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Which one is better for you, Motley Fool Stock Advisor or Motley Fool Rule Breakers?
In this detailed comparison review, I am going to share with you everything you need to know to help you make an informed decision.
Motley Fool Stock Advisor Vs Motley Fool Rule Breakers: Investment Performance
In terms of investment performance, which stock picking service is better, Motley Fool Stock Advisor or Motley Fool Rule Breakers?
First of all, as Motley Fool Stock Advisor was launched two years earlier than Motley Fool Rule Breakers, it would not be fair or accurate to compare their performance directly.
However, what we would do is use the S&P 500 as the benchmark, and see how Motley Fool Stock Advisor and Motley Fool Rule Breakers fare against the S&P 500 respectively.
First of all, let’s take a look at their track record as of 5th Sep 2023.
Below is the performance comparison between Motley Fool Stock Advisor and S&P 500 between 2002 and 5th September 2023.
As of 5th September 2023, average Motley Fool Stock Advisor recommendations have returned over 510% since inception while the S&P 500 has returned 132%.
In short, the Motley Fool Stock Advisor has outperformed the market 3 to 1.
You probably know that investing in the stock market index ETFs such as the S&P 500 is one of the safest investment strategies.
Over the long run, it would almost certainly go up.
However, the downside of investing in index ETFs is that you are buying almost every single stock that is included in the stock market index.
In other words, you are buying both the good ones and also the bad ones.
For example, because of the coronavirus crisis, airline stocks, cruise stocks, and hotel stocks have gone down significantly.
When you buy market index ETFs such as the S&P 500, you are buying these stocks too.
That’s the exact reason why I don’t want to blindly dump all my money in index ETFs anymore.
Instead, I prefer to hold a mix of individual stocks and carefully selected ETFs.
This is because I think that’s a better way to get much higher than average investment returns.
Below is a table that shows you the performance of individual stock picks over the years.
As of 6th September 2023, Motley Fool Stock Advisor has had 173 stock recommendations with 100%+ returns.
[Past performance is no guarantee of future results. Individual investment results may vary. All investing involves risk of loss.]
Now, let’s look at the performance of Rule Breakers compared to the S&P 500, as of 5 Sep 2023.
As of 5 September 2023, the stock picks in Motley Fool Rule Breakers have achieved a total average return of 243% since its inception while the S&P 500 had a 112% return over the same time period.
The Rule Breakers team has outperformed the market 2-to-1 by finding overlooked companies that they believe could be poised to shatter the market – often when these businesses are flying under Wall Street’s radar.
Motley Fool Stock Advisor vs. Motley Fool Rule Breakers: Investment Strategy
Regarding investment strategy, there is a key difference between the Motley Fool Stock Advisor and Motley Fool Rule Breakers.
The Motley Fool Rule Breakers investment strategy is focused on finding high-growth stocks.
So, what are high-growth stocks?
“A high growth stock is a stock of a company that is expected to increase its earnings at a faster rate than the average company within the same industry.”
These stocks are not well-known blue-chip stocks (e.g. Apple and Google), but little-known stocks that have great potential to be the market leader in the future.
Think “Amazon” and “Netflix” that was recommended by Motley Fool Rule Breakers many years ago.
By the way, here are the returns based on the date when they were first recommended:
- Google: 9,573%*
- Tesla: 14,656 %*
- Shopify: 39,116%*
- The Trade Desk: 16,918%*
Here are more examples of high-growth stocks that were picked by Rule Breakers‘ investment team:
- MercadoLibre: 5,589%*
- Intuitive Surgical: 5,232%*
- Meta (Previously Facebook): 1,143%*
- Etsy: 979%*
- Hubspot: 514%*
- Monster Beverage: 1,441%*
- Universal Display: 1,464 %*
[*Returns as of 27th Jan 2022 since it was first recommended. Past performance is no guarantee of future results. Individual investment results may vary. All investing involves risk of loss.]
So, what is their investment strategy for finding high-growth stocks?
Here are the 6 things that they look for in a good high-growth stock:
- Innovative Company (i.e. it must be an innovative company that is making waves in fast-growing and emerging industries)
- Competitive Advantage (i.e. it must have competitive advantages over its competitors. For example, patents, proprietary technology and etc)
- Sustainable Business (i.e. it must be a business with good long-term prospects and is unlikely to get disrupted by new technology)
- Good Management (i.e. it must have a good management team and strong leadership)
- Strong Consumer Appeal (i.e. it must have strong branding and strong customer interest)
For Motley Fool Rule Breakers stock picks, the potential returns are much higher, but the volatility (i.e. risk) is also much higher.
