Motley Fool Review [2016 to 2023] : Read First, Before Trying Stock Advisor or Rule Breakers!
The Motley Fool is a well-known investment company that provides stock recommendations and other financial guidance 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 3x since its inception. Another popular Motley Fool service is Rule Breakers, which focuses on identifying disruptive company's 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 believed will outperform the market over the long-term.
Motley Fool Stock Picks 2016 to Present
| Best Picks (2016 to 2023) | Return* | Annualized Return |
| E-commerce Company | 2,610% | 65% |
| Advertising Tech Company | 2,183% | 73% |
| Computer Graphics Company | 1,548% | 52% |
| Electric Car Company | 1,472% | 257% |
| Cloud Database Company | 992% | 54% |
| Cybersecurity Company | 661% | 37% |
| Freight Forwarding Company | 629% | 37% |
| Cloud Software Company | 628% | 98% |
| Semiconductor Company | 586% | 30% |
| Collaboration Software Company | 569% | 31% |
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. Results are calculated from recommendation date to 12/31/2021. 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-time | Stock Advisor | Rule Breakers | Winner |
| 3 Months | 8.34% | 9.48% | +13.66% Rule Breakers |
| 6 Months | 19.72% | 21.27% | +7.89% Rule Breakers |
| 9 Months | 31.69% | 33.57% | +5.95% Rule Breakers |
| 1 Year | 42.53% | 42.48% | +.13% Stock Advisor |
| 2 Years | 100.13% | 113.27% | +13.12% Rule Breakers |
| 3 Years | 153.44% | 152.91% | +.34% Stock Advisor |
| 4 Years | 208.65% | 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 |
Click here to See the Latest Stock Advisor Picks (Sep 22nd, 2023)
Who had Better Long-term Performance?
| Long-term Performance by 4th Yr | Stock Advisor | Rule Breakers | Winner |
| New Recommendations | 107.21% | 146.13% | +36.31% Rule Breakers |
| Best Buys | 68.93% | 76.88% | +11.53% Rule Breakers |
| Foundational Stocks | 83.32% | 191.8% | +130.19% Rule Breakers |
| Blended Average | 86.49% | 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 purpose 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.
These picks are believed to be the most timely opportunities 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 referred 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 2021 | Stock Advisor | Rule Breakers | Winner |
| #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 |
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
| Sector | Return | % of Picks | Annualized Return |
| Information Technology | 160% | 38% | 80% |
| Consumer Discretionary | 104% | 16% | 52% |
| Financials | 96% | 9% | 48% |
| Communication Services | 79% | 11% | 40% |
| Materials | 25% | 1% | 12% |
| Healthcare | 21% | 11% | 11% |
| Industrials | 9% | 10% | 5% |
Rule Breakers Performance Review by Sector - 2016 to 2021
| Sector | Return | % of Picks | +Annualized Return |
| Real Estate | 230% | 2% | 115% |
| Information Technology | 166% | 31% | 83% |
| Communication Services | 121% | 16% | 61% |
| Healthcare | 93% | 21% | 46% |
| Financials | 82% | 2% | 41% |
| Consumer Discretionary | 72% | 16% | 36% |
| Utilities | 57% | 2% | 29% |
Click Here to See the Latest Rule Breakers Picks (Sep 22nd, 2023)
Performance vs. The Market (Annualized)
| Annualized Returns by 4th Yr | Stock Advisor | Rule Breakers | Winner |
| New Recommendations | 52.16% | 85.66% | +64.22% Rule Breakers |
| Best Buys | 17.23% | 19.22% | +11.53% Rule Breakers |
| Foundational Stocks | 20.83% | 47.95% | +130.19% Rule Breakers |
| Blended Average | 30.08% | 50.94% | +69.39% Rule Breakers |
| S&P 500 | 16.67% | 16.67% | +.% Rule Breakers |
Click here to See the Latest Stock Advisor Picks (Sep 22nd, 2023)
| New Recommendations | Stock Advisor | Rule Breakers | Winner |
| 1 Year | 42.53% | 42.48% | +.13% Stock Advisor |
| 2 Years | 50.07% | 56.63% | +13.12% Rule Breakers |
| 3 Years | 51.15% | 50.97% | +.34% Stock Advisor |
| Blended Average | 47.91% | 50.03% | +4.41% Rule Breakers |
