A Foolish Guide to Using Multiple Services

Our mission is to help you build your best capital-F Foolish portfolio. We offer plenty of services to assist you, but your success starts with three simple ingredients:

  1. Understanding your personal circumstances and goals
  2. Embracing the right investing principles
  3. Building a customised and diversified game plan

The first factor is something only you know. And, as a company that only provides general (and not personal) advice, we need to leave it to you. Are you looking to crush the market? Seeking income? Maybe even a mix of both? Are you investing to retire in 20 years, or are you looking to enjoy the retirement you're already in? There are no perfect answers … only answers that are right (or wrong) for you.

The beauty of Foolish investing is its simplicity:

  • Buy pieces of businesses (not just ticker codes on a screen) with the aim of holding them for the long term.
  • Own shares in at least 25 companies across a range of industries, geographies and even currencies.
  • Don't spread yourself too thin. If you own 150 stocks, especially if they're all tiny positions, then even a massive winner isn't going to move the needle very much.
  • Add to your winners, but know your limits. Is a 10% position too high? 15%? For most investors, it shouldn't go higher than that.
  • Remember that a minority of your stocks will probably drive the majority of your gains; so…
  • Aim to make money most of the time, but understand that not every investment works out and not every day, month, or even year is profitable.

Once you understand your goals and embrace capital-F Foolish investing principles — which, if you're reading this, you've hopefully already begun — you're ready to build your customised game plan.

I have one or two Motley Fool services already… Why would I join another?

If you're already a member of Share Advisor or, Dividend Investor, thank you! We appreciate your business, and more importantly, we appreciate your trust. We'll continue to do our best to serve you.

In our experience, though, some members want more. Perhaps they want guidance on how to turn our recommendations into a weighted, coherent portfolio. Other times, they want to follow a particular investment strategy. Or, they're just in a different stage of life, and want to tailor their investing to their circumstances.

That's why we have more than one type of investment service. Rather than bundling it all up and selling it for a single, high (but great value!) price, we offer different services so that you can choose which ones are right for you.

Our entry-level services offer one recommendation every month, plus a regular 'Best Buys Now' feature. Share Advisor, our flagship service, aims to bring you the best mid- and large-cap growth companies (and the occasional value play) we can find. Dividend Investor is for investors looking to add quality dividend-paying companies to their portfolios. And ETF Investor does what it says on the tin: helping our members choose the best ETFs on the market.

On top of that, we have services that aim to provide ongoing portfolio advice — when to buy, how much to buy, when to trim, and when to sell out altogether. And they cover the waterfront: the Odyssey portfolio is looking to find the highest quality companies on the ASX, with the aim to hold (and add to) them over years. Shooting Stars is chock-full of US recommendations. And Everlasting Income aims to provide regular, never-ending income from a portfolio of quality, dividend-paying companies.

These are just some of our products. So, depending on what you're looking for, we almost certainly have the services you can mix and match to suit your investing circumstances, goals and risk tolerance, in a way that's right for you.

How to Choose Your Own Path

There are multiple ways to mix and match The Motley Fool's services but only you can determine what is the best combination and strategy to meet your investing goals. As you consider each of our products we have principles that may assist in your decision making.

Please note that we provide general advice, which means we can give share recommendations and other advice to our members as a whole, but with the explicit understanding that they should decide if the advice is right for their personal circumstances.

Our recommendations may not be enough to put together a rounded investment portfolio, particularly if you're risk averse, or want a spread of investments

While we believe that listed companies (i.e. shares) should be central to one's portfolio, you might want to have exposure to other types of assets (maybe term deposits or government bonds), plus an emergency fund, ideally in a high-interest online savings account. Our general rule of thumb is that people should not be investing money in the stock market that they anticipate needing within the next three years.

We also don't think money invested in higher-risk growth stocks should represent more than 30% of an investor's portfolio.

In general, we advise members of our high-growth services  to invest up to  30% of their portfolio in that service.For those in or near retirement, a lower percentage is probably appropriate.

How to Approach Multi-service Recommendations

One key question from a lot of members is how much of a company's shares to buy if it's recommended across multiple services.

First of all, when you see a recommendation of a company you already own, that's usually good news, not bad! Many of The Motley Fool's best performing recommendations have been selected in multiple services, and great support tends to showcase higher conviction.

Second, even though we can't provide personalised financial advice, our general recommendation is to buy more. Here's how:

First, work out what % of your portfolio you're devoting to each of our services. It might be 40% Share Advisor, 40% Odyssey and 20% Everlasting Income, for example.

Then, invest that percentage according to each service's recommendation.

(The primary caveat is to not buy more if you already own an outsized position — determined by you — but that should be a rare occurrence.)

Here's a hypothetical example: Let's say a member is investing $100,000 across the services in our example above, and has decided to invest 40%, 40% and 20% accordingly.

Their Odyssey portfolio would be $40,000 (40% of $100,000)

If Odyssey recommends putting 7.5% of your Odyssey portfolio into Jester's Japes (ASX: HAHA), then the member would invest $3,000 (7.5% of $40,000) in that company's shares.

If the company was then recommended in Everlasting Income with a 5% allocation, the member would then invest $1,000 (5% of 20% of their $100,000) to buy more of the company's shares.

Note that even though they're buying more shares of Jester's Japes, they still only have $4,000 worth of shares (4% of their $100,000 portfolio), so buying more doesn't (necessarily) lead to an over-allocation to a single company.

Of course, each member can do whatever they want, based on their preferences and circumstances, but that's how we'd suggest going about following our advice.

Foolish Bottom Line

There are many ways to build a Foolish portfolio, and hopefully we've been able to show you how you could use our different services to do it for yourself.