Motley Fool Stock Advisor Review – 2018 Stock Picking Performance Review
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How did the 2018 Motley Fool Stock Advisor Picks Perform? It’s time to look back at the 2018 performance of the Motley Fool Stock Advisor (read our 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 on the Motley Fool Stock Advisor way of investing so you can better decide if the service is right for you.
For those unfamiliar, Stock Advisor has three types of recommendations which are…
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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.
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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.
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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 Stock Advisor (read our review) in 2018.
How did the 2018 Stock Advisor Picks Perform Long-term?
| 1 Year | 2 Years | 3 Years | As of (3/21/22) | |
|---|---|---|---|---|
| New Recommendations | 24% | 99% | 227% | 133% |
| Best Buys | 15% | 72% | 140% | 97% |
| Foundational Stocks | 2% | 39% | 72% | 66% |
| Blended Average | 14% | 70% | 146% | 99% |
New Recommendations produced a 133% cumulative return to date. Best Buys produced a 97% cumulative return to date. Foundational Stocks produced a 66% cumulative return to date. Blended Average produced a 98% cumulative return to date.
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The Best Stock Advisor Picks of 2018
Here are the 5 best Motley Fool Stock Advisor stock recommendations from 2018.
| 1 Year | 2 Years | 3 Years | As of (3/21/22) | |
|---|---|---|---|---|
| #1 Best Pick | 165% | 329% | 805% | 481% |
| #2 Best Pick | 16% | 245% | 736% | 467% |
| #3 Best Pick | 77% | 361% | 801% | 439% |
| #4 Best Pick | 95% | 387% | 746% | 406% |
| #5 Best Pick | 128% | 254% | 554% | 304% |
If $5000 Invested: $4,799, $15,768, $36,419, $20,958
The best Stock Advisor pick from 2018 produced a 481% return by the 4th year, making a $1000 investment worth $5,806. A $1000 investment in each of these picks would have returned you $20,958 by the fourth year. That’s the power of compounding returns. That 5x return on one stock would cancel out 5 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 Stock Advisor Picks (May 25th, 2024)
How did Stock Advisor Perform vs Rule Breakers?
While Stock Advisor performance was great, Rule Breakers (read our review) out-performed in many categories. Rule Breakers had…
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82% higher 6-month returns
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77% higher 3-month returns
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12% higher 9-month returns
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The Worst Stock Advisor Picks from 2018
Here are the 5 worst-performing Motley Fool Stock Advisor recommendations from 2018 to date.
| As of (3/21/22) | |
|---|---|
| #1 Worst Pick | -60%, -41%, -9%, -76% |
| #2 Worst Pick | 8%, 1%, 120%, -63% |
| #3 Worst Pick | -31%, -52%, 3%, -31% |
| #4 Worst Pick | 8%, -31%, -34%, -26% |
| #5 Worst Pick | -4%, -41%, -11%, -13% |
If $5000 Invested: $4,203, $3,358, $5,679, $2,897
The worst Stock Advisor pick from 2018 was down -76% by Mar 21, 2022, making a $1000 investment worth just $236. A $1000 investment in each of these picks ($5000 total) is worth $2,897 as of Mar 21, 2022. Based on equal weight investing, the 5 best picks returned 8x more money than the losses from the 5 worst picks in 2018.
5 Best Picks by the Charts
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#1 Best Stock Advisor Pick from 2018
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#2 Best Stock Advisor Pick from 2018
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#3 Best Stock Advisor Pick from 2018
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#4 Best Stock Advisor Pick from 2018
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#5 Best Stock Advisor Pick from 2018
How did the 2018 Stock Advisor Picks Perform in the Short-term?
| 3 Months | 6 Months | 9 Months | 1 Year | |
|---|---|---|---|---|
| New Recommendations | 5% | 8% | 19% | 24% |
| Best Buys | 1% | 5% | 11% | 15% |
| Foundational Stocks | 7% | 20% | 28% | 2% |
| Blended Average | 4% | 11% | 19% | 14% |
New Recommendations produced an average return of 5% at 3 months and 19% at 9 months. 1. As of 03-21-2022 2. One year after recommendation.
