Investing in individual stocks can be very lucrative, but only if you make the correct stock picks. Analyzing stocks on all the important metrics is extremely time-consuming and takes a significant amount of knowledge about the stock market.
To help point you in the right direction, we suggest you consider stock picks from some of the most reputable stock investing services. Of note, Motley Fool picks have a history of vastly outperforming the stock market.
But should investors subscribe to the Motley Fool Rule Breakers service or Stock Advisor one? And just as importantly: Is Motley Fool legitimate?
This Stock Advisor and Rule Breakers review will provide you with information to answer these questions and help you determine which Motley Fool stock picks service is the better fit for you.
And if neither Motley Fool product meshes with your preferred investment strategy, that’s OK. Because we’ll highlight additional stock recommendation service options at the end of the article.
What Are the Motley Fool Newsletter Subscriptions?
Motley Fool is a well-known and widely trusted investing advice company. They provide a variety of investment services, with two of the most popular being their Rule Breakers and Stock Advisor newsletters.
While both of these Motley Fool newsletters email two new stock recommendations each month and have excellent track records of beating the S&P 500 (by far), there are key differences between them.
Stock Advisor concentrates on safer, established companies. In contrast, Motley Fool Rule Breakers picks stocks that are more volatile, but also have high growth potential.
Some investors choose whichever newsletter fits better with their investing style, while others subscribe to both.
The sections below go into detail about each newsletter subscription, how the picks are chosen, how they perform, costs, and more.
Motley Fool Stock Advisor Overview
- Available: Sign up here
- Price: Discounted rate for the first year, $199 annually thereafter
David Gardner began an investment newsletter in 1993 and was soon joined by his brother Tom. In August 1994, they formed Motley Fool.
The website has free informational content, but not the stock recommendations offered from the premium services run by the company. To see those, you need a subscription to one of their stock-picking services, such as Rule Breakers and Stock Advisor.
Motley Fool Stock Advisor is their flagship stock picking service, which began in 2002.
The stocks they choose are often well-known, not too volatile, predicted to beat the stock market, and are meant to be held for at least five years.
The service recommends buying and holding a minimum of 25 stocks as part of a diversified portfolio of stocks. (Using other investment strategies outside of the market can further diversify your returns.)
Stock Advisor does all the grunt work of researching stocks for you so you know exactly what to buy.
They even begin your subscription with a shortlisting of what they term, “Starter Stocks,” or companies they believe represent the best stocks to own as part of the foundation of your portfolio.
The Stock Advisor and Rule Breakers investment newsletters provide monthly stock picks from two investing teams: Team Everlasting and Team Rule Breakers.
The Stock Advisor newsletter relies on both Team Everlasting stocks and Team Rule Breakers stocks. Per Motley Fool, Team Everlasting looks for:
- “High-quality companies with economic moats and strong company fundamentals that grant them the potential to keep growing and beat the overall market over extremely long periods”
- “Founder-led companies (no new management teams beyond original founders)”
- “Companies employing a strong corporate culture”
- “Substantial pricing power built through competitive advantages, customer loyalty and product differentiation”
- “Cash-rich, low-debt companies (financially stable)”
And Team Rule Breakers looks for:
- “First-mover companies in emerging, but important industries that have become the top dogs in their niches”
- “Companies with sustainable competitive advantages”
- “Sizable past increases in share prices”
- “Companies with good management teams”
- “Businesses with strong consumer appeal that have built up brand awareness”
- “Stocks that are grossly overvalued according to mainstream financial media sources”
Stock Advisor Performance
The Motley Fool Stock Advisor stock picks have performed exceptionally well over their 20 year existence. The company has made 167 stock recommendations that have delivered 100%+ returns, multiplying members’ net worth.
Since inception in February 2002, the service has enjoyed a return of 374% when you calculate the average returns of all of their stock recommendations.
Comparatively, the S&P 500 only had a 125% return during that same timeframe. Motley Fool’s solid track record should instill trust in potential users looking for a stock advice subscription service.
Stock Advisor Stock Picks
David Gardner bought Amazon all the way back in September 1997 before Motley Fool even existed. It skyrocketed.