The reason is that “high growth” stocks are stocks that are usually priced much higher by investors due to their higher-than-average earnings growth.
As “high growth” stocks, they don’t yet have an established earnings history and are still in the “growth” stage”, unlike blue-chip stocks.
For example, McDonald’s has a proven history of positive earnings since 1965.
Although you won’t see double-digit growth in its earnings, you are unlikely to see a big drop in its earnings either.
So, its stock price would be less volatile than high-growth stocks.
With high-growth stocks, anything can happen.
If its impressive growth cannot continue as expected, you would probably see its stock price nose-dive.
On the other hand, if it can keep growing, you would probably see its stock price skyrocket.
As a result, if you invest in high-growth stocks, you must be prepared for the volatility in your stock portfolio.
Now, let’s look at the investment strategy behind the Motley Fool Stock Advisor.
The investment team behind Motley Fool Stock Advisor looks for companies that have a great business model, have good financials, and are undervalued.
Simply put, they follow the value investing approach that was made famous by Warren Buffet.
So, Motley Fool Stock Advisor’s stock recommendations are usually fundamentally strong companies with good growth prospects in the long term.
The investment team behind Motley Fool Rule Breakers is always looking for companies that have growth potential and are (or are going to be) the market leader.
So, Motley Fool Rule Breakers’ stock recommendations are high-growth stocks that are more risky and volatile than Motley Fool Stock Advisor’s stock recommendations.
Motley Fool Stock Advisor vs. Motley Fool Rule Breakers: Which Is Better?
This really depends on your risk appetite, investment experience, and investment objectives.
If you are a beginner investor, I would highly recommend Motley Fool Stock Advisor because it’s very beginner-friendly.
Inside Motley Fool Stock Advisor, members will get Starter Stock recommendations to help build their investment portfolio from scratch.
That’s helpful for investors who don’t really know where to start.
On top of the Starter Stocks, members will also get “Best Buy Now” as well as the latest stock recommendations.
If you are an experienced investor, I think you could also benefit from Motley Fool Stock Advisor.
No one can possibly analyze and research every single stock on the stock market.
Also, no one has in-depth knowledge of every industry out there.
So, I think there is a possibility that you might miss out on some great investment opportunities by doing everything on your own.
By joining Motley Fool Stock Advisor, members could leverage their investment expertise and experience.
Personally, I subscribe to Motley Fool Stock Advisor for these exact reasons.
Now, does that mean that Motley Fool Rule Breakers is not good?
No, Motley Fool Rule Breakers is good for experienced investors who want some exposure to high-growth stocks in their portfolio and are comfortable with taking risks.
Generally, these high-growth stocks are risky.
But, with high risk comes high returns.
So, I think it’s possible to find potential two-bagger or even five-bagger stocks in Motley Fool Rule Breakers.
Motley Fool Stock Advisor vs. Motley Fool Rule Breakers: Pricing
So, how much are the Motley Fool Stock Advisor subscription and Motley Fool Rule Breakers subscription?
Let’s first look at Motley Fool Rule Breakers‘ pricing.
Its annual subscription used to cost $299 per year.
But, right now, it is just $99 a year to join Motley Fool Rule Breakers as a NEW member using this link, which is just $1.9 a week.
If you are looking for high-growth stock picks, then I would highly recommend Motley Fool Rule Breakers.
Now, what about Motley Fool Stock Advisor?
Before we look at the prices, let’s look at what you get from your Motley Fool Stock Advisor subscription:
- You will receive two stock recommendations every month (one stock recommendation on the first Thursday and the other one on the third Thursday of the month). Each new stock recommendation comes with a full analysis of the opportunities and risks
- The current Top 10 Favorite Investment Opportunities are released on the second Thursday of every month
- 10 Foundational Stocks for new investors (regularly updated)
- 5 Exchange-Traded-Funds
- You will receive a real-time email notification when it’s time to sell, so you are never left wondering what to do
- You gain instant access to all past Motley Fool’s Stock Advisor recommendations
So, how much does Motley Fool Stock Advisor cost?
Usually, its annual subscription is $199.
Right now, there’s a special limited-time $79 offer* for new members for the first year when you click the link here to try it out for 30 days with a Membership-Fee-Back Guarantee. (*Billed annually. Introductory price for the first year for new members only. First-year bills at $89 and renews at $199)
So, for $79 a year- that’s just $1.70 a week – you can gain unlimited access to their library of expert stock recommendations which are carefully selected to help you grow your wealth.