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Motley Fool Review & Discounts – 5 Years of Stock Picks Analyzed!

- TraderHQ Staff

The Motley Fool is a well-known investment advice company that provides stock recommendations and other financial advice through its website and various subscription services. The company was founded in 1993 by brothers David and Tom Gardner, and it has become one of the most respected names in the investing world.

One of the Motley Fool's most popular services is Stock Advisor, which provides subscribers with stock picks and market analysis from a team of expert analysts. The service has an impressive track record, with its picks outperforming the market by an average of about 4x since its inception. Another popular Motley Fool service is Rule Breakers, which focuses on identifying disruptive companies that are poised for strong growth.

Stock Advisor is the company’s original service. You get two stock recommendations each month, and access to a searchable archive of past recommendations. The Motley Fool’s analysts research and recommend stocks that they believe will outperform the market over the long-term.

Of course, past performance is no guarantee of future results, but it does show that the Motley Fool’s stock picks have been quite successful.

In this Motley Fool review, we'll analyze the company's Stock Advisor and Rule Breakers services from 2016-2021 to see how they've performed in terms of stock picking. We'll compare their performance against the S&P 500 to get a complete picture of what investing in Motley Fool stock picks actually looks like.

Motley Fool Review – Stock Advisor vs Rule Breakers

Returns Over-timeStock AdvisorRule BreakersWinner
3 Months8.34%9.48%+13.66% Rule Breakers
6 Months19.72%21.27%+7.89% Rule Breakers
9 Months31.69%33.57%+5.95% Rule Breakers
1 Year42.53%42.48%+.13% Stock Advisor
2 Years100.13%113.27%+13.12% Rule Breakers
3 Years153.44%152.91%+.34% Stock Advisor
4 Years208.65%342.65%+64.22% Rule Breakers
15%+ Returns
at 1 Year
74.23%79.38%+6.94% Rule Breakers
50%+ Returns
at 1 Year
47.42%51.55%+8.7% Rule Breakers
3x Returns
by 4th Yr
8.25%15.46%+87.5% Rule Breakers
10x Returns
by 4th Yr
1.03%5.15%+400% Rule Breakers

Bundle Offer: Stock Advisor + Rule Breakers + Everlasting Stocks. 1 Year for $299

Who had Better Long-term Performance?

Long-term Performance by 4th YrStock AdvisorRule BreakersWinner
New Recommendations107.21%146.13%+36.31% Rule Breakers
Best Buys68.93%76.88%+11.53% Rule Breakers
Foundational Stocks83.32%191.8%+130.19% Rule Breakers
Blended Average86.49%138.27%+59.88% Rule Breakers

The 3 Types of Stock Recommendations

Both services have the same general structure offering three different types of recommendations each with a different purpose.

The main focus of each service revolves around the new recommendations. Two new recommendations come out monthly and are meant to be the stocks that provide alpha or growth to a portfolio.

The next type are the "Best Buys" or "timely" stocks, which Stock Advisor releases bi-weekly, five per release. Rule Breakers in contrast releases five just once per month. The purose of these recommendations are for those who are looking to dollar cost average into past recommendations or for those looking to diversify a bit more.

Theses picks are believe to be the most timely opportunites from past recommendations. This is also a great way for members to see which are the highest conviction stocks on a monthly basis.

The final type are the foundational stocks or what the Fool previously refered to as "starter stocks". These 10 recommendations come out just once per year, in Q1 and meant to provide a strong base of stability as well as growth to new and established portfolios.

These recommendations tend to be stocks that are more established, have good earning power and much less volatility than the new recommendations. They won't provide the high growth that the new recommendations are meant to provide but they help to diversify a portfolio.

Who had the highest yielding best picks?

Best Picks from 2016 to 2021Stock AdvisorRule BreakersWinner
#1 Best Pick:2,015%3,151%+56.43% Rule Breakers
#2 Best Pick:970%2,509%+158.49% Rule Breakers
#3 Best Pick:953%1,852%+94.39% Rule Breakers
#4 Best Pick:942%1,200%+27.43% Rule Breakers
#5 Best Pick:827%1,112%+34.5% Rule Breakers
If $5000 Invested$57,069$98,248+72.16% Rule Breakers

Click Here to See the Latest Rule Breakers Picks (Jul 11th, 2022)

One of the differences between the two services is the type of stocks that they focus on. Stock Advisor tends to focus on a much broader market, top to bottom, still growth oriented but just not entirely tech. While Rule Breakers is really a high growth, innovation and first to market type of focus which tends to be more tech.