Many forget that Amazon isn’t only powerful in the retail space, but Amazon Web Services is also extremely profitable.
The company also has established a formidable position in the burgeoning digital advertising market, growing significantly faster than competitors like Meta’s Facebook social media network or Alphabet’s Google or YouTube search engines.
Amazon is up over 15,000% since it was offered as a Stock Advisor pick. The company met all of the requirements listed above at the time of stock recommendation.
Walt Disney started as a movie studio, expanded to a theme park and television station operator, and now has a popular streaming service.
The company first issued over-the-counter stock in 1940, but its New York Stock Exchange IPO wasn’t until November 12, 1957. As a very established company with much room for growth, it’s easy to see in retrospect why the service targeted it.
Disney is up by more than 6,000% since Motley Fool recommended it to subscribers.
Netflix went public on May 23, 2002, at $15 per share. Two years later, it executed a 2-for-1 stock split. In December 2004, Motley Fool’s David Gardner recommended investors buy Netflix, even though it was a small-cap stock down 50% from its 52-week high.
Less than a year after the recommendation, the stock rose over 100%. Since Stock Advisor’s recommendation, Netflix is up over 10,000%.
Buying Netflix when Motley Fool first recommended it certainly made substantial gains for any investor that held it long enough.
What to Expect from Stock Advisor:
The Motley Fool Stock Advisor stock picking service provides a lot of worthwhile resources to subscribers:
- “Starter Stocks” recommendations to serve as a foundation to your portfolio for new and experienced investors
- Two new stock picks each month
- 10 “Best Buys Now” chosen from over 300 stocks the service watches
- Investing resources with the stock picking service’s library of stock recommendations
- Access to community of investors engaged in outperforming the market and talking shop
The Stock Advisor stock picking service offers discounted introductory rates to new users. The Stock Advisor discount varies, but it comes at a substantially lower price than current subscribers pay for renewing their membership.
And all Stock Advisor subscriptions come with a full membership-fee back guarantee.
Now, on to our Rule Breakers review.
Motley Fool Rule Breakers Overview
Motley Fool Rule Breakers focuses on stocks that the Rule Breakers team believes have massive growth potential in emerging industries. This stock subscription service isn’t fixating on what’s currently popular, but rather always looking for the next big stock.
Looking for upcoming industry leaders means these Motley Fool picks have the potential to increase in value exponentially.
For example, Rule Breakers saw the power of e-commerce before many others. Current emerging industries include blockchain technology, robotics, artificial intelligence, and more. Given this investment focus for Rule Breakers picks, the selections favor growth stocks more so than dividend stocks.
Rule Breakers does the legwork for investors and makes it easy to adjust portfolios in just a few minutes per month.
The Motley Fool Rule Breakers portfolio follows over 200 companies and has six rules they follow before making stock recommendations to subscribers:
- Only invest in “top dog” companies in an emerging industry – As Motley Fool puts it: “It doesn’t matter if you’re the big player in floppy drives — the industry is falling apart.”
- The company must have a sustainable advantage
- Company must have strong past price appreciation
- Company needs to have strong and competent management
- There must be strong consumer appeal
- Financial media must overvalue the company
As you can see, before recommending a stock to users, Rule Breakers considers a number of factors. In short, the service mainly looks for well-run companies in emerging industries with a sustainable advantage gained over competitors, among other factors.
And their rules seem to pay off if their results have anything to say about it.
Rule Breakers Performance
Over the past 15 years, Rule Breakers has more than doubled the S&P 500, beating many leading money managers on Wall Street. They’ve recommended 134 stocks with 100%+ returns.
Rule Breakers Stock Picks
MercadoLibre, which operates online marketplaces dedicated to e-commerce, is one of the longest-held Rule Breakers stock picks.
While the stock can be volatile, it rises high overall.
MercadoLibre is up over 5,500% since it was first entered the Rule Breakers portfolio.
Rule Breakers tends to see the potential in e-commerce and the now household name Shopify is a terrific example of this.
