The Motley Fool is one of the most trusted and most successful stock-picking services on the market. This company offers more than a dozen different newsletters in addition to stock news and analyst commentary. Two of the most popular services that Motley Fool offers are Stock Advisor, its flagship stock-picking newsletter, and Rule Breakers, a newsletter focused on innovative and explosive tech companies.
Wondering which of these stock picking services is right for you? Keep reading our Motley Fool Rule Breakers vs. Stock Advisor comparison to find out.
About 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, Motley Fool has focused on making it easy for everyday investors to get access to high-quality stock 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 is targeted at long-term investors.
David Gardner launched Rule Breakers in 2004. The Rule Breakers portfolio 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.
It’s worth noting that David Gardner recently stepped back from day-to-day stock analysis at Motley Fool as he approaches retirement. However, the team of analysts he put together is still in charge of picks for half of Stock Advisor’s recommendations and all Rule Breakers’ recommendations.
Both programs are very similar, but it’s the slight differences that may lead you to favor one over the other. 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 rather than 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 relatively affordable ($199/year for Stock Advisor and $299/year for Rule Breakers)
- 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 lies in 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 and could become tomorrow’s stock market leaders. 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’s teams each contribute one pick per month. Tom and his team tend to focus on value stocks in beaten-down industries. He looks for companies with strong financials and good track records. David’s team, on the other hand, looks for companies in emerging industries and focuses on the intangible factors that drive customer loyalty when picking stocks.
Rule Breakers is run by David’s 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, the Rule Breakers team looks for businesses that have competitive advantages thanks to intellectual property or excellent management teams. For Rule Breakers picks, 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 typically three to five years, and some picks have been in the Stock Advisor portfolio for more than a decade. Often, the newsletters will encourage subscribers to invest more money in a past pick over time rather than 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 400% over the past 21 years compared to 119% for the S&P 500. That’s in large part thanks to picks like Amazon (+13,246%), Nvidia (+16,792%), and Netflix (+18,181%). Obviously, not all of Stock Advisor’s picks have 1,000x returns, but the vast majority of Stock Advisor picks are profitable.
Motley Fool’s Rule Breakers service has returned more than 210% since its launch in 2004. Past Rule Breakers stock picks include Tesla (+8,700%), Mercado Libre (+8,759%), and Shopify (+2,057%). While not quite as impressive as Stock Advisor, Rule Breakers has still more than doubled the S&P 500’s return over the same time period (+101%).
Stock Advisor vs. Rule Breakers: Newsletter and Picks Format
The Rule Breakers service and Stock Advisor service share a common format. Both services issue new stock picks twice a month, around two weeks apart. Each stock pick is accompanied by a brief summary of why it’s recommended. The investment research is in-depth but also relatively accessible to lay investors.
In between new recommendations, both services offer updates and analysis on stocks already in the portfolio. These aren’t meant to be groundbreaking analyses, but they are helpful for learning more about the companies you own or getting an update on their outlooks.
Each newsletter also includes two lists: Rankings and Foundational Stocks. The Rankings list (formerly the best buys now list) is includes the 10 of the best stocks already in the portfolio to double-down on. It’s a great resource for investors who have some extra cash to invest and want to know what companies to buy.
The Foundational Stocks list (formerly the starter stocks list) includes growth stocks that Motley Fool analysts think every investor should own. The list includes 10 stocks for Stock Advisor and 8 for Rule Breakers.
Stock Advisor is priced at $199 per year and Rule Breakers is priced at $299 per year. Compared to almost any other stock picking service, this is incredibly cheap.
You can also bundle the two services to save. If you want even more Motley Fool stock picks, you can sign up for Motley Fool Epic Bundle to get access to Stock Advisor, Rule Breakers, Real Estate Winners, and Everlasting Stocks. The Epic Bundle costs $499 per year.
Stock Advisor vs. Rule Breakers: Which Service is Better?
Both Rule Breakers and Stock Advisor are excellent stock picking services for investors seeking market-beating returns. They’re each inexpensive, easy to act on, and have incredible track records.
These services are designed to be used together, which is where the Epic Bundle makes a lot of sense. When you sign up for the Epic Bundle, you get access to more monthly stock recommendations so you can build a more diversified portfolio. If you have the budget to pay for this bundle, you will likely get a lot of value out of it. All Motley Fool subscriptions are backed by a money-back guarantee in case you find you prefer one newsletter over the others.
That said, if you have to pick just one newsletter, Motley Fool’s Stock Advisor is the better choice for most investors. It includes a wider diversity of picks since both Tom and David Gardner’s teams bring their respective styles to the service. This service is also slightly cheaper than Rule Breakers and has outperformed Rule Breakers over the past 19 years by a significant amount.
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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 are the best stocks 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 a Stock Advisor or Rule Breakers subscription.
Conclusion: 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 high-growth stocks quickly. If you have to choose one service for stock investing, we recommend Stock Advisor because of its stronger returns and balanced approach to the stock market.