- About The Motley Fool Stock Advisor and Rule Breakers
- Stock Advisor and Rule Breakers Similarities
- Stock Advisor vs. Rule Breakers: Investing Style
- Stock Advisor vs. Rule Breakers: Performance
- Stock Advisor vs. Rule Breakers: Newsletter and Picks Format
- Pricing Comparison
- Stock Advisor vs. Rule Breakers: Which Service is Better?
- Alternatives to Stock Advisor and Rule Breakers
- Conclusion: The Motley Fool Stock Advisor vs. Rule Breakers
The Motley Fool is one of the most trusted and most successful stock-picking services on the market. This company offers several different newsletters in addition to stock news and analyst commentary. Two of the most popular services that The Motley Fool offers are Stock Advisor, the flagship stock-picking newsletter, and Rule Breakers, a newsletter focused on innovative and explosive tech companies.
In this comparison, we’ll cover everything you need to know about Rule Breakers and Stock Advisor and help you decide which service is right for you.
About The Motley Fool Stock Advisor and Rule Breakers
The Motley Fool was founded in 1993 by brothers Tom and David Gardner as an investment advice and research company. Since its launch, The Motley Fool has focused on making it easy for everyday investors to get access to high-quality analysis and learn about top stock picks.
The Gardner brothers launched the Stock Advisor service in 2002. Each month, Tom Gardner and his team of analysis recommend one stock, and David Gardner and his team recommend another. The newsletter comes just once a month and is targeted at long-term investors.
David Gardner launched Rule Breakers in 2004. Rule Breakers is focused on companies, typically in the tech sector, that are poised to become leaders in emerging industries and technologies. It uses a similar format to Stock Advisor, taking the form of a once-monthly email newsletter with two stock picks.
Both programs are very similar, but it’s the slight differences that may lead you to favor one over the other. First things first, let’s look at the similarities before we dive deeper into the comparison.
Stock Advisor and Rule Breakers Similarities
Stock Advisor and Rule Breakers are more alike than they are different. As we go through this comparison, you will likely realize that the two services are complementary vs. competing services. Here’s what you can expect from both programs.
- Stock Picks – Both programs offer 2 new stock picks every month
- Credibility – Both programs have 15+ year track records
- Price – Both services are priced at $99/year (discounted pricing for new members)
- Returns – Both programs have been beating the S&P 500 consistently
- Flagship Services – Motley Fool has dozens of investment services, but Rule Breakers and Stock Advisor are the flagship offerings
Now that we’re clear on the similarities, let’s take a closer look at some of the distinctions between the two programs.
Stock Advisor vs. Rule Breakers: Investing Style
The main difference between Rule Breakers and Stock Advisor is the type of investments that these stock picking services are focused on. Stock Advisor is focused on long-term growth stocks, with an emphasis on companies that haven’t yet realized their full market potential. For example, past stock picks include Costco, Amazon, and Netflix, chosen in the early days of each of these companies. Here are some example picks from the Stock Advisor program:
One of the things that’s interesting about Stock Advisor is that Tom and David Gardner each contribute one pick per month. Tom and his team tend to focus on stocks in beaten-down industries that he believes are undervalued. He looks for companies with strong financials and good track records. David and his team, on the other hand, look for companies in emerging industries and focuses on the intangible factors that drive customer loyalty.
Rule Breakers is run by David and his team of analysts alone. There is a lot of similarity to the picks he offers for Stock Advisor. Both types of picks aim to beat the market, but Rule Breakers focuses on explosive stocks that are poised to take over a newly forming industry. In particular, David looks for businesses that have competitive advantages thanks to intellectual property or unique leadership. For Rule Breakers, stock price appreciation is a sign of momentum that will carry forward, rather than a signal that a stock is overvalued and should be avoided. Here are some example picks from the Rule Breakers program:
Notably, both of these stock picking services are built for long-term investors. The investment horizon for most picks is at least one year, and often three to five years. Often, David and Tom will encourage subscribers to invest more money in a past pick over time rather than to cash out a position.