The platform had its IPO in May 2015 and priced the stock at $17 per share. It currently costs nearly four hundred per share and that’s far below its all-time high.
Shopify has risen over 1,600% since the Rule Breakers newsletter recommended it.
Tesla has been a Rule Breakers pick for a long time. This tends to be a stock that investors either love or hate as it’s volatile.
For Rule Breakers, they love it. As one of the most talked-about companies and one with disruptive technology, it’s a natural fit for the newsletter.
When Rule Breakers first recommended the stock to members, it was only at a split-adjusted price of $6.29.
From when Rule Breakers made it a stock pick, Tesla is up over 11,000%.
What to Expect From Rule Breakers:
The service includes three primary items you can expect to receive:
- A listing of Starter Stocks to begin your Rule Breakers journey with their “essential Rule Breakers”
- 5 “Best Buys Now” opportunities each month
- Two new stock picks each month
You’ll receive regular communications from the stock picking service with their analysis and rationales for buying stocks meeting their investment criteria.
If you’re unhappy with the Motley Fool Rule Breakers service within the first month, you have a full membership-fee back guarantee.
Motley Fool Rule Breakers vs Stock Advisor
Now that we know a bit about each service individually, let’s see how they stack up head-to-head.
Different Inception Dates
The Stock Advisor service came on the scene in 2002. Motley Fool Rule Breakers began in 2004.
Returns vs. S&P 500 Since Inception
Stock Advisor has tripled the S&P 500 over the last two decades. Whereas the S&P 500 is up 125%, Stock Advisor picks are up 374%.
Stock Advisor stocks performed well over the last two decades, having 169 stock recommendations with 100%+ returns and the average stock pick has a 356% return.
Average Rule Breakers stock picks have returned over 202%. They’ve beaten the market over the last 17 years and more than doubled the S&P 500 during that time.
Both services have greatly outperformed the S&P 500, with Stock Advisor coming out ahead of Rule Breakers.
The main difference between Motley Fool’s flagship stock picking services is the type of stock pick recommendations.
Stock Advisor primarily recommends well-established companies. Over a decade ago, they advised subscribers to buy companies such as Netflix and Disney, which have been majorly successful.
Motley Fool Rule Breakers focuses on stocks that they believe have massive growth potential in emerging industries. In other words, riskier picks which theoretically have more upside.
A Stock Advisor subscription is better for the following:
- Beginner investors interested in building portfolios of stock investments
- Stock picking based on fundamental analysis
- Investors with moderate risk appetite
- Market-beating returns (over long periods)
- Broader sector selection for investment picks
A Rule Breakers subscription is better for the following:
- More experienced investors (more sophistication and risk-tolerance)
- Growth-oriented stocks with strong consumer appeal
- Greater reliance on momentum and growth stocks
- Looking for standout stocks likely to be tomorrow’s stock market leaders
- Preference for new technologies (e.g., SaaS, Cloud-based applications, etc.)
The Stock Advisor services cost $199 per year and new members can often get the first year for a discounted rate. There is a 30-day money-back guarantee.
Motley Fool Rule Breakers costs $299 per year, but you can get your first year for a discounted rate as well.
Like Stock Advisor, if you don’t like Rule Breakers within the first 30 days and want to cancel, you can get your membership fee back.
Number of Stocks Covered
Stock Advisor: Over 300
Rule Breakers: Over 200
Motley Fool Invests Its Own Money in Both Sets of Stock Picks
Sometimes, Motley Fool chooses to invest its own money in its monthly stock recommendations.
These monthly stock picks fall into what Motley Fool calls a Real Money Portfolio. For picks not purchased with Motley Fool’s own money, they fall into their Model Portfolio.
- Real Money Portfolio. Motley Fool team invests its own money in the listed stock recommendations made by the portfolio service.
- Model Portfolio. Motley Fool doesn’t invest its own money in these recommendations, however Motley Fool offers allocation guidance to members including examples of how to balance your money across the investment recommendations.
Which Should You Pick? Rule Breakers vs Stock Advisor?
