Some people argue that stock investing is akin to betting. And it’s difficult to argue against that if you are like-minded. However, successful investors will tell you that calculative and information-rich decisions will unlock the potential in stock investing.
In this day and age, accessing financial information is a bit easier, and therefore, making blind investment decisions should be a thing of the past. Online videos, research tools, blogs, and newsletters are readily available whenever you want to back-up your investment instincts.
With this in mind, stick on as we delve into Motley Fool’s Rule Breakers and Stock Advisor, two of the investment e-newsletters that will help you make sound investment decisions.
Would you want to find out the differences between the two newsletters? Would you like to understand the one that suits your investment style? Stick on for more insights.
Overall Rating: 4.6/5
Overall Rating: 4.3/5
About Rule Breakers
If you have been in the investing game for some time, you must be familiar with Motley Fool. But if you are not, let me do a quick intro. Motley Fool is an investment advisory platform founded in 1993 by David and his brother Tom Gardner. Now, fast forward to 2004, David Gardner and his team co-founded Motley Fool Rule Breakers to offer investment advice on little-known stocks in the market but with high growth potential.
About Stock Advisor
Two years earlier, the duo had initiated a platform, Motley Fool Stock Advisor, which offers investment advice on well-known and stable stocks in the market.
What services do members get?
On both Stock Advisor and Rule Breakers, members get two new stock recommendations every month. And that’s not all. David and his team comb through thousands of stocks every month. The result? See below:
1. Best buys
You receive Fool’s Rule Breakers “Best Buys” every Thursday. Similarly, with Stock Advisor, you receive 12 “Best Buy” picks every week. According to Motley Fool, they recommend stocks trading at the optimal price compared to their actual potential and competitors.
What more do you get?
One of the company’s strongholds is investment research. And true to their word, you will receive both summarized and comprehensive report of the stock picks. The reports provide a detailed rationale for why you should pick the stock and the potential risks involved.
Beyond recommending the stocks to buy, Motley Fool also sends you “Sell” alerts when it’s the opportune time to dispose of your stock. Such notification is essential as you don’t need to continue holding stocks unnecessarily when you can sell at a profit.
To this end, Motley Fool is much more than a stock-picking platform.
2. Starter stocks
Are you new to Motley Fool? Don’t worry about being left out. To get you started with your investment portfolio, you will receive “Starter Stocks” regardless of whether you are a Stock Advisor member or Rule Breakers.
This list is updated frequently to reflect the market’s realities. As a guide, try diversifying by buying stocks from different sectors. And the good thing is that most investment apps allow cost-free fractional investing. This flexibility makes it easier to buy fragmented stocks at a go.
Is that all? No. In addition to Starter stocks and Best Buys alerts, you also get the following:
- You gain access to all Motley Fool’s stock reports
- You get access to historical Motley Fool’s stock recommendations
At least once a year, you are likely to get a free bonus report in your newsletter.
Would you like to interact with like-minded fellow investors? You could get that with the “Rule Breakers Community” page. Man is not an island. And this is so true with investment. In this section, you can take part in fruitful discussions with your counterparts.
You can also participate in discussion boards for company-specific insights.
Notable differences between Stock Advisor and the Rule Breakers
Despite the difference in the year of formulation and a few variations here and there in service delivery, there are other differences between the two platforms. Let’s look into them.
Stock Advisor comes at an annual standard cost of $199. On the other hand, Rule Breakers will cost you $99 in your first year then $199 in the subsequent years if on offer. But without discounts, it costs you $299 per annum.
It would be best for either method to keep checking your email to take advantage of the periodic offers. Paying less subscriptions means you have a few more pennies to invest. Be wise.
Motley Fool offers a 30-day money-back guarantee for the peace of your mind if you want to opt-out of the membership. But you will unlikely exercise this option (as you will see soon).
2. Investment strategy
The two methods approach the market differently. The Rule Breakers target high volatile stocks while Stock Advisor targets relatively stable stocks. Below is a more in-depth look into the investment strategy of both techniques.
Rule Breakers’ investment strategy
Most, if not all, investors have a strategy when approaching the market. And you will agree with me that strategy is what makes or breaks an investor’s dream. Motley Fool, through Rule Breakers, also employs distinct investment strategies to discover market-beating stocks.
To that end, you may ask, what’s the investment strategy for David and his team? Below are the pointers they look out for when identifying high-growth stocks.
- Innovativeness: must be a disruptive company with the potential of turning heads in the market.
