)
The allocation levels correlate with the returns, with the heaviest weighted stocks providing the highest returns. It appears that Tom likes to match his position sizes to his conviction in an investment.
The portfolio is heavily weighted in tech, with the majority of the portfolio allocated to tech companies in a variety of different industries. There are a few picks from other industries like food, health, finance, and apparel.
Portfolio Dollar Value
- $11.7 million in stocks (95.4%)
- $546,000 in cash (4.6%)
- 3 Stocks with Market Values over $1 million
This is not a small, experimental portfolio. It’s Tom’s real account and it’s very interesting to see how much he actually invests in a stock. It’s one thing to get a Stock Advisor alert that says “Buy XYZ.” It’s another to see just how much money Tom has invested in the pick.
Is Everlasting Portfolio Right for Your Investing Style?
We just went over the key statistics for the portfolio you will have access to as an EP member. If you are trying to figure out if the portfolio aligns with your own investing strategy, there are a few things to consider.
First off, the portfolio performs exceptionally well. It has more than doubled the performance of the broader market. If you are just looking for stocks that will yield exceptional returns, this portfolio is a good fit.
If you have a specific investing style, there are a few other considerations.
Everlasting Portfolio (EP) is a growth stock portfolio. If you are looking for stocks that will outperform the market, this is a good fit. If you are looking for income (i.e. dividend stocks), this is not the portfolio for you.
EP is heavily weighted in tech stocks. Tech stocks have done exceptionally well over the past decade and the portfolio has benefitted accordingly. If for some reason you have no interest in tech stocks this portfolio may not be a good fit.
EP investment methodology is rooted in diversification. It is recommended that investors own at least 30 stocks in the portfolio. A single holding should never comprise more than 20% of your net worth.
EP is a long-term portfolio. It is recommended that investors hold most of these stocks for at least five years (unless a sell alert is issued).
EP is susceptible to market volatility. You can’t beat the market without being exposed to volatility. You should be able to stomach 10-15% price drops at any given time.
The service also issues the following guidance to members:
- Don’t buy fewer than 10 stocks
- Don’t aim for short-term gains
- Don’t invest all of your savings in stocks
- Don’t borrow money to buy stocks
- Don’t buy stocks simply because they have a low share price (i.e. under $5)
- Don’t expect all of your stocks to go up
Motley Fool Everlasting Portfolio Pricing
By this point in the review, you should have a strong understanding of what you get when you sign up for Everlasting Portfolio. Now we come to the most important question – how much does it cost?
Everlasting Portfolio is available for $1,599 per year. This subscription will renew automatically every year.
Unlike other Motley Fool services, there is no monthly subscription option. This is reasonable when you consider the service’s core offering – the portfolio. When you sign up, you get instant access to Tom’s personal portfolio. If you could simply pay for a month and cancel, many people would simply replicate the portfolio and bail.
While the $1,599 price tag is steep, it comes with a 30-day guarantee. That said, this isn’t a straight money-back guarantee. It’s a transferrable credit. If you are unhappy with Everlasting Portfolio, you can reach out to the customer service team and get a credit towards another Motley Fool service.
Is Everlasting Portfolio Worth the Price?
At $1,599/year, Everlasting Portfolio is one of the Fool’s most expensive services. In contrast, both Stock Advisor and Rule Breakers are available for $99/year.
So, how does Everlasting Portfolio justify the steep price, and is it worth it?
There are a few points to hit here.
First, the offering is much different than the Fool’s other services. You are paying to get access to Tom’s multi-million dollar personal investment account. By analyzing Tom’s portfolio, you can attempt to build your own portfolio similarly (and hopefully achieve similar returns).
As for whether or not the price is worth it, it really comes down to the size of your portfolio. I recommend comparing the membership fee to the size of your portfolio to determine how much you need to make back for it to be worth it and how feasible that type of performance is.
For example, if you have $5,000 to invest, it doesn’t really make sense to spend $1,599 on an advisory service. The membership fee alone represents 32% of your available capital. You would have to make an extra 32% return just to breakeven and while there have been years when the portfolio achieved such results, they are not the norm. The Stock Advisor subscription would probably be a better option for you.
That said, if you have $100,000 to invest, the $1,599 membership fee only represents 1.6% of your portfolio and it would be reasonable to assume the service could make you at least an extra 1.6% in stock market returns (likely more).
You should also consider your current portfolio. If you are just getting started with investing in stocks, EP can be an excellent tool for building a portfolio of strong stocks. The service can also be used to expand and diversify an existing portfolio.
If you have enough investment capital to justify the purchase, Everlasting Portfolio is a good service to build a strong portfolio. You could probably get away with paying for a single year (vs. renewing yearly). During that time, you could build a strong portfolio and then transition to the Stock Advisor program for monthly stock picks to tune up your portfolio.
Everlasting Portfolio Review: Final Thoughts
Motley Fool has always been known for its transparency. When we first reviewed the Stock Advisor program, we were impressed that the company provided a track record of every stock pick ever made in the program.
Everlasting Portfolio takes this transparency to the next level by providing a real-time look at Tom Gardner’s investment account. There are very few services that offer this type of feature and it’s definitely the star of the EP service.
If you are looking to build a strong, diversified portfolio with a reasonable amount of capital, Everlasting Portfolio could be a good fit for you.