So which Motley Fool stock investing service should you pick? That depends on your investing experience and risk tolerance.
If you’re a beginner or intermediate investor who wants to invest in high-quality, established companies, Stock Advisor might be for you.
The service mainly uses fundamental analysis to pick which companies will continue to succeed. This is for people with a medium-level risk tolerance.
Motley Fool Rule Breakers is an excellent fit for investors willing to take on a bit riskier stock picks for higher reward potential.
Rule Breakers focuses on high-growth stocks primed to be tomorrow’s leaders. This service is best for more experienced investors and those better able to tolerate volatility.
Both Motley Fool services have proven themselves to make great stock picks, so it’s just a matter of which fits your investment style better. Many investors subscribe to both Motley Fool plans.
What Are Some Other Investment Advisory Services?
1. Motley Fool Everlasting Stocks
- Available: Sign up here
- Price: Discounted rate for the first year
Another Motley Fool service, Everlasting Stocks, aims to find stocks you can hold forever.
Not all investors have the time or desire to stay up-to-date on stock trends. But Everlasting Stocks’ investment advice only takes a few minutes each month to apply.
More than 700,000 members get new stock picks every quarter from Tom Gardner as well as unlimited access to their library of expert stock recommendations.
There are quarterly recommendations as well as portfolio alerts and updates. Investors who aren’t ready to buy a stock can add it to a watch list to see its progress.
When you sign up, you receive immediate access to 15 starter stocks. Previous Motley Fool Everlasting Stocks picks include big names such as Shopify and Tesla.
This service can be used alone or complement other Motley Fool services, such as Stock Advisor or Rule Breakers. This service concentrates more on your overall portfolio than on just individual stock picks.
Monthly subscriptions are $39 per month. Annual subscriptions for new members are only $99, making it significantly cheaper. A year upfront costs less than three months paid monthly. If you like this Motley Fool service during the first year, it’s $299 per year after.
There is a 30-day membership fee-back guarantee.
If you’re a return Motley Fool customer and would like to subscribe to Stock Advisor, Rule Breakers, and Everlasting Stocks, you can subscribe using the Motley Fool Epic Bundle package for a discounted rate.
2. Seeking Alpha Premium
- Available: Sign up here
- Price: Free; $99/year ($8.25/mo*) billed annually for Premium; $2,388.86/year billed annually for Pro (or $199.99/mo monthly)
Crowd-sourced investment content service Seeking Alpha was founded in 2004. The platform has millions of members who read diverse investing opinions from thousands of contributors.
While many of the articles are free, only Premium members can see the author’s ratings and the expert analyses.
Seeking Alpha Premium has a vast variety of information and tools that allow investors to take a deep dive into stocks.
The platform provides a decade’s worth of financial statements, earnings call transcripts, author ratings, dividend & earnings forecasts, and much more.
Subscribers can compare up to six stocks or funds side by side, contrasting enterprise values, quant ratings, Wall Street ratings, quant factor grades, and many more factors.
Investors can try the service free for 7 days. Membership becomes cheaper the more you pay upfront.
3. Zacks Premium Services
- Available: Sign up here
- Price: Premium: $249/year
Zacks Investment Research conducts independent investment research on stocks, emphasizing corporate earnings estimates. It was founded in 1978.
The service is very strong in sharing earnings per share (EPS) estimates and primarily uses quantitative models.
While Zacks provides some popular free content, such as Bull of the Day and Bear of the Day picks and earnings-per-share estimates, for the most valuable content, investors should sign up for Zacks Premium.
Zacks Premium provides you with stock pick lists, such as Zacks #1 Rank List, Zacks Ranks, Zacks Recommendations, and the Focus List portfolio.
These lists have varying timelines, so whether you’re looking for short-term, medium, or long-term holds, there is something for every investor.
Zacks Premium also has several tools that let investors filter for investments with the criteria that matter to them most.
Some of the most popular criteria include Zacks Rank, Zacks Industry Rank, Value Score, Growth Score, Momentum Score, VGM Score, and Earnings ESP. That is just a small sample of the many filters one can choose.
This service is available on a 30-day trial.