Motley Fool is one of the most successful stock picking services and has been around long enough to establish credibility in the market.
Motley Fool offers two packages that offer different approaches to investing.
Stock Advisor focuses on growth stocks with a view to long term investing in companies Motley Fool has identified as being potentially significant growth due to an analysis that full market potential has yet to be reached.
On the other hand, Rule Breakers suggests stock picks that are more disruptive in nature. Picks are mainly in the Information Technology space. They are potentially high return investments but are riskier than Stock Advisor investments.
Summary of Stock Advisor
If you are new to investing in stocks, Stock Advisor is an excellent service to get you started.
Stock Advisor provides you with regular stock picks as starter stocks, which are excellent for building your portfolio from scratch.
These picks provide you with suggested “must-have” stocks for your portfolio. In addition, you will be given 2 new stock picks per month. This is perfect for the average investor who just does not have the time or the energy to wade through reams of information to select their own stock picks.
Stock picks are often “blue chip” stocks with reasonably low risk due to a history of solid returns.
Summary of Rule Breakers
Rule Breakers is also based on significant research by Motley Fool. However, instead of stock picking tried and tested companies, Rule Breakers is constantly on the lookout for companies with that elusive unique characteristic that could just provide really high returns.
Compared to Stock Advisor, these picks are higher rewards with higher risks.
|Stock Advisor||Rule Breakers|
|Claimed performance figures||Cumulative return of 537% compared to S&P 500 of 139%||Cumulative return of 284% compared to S&P 500 of 120%.|
|Performance over last 5 years||Up 233%||Up 331%|
|NOTE – both services beat the S&P 500 by a good margin|
|Number of picks per month||1 stock recommendation plus 5 top-picks||1 stock recommendation plus 5 top-picks|
|Picks based on solid analysis and research||Tom and David Gardner, the founders of Motley Fool and a team of analysts||David Gardner and a team of analysts|
|Cost of service – first-time subscription||$99 per year – but discounted to $79 per year if you click here||$299 per year|
|Cost of service from the second year onwards||$199 per year||$299 per year|
|Propose recommended sells?||Y||Y|
|Provide reasoning behind recommended sells?||Y||Y|
|Access to customer service via email and phone?||Y||Y|
Who is Each Service Aimed at?
Rule Breakers looks to add investments with higher than average returns. As the name suggests, the search is for those companies that break the rules, bring an innovation or novel approach, disrupt industries. So if you are looking to add some big winners to your portfolio, this could be for you.
However, understand that there may also be big losers that could offset your wins, and you have a greater tolerance for volatility and are less risk-averse; this option will suit you.
Stock Advisor is better suited to an investor who wants to buy and hold solid value stocks which have performed well, are at lower risk but will probably outperform the S&P 500 based on the performance history of Stock Advisor.
If you are brand new at investing, it is better and cheaper to start with Stock Advisor to build your essential portfolio. Once you have this in place, you can toy with the idea of moving into riskier stocks through Rule Breakers, provided you have the appetite for higher risk.
So Which Service is Better?
It depends on what you need and your strategy and investment philosophy at this point in time. Different horses for different courses.