- Competitor advantage: must have a competitive edge over the rivals. For instance, their products offering are copyrighted, patented, and have proprietary rights.
- Sustainability: companies with a long-term approach are likely to survive in the market. They are proactive and unlikely to be disrupted by emerging technology and other trends.
- Good governance: the fish rots from the head, a common adage that’s very applicable in running a company. In identifying high-growth companies, strong leadership is an indicator of future growth.
- Appealing to customers: the company product offering must be appealing to invoke customers’ interest.
Where do Rule Breakers invest?
Would you like to know where Motley Fool sources the high-growth stocks? Having looked at their trend over the years, Rule Breakers are likely to recommend investing high-growth stocks from:
- IPO stocks, especially those of little-known companies
- Stocks of fast-growing companies, such as Big Data and 3D printing companies
- Foreign-based companies, especially in Asia
Stock Advisor’s investment strategy
Just like Rule Breakers, Stock Advisor has its investment strategy. But how different is it? Their approach is a bit more conservative. They invest in long-term investments that are less risky. Stock Advisor is more suitable for risk-averse investors.
Being the flagship product of Motley Fool, Stock Advisor is a bit more generic in its strategy. Nevertheless, you get reliable and credible investment advice.
3. Past performance
One distinct difference between the Stock Advisor and the Rule Breakers is performance. Over the past years, Rule Breakers have picked an aggregate score of 262 percent while Stock Advisor has picked up 502 percent over the same period.
But there is a bit more to those numbers that you need to note. Stock Advisor has the advantage of being in operation for a more extended period. Again, since the score is an average of individual stocks, it doesn’t mean all Stock Advisor stocks performed better than Rule Breakers stocks.
4. The personal touch
Both platforms are run by David, Tom, and a couple of other analysts. However, there is a subtle difference, especially in the delivery of advice and recommendation.
Rule Breakers is heavy on methodology and data. Stock Advisor gives you both and a bit more personal touch from the founders. Also, being the flagship product of Motley Fool, more attention is given to Stock Advisor to perform well.
Don’t get me wrong. Overall, both services receive excellent attention from Motley Tool’s management.
Are Stock Advisor and Rule Breakers worth your money?
To answer this question, we need to look at two factors, cost and value. Cost-wise, you can argue that the two are affordable, given how expensive investment research platforms can get. Of course, there are free tools out there, but how do they measure up to the two? Cheap doesn’t always translate to value.
So, what value do you get from the Rule Breakers? Much has been covered. But, to summarize it all, Rule Breakers helps you to identify winning stocks before the rest of the market discovers them.
And what of the Stock Advisor? It gives you insights to invest in stocks that will outperform the S&P 500, but with conservative returns.
Given the extensive investment information you get from both services, an annual cost of $99 is a steal.
Can I pick both?
Of course, Motley Fool allows you to subscribe to both. So, the appropriate question you should be asking is, should I pick both? In that case, it becomes a bit tricky.
However, a piece of advice, pick both services if you want to strike a balance between volatility and stability. But, if you want to lean on either side, pick the platform that reflects your investment style.
If I have to pick one, which must it be?
Are you an aggressive investor with an appetite for high-growth potential stocks? Are you an investor looking to get out of your investment comfort zone? Rule Breakers is the tool for you.
Are you an investor looking for fixed income or stability in dividends stocks? In that case, ditch the Rule Breakers and get the Stock Advisor. High growth stocks are more volatile and may not be your favorite menu.
Is Motley Fool genuine?
With the rise of the internet and social media, fake news has become the order of the day. And it’s not unusual to find genuine companies being labeled as scams. Now, to address the concern head-on, is Motley Fool a scam? Definitely not.
Today, Motley Fool has over 700,000 members. You can’t accumulate such numbers if you are offering substandard or non-existent services.
Additionally, one thing you will admire about Motley Fool is transparency. They will continuously display historical data even for stocks that didn’t measure up to their projections. Isn’t this self-defeating? Absolutely not.
It would be disingenuous to claim that your strategy is always winning, even in instances when it flops. Motley Fool admits that you can’t always be flawless. Openness upholds your reputation and promotes the credibility of your brand.
Both tools have a solid over 15 years’ experience in the market. Also, both services have survived the Great Recession. Therefore, you can’t question their ability to withstand trying times. While Motley Fool doesn’t get it right all the time, they have a long-term winning record that you can take advantage of.
Above all, conduct your investment analysis from other resources and compliment them with the Motley Fool tools. This way, you will increase the chances of making informed investment decisions to win the market.
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