Motley Fool Rule Breakers Review – 2017 Stock Picking Performance Review

How did the 2017 Motley Fool Rule Breakers Picks Perform? It’s time to look back at the 2017 performance of the Motley Fool Rule Breakers (in-depth review) service and analyze all the stock picks measuring short and long-term performance 4 years later. For this review, we’ll analyze the performance of recommendations including the worst performers. We’ll break down the performance by the 3 recommendation types to get a complete picture of the Motley Fool Rule Breakers way of investing so you can better decide if the service is right for you.

For those unfamiliar, Rule Breakers has three types of recommendations which are…

• New Recommendations: These are high growth recommendations which they release two of them monthly. On occasion they are re-recommendations of a past pick when their conviction level is extremely high.

• Best Buys: These recommendations are released bi-weekly and they feature 10 timely recommendations which are believed to be the best stocks from all active recommendations current and past.

• Foundational Stocks: Sometimes called “Starter” stocks, these 10 stocks are released at the beginning of the year and are designed to provide maturity, stability, and growth to new and established portfolios.

In general, the Motley Fool recommends a portfolio construction of at least 25 stocks to have adequate diversity and the foundational stocks are meant to provide a base on which you begin purchasing new recommendations, building up over time to a portfolio of at least 25 holdings.

Probability of Positive Returns

The Motley Fool analyzed Stock Advisor performance from March 31, 2002 – November 19, 2021, using an average portfolio from an average month during that time period to help determine the optimal number of holdings and holding period. They found that the optimal number of stocks to hold is 25 and the optimal minimum holding period is 5 years which produced a 98.4% likelihood of positive returns with an average return of 89.6%.

So without further ado let’s dive in and look at the performance of Rule Breakers (in-depth review) in 2017.

How did the 2017 Rule Breakers Picks Perform Long-term?

New Recommendations produced a 290% cumulative return to date. Best Buys produced a 148% cumulative return to date. Foundational Stocks produced a 339% cumulative return to date. Blended Average produced a 259% cumulative return to date.

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The Best Rule Breakers Picks of 2017

Here are the 5 best Motley Fool Rule Breakers stock recommendations from 2017.

If $5000 Invested

$2,423, $13,207, $19,904, $44,733

The best Rule Breakers pick from 2017 produced a 1,852% return by the 4th year, making a $1000 investment worth $19,522. A $1000 investment in each of these picks would have returned you $44,733 by the fourth year. That’s the power of compounding returns. That 19x return on one stock would cancel out 19 other equal weighted investments that go to zero. That is the power of asymmetric risk. You can only lose 1x the money you invested, while you can gain 5x,10x,100x or more. That’s asymmetric returns and the primary draw of stock picking and the value of services like the Motley Fool offers.

Click Here to See the Latest Rule Breakers Picks (as part of the Epic Bundle)

How did Rule Breakers Perform vs Stock Advisor?

While Rule Breakers performance was great, Stock Advisor out-performed in many categories. Stock Advisor had 10% more 15%+ first-year returns

Bundle Offer: Stock Advisor + Rule Breakers + Everlasting Stocks + Real Estate Winners (in-depth review). 1 Year for $319

The Worst Rule Breakers Picks from 2017

Here are the 5 worst performing Motley Fool Rule Breakers recommendations from 2017 to date.

If $5000 Invested

$4,205, $3,589, $6,237, $2,701

The worst Rule Breakers pick from 2017 was down -90% by Mar 21, 2022, making a $1000 investment worth just $105. A $1000 investment in each of these picks ($5000 total) is worth $2,701 as of Mar 21, 2022. Based on equal weight investing the 5 best picks returned 17x more money than the losses from the 5 worst picks in 2017.

5 Best Picks by the Charts

1. Best Rule Breakers Pick from 2017

2. Best Rule Breakers Pick from 2017

3. Best Rule Breakers Pick from 2017

4. Best Rule Breakers Pick from 2017

5. Best Rule Breakers Pick from 2017

How did the 2017 Rule Breakers Picks Perform in the Short-term?

New Recommendations produced an average return of 19% at 3 months and 37% at 9 months. Best Buys produced an average return of 8% at 3 months and 34% at 9 months. Foundational Stocks produced an average return of 14% at 3 months and 25% at 9 months.

Click Here to See the Latest Rule Breakers Picks (as part of the Epic Bundle)

Rule Breakers 2017 Win Rates

Now let’s look at win rates and see what percentage of stocks produced a 15%+ and 50%+ return in the first year. Then let’s look at the unicorns and see how many 3x and 10x stock picks so far to date.

How did the 2017 Rule Breakers Picks Perform in the Short-term? New Recommendations had 71% of picks with 15%+ returns in the first year and 48% with 50%+ returns. So far to date 29% have had 300%+ returns, 9.5% have had 1000%+ and one pick with an amazing 1,852% return. Best Buys had 68% of picks with 15%+ returns and 43% with 50% returns at one year. Foundational Stocks had 78% of picks with 15%+ returns and 33% with 50%+ returns at one year.

Rule Breakers Performance Review by Sector - 2017

The top performing sectors were information technology, industrials, and healthcare with information technology yielding the highest return of 250%. The average sector weight was 19% with the largest sector accounting for 33% of the picks.

Performance vs. The Market (Annualized)

Conclusion

The stock picks from Motley Fool Rule Breakers in 2017 strongly outperformed the market in nearly every category. The annualized returns on the new recommendations beat the market by 275% in the 3rd year and the Best Buys beat the market by 109% in the same period. Rule Breakers continue to prove itself to be an invaluable source for oriented growth investing recommendations. And each year they continue to add exponentially more value through all the additional resources like daily market briefings, webcasts, market research, and more frequent updates and coverage on new and past recommendations. For serious investors just getting started or those with years and decades of experience, we believe Rule Breakers is a great investing companion well worth the $99/year (for new members).

Additionally, the Motley Fool has a similar service called Stock Advisor which in many categories has out-performed Rule Breakers. You can see our yearly reviews of that service here. We actually advise people to try both services together as they are very complementary to each other and provide 2x the stock recommendations and they come with a 30-day membership back fee guarantee.

Bundle Offer: Stock Advisor + Rule Breakers + Everlasting Stocks + Real Estate Winners. 1 Year for $319

More Stock Market Resources: Best Stock Advisor Websites & Services, Motley Fool Stock Advisor, Motley Fool Epic Bundle, Motley Fool Discounts, Best Stock Picking Services, Best Investment Advice Websites, Motley Fool Rule Breakers, Best Stock Analysis Websites, Motley Fool Investing Services

Did you know that…

• Inflation can erode purchasing power over time, so those with longer investment horizons need to ensure their returns outpace inflation?

• Defensive sectors like healthcare and utilities provide more stability during economic downturns, compared to cyclical stocks such as technology?

• Bond laddering is a strategy where investors buy bonds with different maturity dates, helping to manage interest rate risks and provide liquidity?

• The ‘bottom-up’ approach focuses on individual company performance without as much concern for macroeconomic conditions?

• The rate of return has a profound effect on compounding? A small difference in rate can result in substantial differences in end wealth over long periods.

Quotes of the Day:

“The best way to make money in the stock market is not to lose it.” - John Neff

“Investing is about finding value where others do not see it.” - Edward Lampert

“The best way to invest is to be patient.” - Ray Dalio

“The stock market is a no-called-strike game. You don’t have to swing at everything—you can wait for your pitch.” - David Tepper

“Investing is not about predicting the future, it’s about understanding the present.” - Christopher Davis