| Foundational Stocks | Stock Advisor | Rule Breakers | Winner |
| 1 Year | 33.51% | 32.06% | +4.51% Stock Advisor |
| 2 Years | 39.06% | 30.14% | +29.6% Stock Advisor |
| 3 Years | 34.01% | 35.81% | +5.29% Rule Breakers |
| Blended Average | 35.53% | 32.67% | +8.74% Stock Advisor |
| Best Buys | Stock Advisor | Rule Breakers | Winner |
| 1 Year | 40.31% | 45.13% | +11.97% Rule Breakers |
| 2 Years | 41.43% | 42.86% | +3.46% Rule Breakers |
| 3 Years | 32.68% | 34.82% | +6.57% Rule Breakers |
| Blended Average | 38.14% | 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, making them two of the best investment choices available. If you're looking for solid investment advice, the Motley Fool is definitely worth considering.
Tips on Getting Started Investing
- Exercise due diligence: Prior to allocating capital to any investment, conduct comprehensive research to ensure a thorough understanding of the asset in question.
- Consider enlisting a reputable subscription service: If uncertain about where to commence, a service like Motley Fool Stock Advisor can offer valuable guidance. This platform supplies stock selections and analyses from a skilled team of specialists, with a performance history of surpassing market averages.
- Embrace diversification: When constructing a stock portfolio, incorporating a range of assets is crucial to mitigating risk.
- Develop a strategic investment blueprint: Establishing and adhering to a well-defined plan enables discipline and minimizes the temptation to make hasty decisions that could result in financial setbacks.
- Allocate a sensible budget: Determining a budget and remaining within its confines is essential for preventing excessive investment and mitigating unwarranted risk.
- Cultivate patience: Patience is a virtue in the world of investing. Attempting to time the market is typically a futile endeavor, so exercise restraint and wait for opportunities to invest in robust companies with strong fundamentals at appealing valuations.
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Did you know that...
- Companies in their growth phase might not pay dividends as they reinvest earnings to further fuel their expansion?
- When analyzing CAGR of two or more investments, it's essential to ensure the same time frame is used for an accurate comparison?
- Paul tudor jones, a legendary hedge fund manager, is known for his macro trades and once said, "the secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge"?
- Anchoring bias can cause investors to rely heavily on the first piece of information they encounter (like an initial stock price) and ignore subsequent data?
- Being open to changing your investment strategy, based on new information, is a sign of adaptability and not inconsistency?
Quotes of the Day:
- "The best way to predict the future is to study the past." - Thomas Rowe Price Jr.
- "The best investment strategy is to buy great companies when the market is in a panic." - Marty Whitman
- "The best way to make money in the stock market is to buy low and sell high." - Julian Robertson
- "Investing is not about predicting the future, it's about understanding the present." - Christopher Davis
- "The biggest mistake investors make is to believe that what happened in the recent past is likely to persist." - Jim Simons
*Disclaimer: Unless noted otherwise all returns are as of Sep 20, 2023. Past performance is no guarantee of future results. Individual investment results may vary. All investing involves risk of loss.
We provide general information, not investment advice. Some of the links on this page are affiliate links in which we receive a commission when a purchase is made.
$89 promotional price for new members only. $110 discount based on current list price of Stock Advisor of $199/year. Membership will renew annually at the then current list price.
$99 promotional price for new Rule Breakers members. $200 discount based on current list price for Rule Breakers of $299. Membership will renew annually at the then current list price.