Stock Advisor vs. Rule Breakers: Performance
The performance of both the Rule Breakers and Stock Advisor services has been nothing short of incredible. Stock Advisor has returned more than 500% over the past 18 years compared to 95% for the S&P 500. That’s in large part thanks to picks like Amazon (+19,731%), Disney (+6,611%), and Netflix (+20,293%). Obviously, not all of Stock Advisor’s picks have 1,000x returns, but the vast majority of Stock Advisor picks are profitable.
Rule Breakers has returned over 165% since its launch in 2004. Among the stocks this service has picked are Tesla, Baidu, and Under Armour. While not quite as impressive as Stock Advisor, that’s still more than double the S&P 500’s return over the same time period (+80%).
Stock Advisor vs. Rule Breakers: Newsletter and Picks Format
Rule Breakers and Stock Advisor share a common format. Both services include once-a-month email newsletters that include two new stock picks. Each stock pick is accompanied by a brief summary of why Tom or David recommend it, which is in-depth but also relatively accessible to lay investors.
Each newsletter also includes a brief update on the current portfolio of picks so you know whether to consider closing any positions. Both Rule Breakers and Stock Advisor also have five “Best Buys” picks, which are already open picks in the portfolio that Tom or David believe are worth putting more money into right now.
One of the only aspects of these two newsletters that is different is that Stock Advisor includes a list of “Starter Stocks.” This list includes stocks that Tom and David believe should be part of every long-term portfolio and which are always recommended during a pullback in the market.
Both Rule Breakers and Stock Advisor are priced at $99 per year (discounted rate for new members). Compared to most other stock picking services, this is incredibly cheap.
Stock Advisor vs. Rule Breakers: Which Service is Better?
Both Rule Breakers and Stock Advisor are excellent stock picking services. They’re each inexpensive, easy to act on, and have incredible track records.
These services are designed to be used together. When you sign up for both services, you get access to more monthly stock picks so you can build a more diversified portfolio. If you have the budget to pay for both services, you will likely get a lot of value out of them both. Subscriptions are backed by a money-back guarantee in case you find you prefer one over the other.
That said, if you have to pick one newsletter, Stock Advisor is the better choice for most investors. It includes a wider diversity of picks since both Tom and David Gardner bring their respective styles to the service. This service has also outperformed Rule Breakers over the past 16 years by a significant amount. The included list of “Starter Stocks” can also be helpful if you want to get your portfolio off the ground immediately.
If you want more stock picks, using Stock Advisor and Rule Breakers together is an excellent strategy and gives you four new stock picks each month. Paying for both newsletters is still less expensive than most comparable stock picking services.
Alternatives to Stock Advisor and Rule Breakers
One of the downsides to Stock Advisor and Rule Breakers is that you’re only given information about the month’s stock picks, not market-wide data to inform your own investment decisions. If you want to do your own stock research, consider a service like Zacks Premium or IBD Leaderboard.
Zacks Premium offers lists of stock recommendations, which are ranked based on qualities like growth, value, and momentum. There are dozens of recommendations every day, so you’ll need to do your homework to decide which stocks are a fit for your portfolio. Zacks Premium costs $249 per year.
IBD Leaderboard is a more expensive service oriented towards technical traders. Every stock pick comes with an annotated chart to illustrate entry and exit points. This service costs $69 per month, making it far more expensive than either Stock Advisor or Rule Breakers.
Conclusion: The Motley Fool Stock Advisor vs. Rule Breakers
The Motley Fool Stock Advisor and Rule Breakers are two stock picking newsletters with incredible performance over the past two decades. They’re inexpensive enough that signing up for both can help you build a portfolio of long-term growth stocks quickly. But if you have to sign up for one service, we recommend Stock Advisor because of its stronger returns and balanced approach to the stock market.