Click here to See the Latest Stock Advisor Picks (May 25th, 2024)
Stock Advisor 2018 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.
| 15%+ Returns at 1 Year | 50%+ Returns at 1 Year | 3x Returns | 10x Returns | |
|---|---|---|---|---|
| New Recommendations | 58% | 33% | 21% | |
| Best Buys | 47% | 22% | 11% | 1% |
| Foundational Stocks | 60% | 40% |
How did the 2018 Stock Advisor Picks Perform in the Short-term? New Recommendations had 58% of picks with 15%+ returns in the first year and 33% with 50%+ returns. So far to date, 21% have had 300%+ returns, 0.0% have had 1000%+ and one pick with an amazing 481% return. Best Buys had 47% of picks with 15%+ returns and 22% with 50% returns at one year. Foundational Stocks had 60% of picks with 15%+ returns and 40% with 50%+ returns at one year.
Stock Advisor Performance Review by Sector - 2018
| Sector | Return | % of Picks | Annualized Return |
|---|---|---|---|
| Information Technology | 147% | 67% | 73% |
| Healthcare | 33% | 4% | 17% |
| Consumer Discretionary | 14% | 13% | 7% |
| Industrials | -9% | 8% | -4% |
| Communication Services | -12% | 4% | -6% |
| Financials | -26% | 4% | -13% |
The top performing sectors were information technology, healthcare, and consumer discretionary with information technology yielding the highest return of 147%. The average sector weight was 17% with the largest sector accounting for 67% of the picks.
Performance vs. The Market (Annualized)
| 1 Year | 2 Years | 3 Years | |
|---|---|---|---|
| New Recommendations | 24% | 49% | 76% |
| Best Buys | 15% | 36% | 47% |
| Foundational Stocks | 2% | 20% | 24% |
| Blended Average | 14% | 35% | 49% |
| S&P 500 | -7% | 10% | 12% |
Click here to See the Latest Stock Advisor Picks (May 25th, 2024)
Conclusion
The stock picks from Motley Fool Stock Advisor in 2018 strongly outperformed the market in nearly every category. The annualized returns on the new recommendations beat the market by 517% in the 3rd year and the Best Buys beat the market by 281% in the same period. Stock Advisor continues 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 Stock Advisor is a great investing companion well worth the $99/year (for new members). Additionally, the Motley Fool has a similar service called Rule Breakers which in many categories has out-performed Stock Advisor. 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.
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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…
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Confirmation bias can trap investors into seeking information that only confirms their pre-existing beliefs, leading to a narrow view of the market?
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Trying to time the market consistently is nearly impossible, and being out of the market during just a few of the best days can significantly impact returns?
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Risk tolerance is an investor’s ability and willingness to endure market volatility in pursuit of their financial goals?
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Commodities, whether it’s gold, oil, or agricultural products, can be a hedge against inflation and diversify an investment portfolio?
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‘Green shoots’, a term from economics, refers to early signs of recovery or positive data amidst a downturn, useful for spotting potential rebounds?
Quotes of the Day:
“The best way to predict the future is to study the past.” - Donald Yacktman
“The key to successful investing is to buy low and sell high.” - John Rogers
“The stock market is a highly efficient mechanism for the transfer of wealth from the impatient to the patient.” - David Tepper
“Investing is not a science. It is an art.” - Michael Burry
“The individual investor should act consistently as an investor and not as a speculator.” - Benjamin
Related Motley Fool Resources:
- •See the latest Motley Fool stock picks.
- •Find the Best Stock Advisor Sites & Services.
- •Take advantage of our Motley Fool discounts.
- •Review our detailed Motley Fool Stock Advisor Review.
🧠 Thinking Deeper
- ☑️ Learn to hold steady during market declines. Panic selling is often the worst move you can make.
- ☑️ Develop the ability to tune out market noise and focus on what truly matters.
- ☑️ Take calculated risks. The biggest risk is often not taking any risk at all.
- ☑️ Be very wary of anyone claiming to have a foolproof system for beating the market.
📚 Wealthy Wisdom
- ✨ The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell. - Sir John Templeton
- ✔️ Behind every stock is a company. Find out what it's doing. - Peter Lynch
- 🌟 Investing is the intersection of economics and psychology. - Seth Klarman
- 🚀 An investment in knowledge pays the best interest. - Benjamin Franklin
📘 Table of Contents
- • How did the 2018 Stock Advisor Picks Perform Long-term?
- • The Best Stock Advisor Picks of 2018
- • How did Stock Advisor Perform vs Rule Breakers?
- • The Worst Stock Advisor Picks from 2018
- • 5 Best Picks by the Charts
- • How did the 2018 Stock Advisor Picks Perform in the Short-term?
- • Stock Advisor 2018 Win Rates
- • Stock Advisor Performance Review by Sector - 2018
- • Performance vs. The Market (Annualized)
- • Conclusion