Motley Fool Stock Advisor vs Rule Breakers

  • Stocks from experts with a proven track record
  • Strong financial performance
  • Low-cost service
  • Impressive returns
  • Real growth stock picks
  • Mobile buy and sell alerts

Beating the market is every investor’s dream, but for most people, this remains but a fleeting ambition. Approximately 90% of actively managed funds fail to beat the market over extended periods.

Motley Fool has made a reputation out of consistently beating the market via its Stock Advisor program, but also its Rule Breakers program. These subscription-based programs are designed to beat the market using different stock recommendations.

There’s no doubt that both programs have performed well over the years, but when comparing Motley Fool Stock Advisor vs. Rule Breakers, which one is right for you?

Stock Advisor Overview

Motley Fool Stock Advisor is the platform’s original program. Since launching in 2002, hundreds of thousands of investors worldwide have relied on it for picking stocks. The Gardner brothers have built their reputation on these stock picks, which is why it’s the Fool’s premier program.

Our Motley Fool review focused primarily on the Stock Advisor program because of its notoriety.

To put it simply, Stock Advisor consists of two teams, led by the Gardner brothers. They work with a group of analysts to pick the best stocks for this service.

How Does Stock Advisor Work?

Each team recommends a new stock to add to your portfolio every month. Both units operate using different philosophies.

David’s team chooses stocks based on long-term market trends and what he refers to as “unquantifiable greatness.” From the other side, Tom’s team searches for companies boasting strong financial performance, excellent management teams, and companies with a presence in underrated industries.

Furthermore, each team will reveal a further five stocks that subscribers should purchase immediately.

So, every month, you receive six stock recommendations from each team. For beginners, this is ideal as the list of recommended stocks is constantly updated. You can also view each month’s previous stock picks and judge them based on their performance.

Stock Advisor has existed for nearly 20 years, but its prime has been in the last ten years where both teams have chosen tons of winners.

Although each team uses different methods to select stocks, both brothers have something in common. They’re designed for long-term performance, which is why all Stock Advisor subscribers are advised to hold each stock for a minimum of two to five years.

Stock Advisor suits all investing styles. Tom chooses stocks from less popular industries, which allows you to pick up great stocks at a discount. David searches for stocks with the so-called X-factor to help them make significant gains over time.

You’re not required to choose either team. Many investors pick recommended stocks from both sides to give themselves a balanced portfolio.

Stock Advisor Fees

Since Motley Fool Stock Advisor is not a brokerage but a subscription-based stock picking service, you must pay the annual subscription fee to gain full membership privileges.

As of this writing, the full cost is $199 per year for Stock Advisor. But you can use our link to get 60% off your first year. Compared to other services, it’s incredibly inexpensive.

New subscribers can also take advantage of a discount. For your first year, you will only pay $79.

Stock Advisor Pros

  • Stocks from experts with a proven track record
  • Strong financial performance
  • Low-cost service

Stock Advisor Cons

  • Recommendations often cause market spikes
  • Not ideal for short-term traders
  • Not every pick is a winner

To conclude, Stock Advisor is the big breadwinner for the Motley Fool for a reason. To learn more about the program, read our Motley Fool review now.

Rule Breakers Overview

Stock Advisor is aimed at the average investor, whereas Rule Breakers is there to swing for the fences. This program is run exclusively by David Gardner and focuses on companies that have the potential to become the market leaders of tomorrow.

In other words, Rule Breakers is the program that looks to pinpoint the companies that have the potential for explosive growth in the years to come.

For those with a more aggressive investing strategy, Rule Breakers could be the Motley Fool subscription for you.

How Does Rule Breakers Work?

Rule Breakers is all about taking big swings and hitting a home run. As much as it sounds like gambling, Rule Breakers has an impressive batting average.

This program aims to pinpoint the companies that either have the right management team in place within a new industry or businesses with unique advantages in established niches.

Many Rule Breakers recommendations have beaten the conventional wisdom and surpassed their competitors. David uses many of the same principles in choosing stocks within the Rule Breakers program as he does within the Stock Advisor program.

Like the Stock Advisor program, you’ll receive monthly stock recommendations. Even though only one team plays, you’ll still receive two stock recommendations per month.

For additional recommendations, Rule Breakers offers a Best Buys list. They also have a Starter Stocks list for those investors who want to build a portfolio around high-growth companies.

Rule Breakers Fees

Access to the Rule Breakers program is more expensive than Stock Advisor. Rather than $199 per year, expect to pay $299 per year for a subscription. New subscribers can take advantage of the Motley Fool introductory offer and pay just $99 for their first year.

While Rule Breakers is more expensive, it’s well worth it for higher net worth investors who want to expand their portfolios beyond the bounds of the Stock Advisor program.

Most subscribers to Rule Breakers are also members of the basic Stock Advisor program.

Rule Breakers Pros

  • Impressive returns
  • Real growth stock picks
  • Mobile buy and sell alerts

Rule Breakers Cons

  • Not all stock picks are winners
  • Less successful than the Stock Advisor program

Understand that Rule Breakers has a different goal and methodology in mind. The right program for you largely depends on your strategy and how you want to make your money.

Stock Advisor vs. Rule Breakers: Comparison

Feature Stock Advisor Rule Breakers
Cost $199 $299
Five-Year Performance Up by 331%
Profitable Stock Percentage 81% 84%
Number of Stocks Doubled 57 out of 120 63 out of 120
Five-Year Sell Orders Five Five

Stock Advisor vs. Rule Breakers: Which One is Best for You?

When comparing the performance of each program, there’s little between them. Both have hit big home runs and consistently beaten the markets. Although Rule Breakers has generated a 331% gain vs. 233% gain for Stock Advisor, this is only over a five-year period. There’s no guarantee Rule Breakers will continue to perform as well, especially when market turbulence comes into play.

Over the last twenty years, Motley Fool Stock Advisor has beaten out Rule Breakers most of the time. Remember, Rule Breakers is just two years younger than Stock Advisor.

It should also be mentioned that Rule Breakers has reported the biggest winner every year, but they’ve also recorded the biggest loser. This is consistent with the philosophy of shooting for the stars. Things can either go really right or really wrong.

The right option for you largely depends on your investing strategy and discipline. If you have the money to buy equal dollar amounts of stock every month from their tailored recommendations, Rule Breakers is the best option for you. They tend to have more losers than Stock Advisor, but their winners tend to cover these losses.

If you like to pick and choose and don’t intend on following all of their monthly recommendations, pick up Stock Advisor instead.

Finally, there’s no harm in subscribing to both. Many investors do that and perform their own research before deciding which of the Fool’s recommendations to add to their portfolios.

Sign up for Motley Fool Stock Advisor and get your first year for just $79.

Bob Haegele

About the Author:

Bob Haegele is a personal finance writer, entrepreneur, and dog walker. Bob has been writing about personal finance for three years and now manages several personal finance sites, including The Frugal Fellow, Modest Money, and Blooming Wealth. You can also find him contributing to popular websites such as Yahoo! Finance, MSN Money, and GOBankingRates. You can see more of his work on Muck Rack and Contently, or connect with him on LinkedIn.