Stock picking is a huge part of what it means to be a successful investor. Many of the products at Modest Money help investors who prefer to automate much of the process, such as our robo-advisors.
Stock picking, or active management of one’s portfolio, remains an elusive art form. Studies have shown that over 15 years, 92% of large-cap funds trail the S&P500. So, it’s no surprise that there are so many programs that simply offer no value.
In our Motley Fool review, we focused mainly on the Motley Fool Stock Advisor. Today, we want to talk about the Rule Breakers program and whether it offers better value.
What is Motley Fool Rule Breakers?
Motley Fool Rule Breakers is much the same as the Stock Advisor, only this stock picking service focuses on industry disruptors rather than existing household names.
Within the Rule Breakers portfolio, there are the companies expected to alter the way we do things. Previous picks have included Tesla, Facebook, Shopify, and Etsy.
There is a heavy emphasis on tech companies. Thus, if you decide to follow Rule Breakers, you should always keep diversity in mind.
Although these are essentially the same product, picks for both programs are made by independent analysts. In most cases, there’s no crossover between the two. In fact, during the last 18 years, each team has recommended the same stock only 28 times. That’s despite two picks per month, or 24 per year.
Do these Motley Fool Stocks Beat the Market?
A Motley Fool subscription to Stock Advisor can beat the market many times over, but can the same be said for Rule Breakers?
On average, Rule Breakers beats the market ten times over. Some of the biggest winners ever seen from this newsletter include:
- Tesla – 10,149% growth
- Shopify – 7,132% growth
- MercadoLibre – 1,690% growth
- Facebook – 1,409% growth
Of course, not every single stock chosen by Rule Breakers will lead to four-figure growth, but few stocks have led to investors taking a loss. Hence, it has been overwhelmingly positive on the whole.
We are incredibly impressed with the quality of the picks and the fact that Motley Fool analysts always seem to catch hyper-growth stocks.
In short, with Rule Breakers the majority of Motley Fool stocks will beat the market.
How Much Does Motley Fool Rule Breakers Cost?
Like Stock Advisor, Motley Fool Rule Breakers does come with an annual subscription. The current listed price is $199 a year. This marks a drop from the previous price of $299.
While investors may find purchasing Stock Advisor and Rule Breakers is too much to justify, the Motley Fool’s 25-year track record of successful stock market analysis is the main reason we recommend them at Modest Money.
Pros and Cons of Motley Fool Rule Breakers
While this Motley Fool review highly recommends trying out Rule Breakers, we understand that this isn’t the investing strategy for everybody.
For example, one of Rule Breakers’ biggest picks was Tesla, which is well-known for its historical volatility. Experts are divided over whether high-volatility Tesla can justify its high price. Investors who cannot handle the ups and downs of a stock like this likely won’t want to invest in Rule Breakers.
Anyway, here are the main pros and cons of this program.
- Impressive Record – There is no getting around the fact that the Fool has picked some real winners.
- Good Value for Money – Compared to the returns, this Motley Fool subscription offers great value for money.
- Monthly Growth Stock Picks – Monthly picks lend themselves well to regular investing and a diversified portfolio.
- High-Volatility Stocks – Few investors can avoid pressing the “Sell” button when the price is going up and down. For Rule Breakers, you need to cope with higher volatility levels.
- Limited Customer Service – Like other Motley Fool stock recommendation programs, there is limited customer service. If you need someone to hold your hand, this isn’t the service for you.
How Should Rule Breakers Fit into Your Overall Portfolio?
Rule Breakers focuses on hyper-growth stocks with a big emphasis on the tech industry. Even if you follow Motley Fool’s recommendations to the letter, it shouldn’t form the only part of your portfolio. With 24 stocks chosen per year, it’s unwise to invest everything you have into this alone.
Create a well-diversified portfolio by focusing some of your funds on more stable assets. Thankfully, Motley Fool already has guides on how to do this. Its Starter Stocks program is an excellent starting point for the newer investor.
Spreading your wealth to protect the integrity of your portfolio is ultimately what will protect your net worth and help it grow going forward.
The Bottom Line
The bottom line is we highly recommend Motley Fool Rule Breakers if you are searching for hyper-growth stocks. While not every pick is going to be a slam dunk, a home run, they do have an impressive track record of nailing stock recommendations.
Plus, since they brought the overall price down it has only become more valuable. Want to find out more about Rule Breakers or sign up for a subscription with Stock Advisor? We worked out a big discount for new members which you can get by following this link.