Motley Fool Review & Discounts – 5 Years of Stock Picks Analyzed!
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-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|
at 1 Year
|74.23%||79.38%||+6.94% Rule Breakers|
at 1 Year
|47.42%||51.55%||+8.7% Rule Breakers|
by 4th Yr
|8.25%||15.46%||+87.5% Rule Breakers|
by 4th Yr
|1.03%||5.15%||+400% Rule Breakers|
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 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 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|
Rule Breakers Performance Review by Sector - 2016 to 2021
|Sector||Return||% of Picks||+Annualized Return|
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|
|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 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.
Tips on Getting Started Investing
- Do your research: Before investing in anything, it's important to do your stock research and make sure you understand what you're buying.
- 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.
- Don't put all your eggs in one basket: When investing in stocks, it's important to diversify your portfolio.
- 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.
- 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.
- 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.
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