Stock Advisor Performance Review by Sector - 2016 to 2021

SectorReturn% of PicksAnnualized Return
Information Technology160%38%80%
Consumer Discretionary104%16%52%
Financials96%9%48%
Communication Services79%11%40%
Materials25%1%12%
Healthcare21%11%11%
Industrials9%10%5%

Rule Breakers Performance Review by Sector - 2016 to 2021

SectorReturn% of Picks+Annualized Return
Real Estate230%2%115%
Information Technology166%31%83%
Communication Services121%16%61%
Healthcare93%21%46%
Financials82%2%41%
Consumer Discretionary72%16%36%
Utilities57%2%29%

Performance vs. The Market (Annualized)

Annualized Returns by 4th YrStock AdvisorRule BreakersWinner
New Recommendations52.16%85.66%+64.22% Rule Breakers
Best Buys17.23%19.22%+11.53% Rule Breakers
Foundational Stocks20.83%47.95%+130.19% Rule Breakers
Blended Average30.08%50.94%+69.39% Rule Breakers
S&P 50016.67%16.67%+.% Rule Breakers

Click here to See the Latest Stock Advisor Picks (Jul 11th, 2022)

New RecommendationsStock AdvisorRule BreakersWinner
1 Year42.53%42.48%+.13% Stock Advisor
2 Years50.07%56.63%+13.12% Rule Breakers
3 Years51.15%50.97%+.34% Stock Advisor
Blended Average47.91%50.03%+4.41% Rule Breakers
Foundational StocksStock AdvisorRule BreakersWinner
1 Year33.51%32.06%+4.51% Stock Advisor
2 Years39.06%30.14%+29.6% Stock Advisor
3 Years34.01%35.81%+5.29% Rule Breakers
Blended Average35.53%32.67%+8.74% Stock Advisor
Best BuysStock AdvisorRule BreakersWinner
1 Year40.31%45.13%+11.97% Rule Breakers
2 Years41.43%42.86%+3.46% Rule Breakers
3 Years32.68%34.82%+6.57% Rule Breakers
Blended Average38.14%40.94%+7.35% Rule Breakers

The Motley Fool is a well-respected investment advice company that has a strong track record of successful stock picking. The company's Stock Advisor and Rule Breakers services have both outperformed the market by a wide margin in recent years, making them two of the best investment choices available. If you're looking for solid investment advice, the Motley Fool is definitely worth considering.

Bundle Offer: Stock Advisor + Rule Breakers + Everlasting Stocks. 1 Year for $299

Tips on Getting Started Investing

  1. Do your research: Before investing in anything, it's important to do your stock research and make sure you understand what you're buying.
  2. Consider using a service like Motley Fool Stock Advisor: If you're not sure where to start, a subscription service like Stock Advisor can be a great way to get started. The service provides stock picks and stock analysis from a team of experts, and its picks have outperformed the market by a wide margin since its inception.
  3. Don't put all your eggs in one basket: When investing in stocks, it's important to diversify your portfolio.
  4. Have a plan: It's important to have a plan for your investments, and to stick to that plan. This will help you stay disciplined and avoid making impulsive decisions that could lead to losses.
  5. Set a budget: When investing in stocks, it's important to set a budget and stick to it. This will help you avoid over-investing and taking on too much risk.
  6. Be patient: When investing in stocks, it's important to be patient and wait for the right opportunities. Trying to time the market is often a losing proposition, so it's better to wait for good companies with solid fundamentals that are trading at attractive prices.

Quotes of the Day:

  • "The key to making money in stocks is not to get scared out of them". - Peter Lynch
  • "In investing, what is comfortable is rarely profitable." – Robert Arnott
  • “The intelligent investor is a realist who sells to optimists and buys from pessimists.” - Benjamin Graham
  • "It is better to hang out with people better than you. Pick out associates whose behavior is better than yours and you will drift in that direction". - Warren Buffett
  • "Always start at the end before you begin. Professional investors always have an exit strategy before they invest. Knowing your exit strategy is an important investment fundamental". - Rich Dad
  • "It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." – George Soros
  • "If you are not successful, that means you’re not making enough mistakes". - Robert Kiyosaki