Motley Fool PRO is a real-money portfolio service that we launched in 2008 that teaches members how to make money in up, down, and flat markets.
The PRO SMA strategy is a hedged equity portfolio. Our goal is to achieve capital appreciation with limited correlation [of] other asset classes and provide a smoother ride along the way.
The difference between Motley Fool PRO, the newsletter, and PRO as we manage it in Separately Managed Accounts is PRO that is a very sophisticated strategy. Hedges. Uses options. It's very difficult to implement well. And while as a newsletter subscriber, the information that you're reading is excellent, how well are you implementing that strategy yourself?
We've got portfolio managers with professional asset management just taking care of each of those option positions — those shorts for you — managing your net equity position and really making sure that the risk profile of that portfolio is managed on a day-to-day basis.
The philosophy that governs Motley Fool PRO and the PRO SMA strategy are very similar. The major difference comes [in that] in most circumstances, the PRO SMA strategy is going to have more direct shorts and more pure hedges. Now, this is because many investors don't have the temperament necessary to go with the ebbs and flows of betting against specific companies or against specific markets, and it can be very beneficial to have someone else in charge worrying about applying the strategy consistently over the long term.
PRO is right for clients with large portfolios who are interested in smoothing out the bumps in the road while still having equity and stock exposure.
One of the most difficult things about investing is controlling your temperament, especially when the market gets rocky and especially when you're using shorts and options and hedges. So if you can hand your money over to a professional to have your money managed by a Foolish Wealth Management advisor, I think that's a great thing.