Motley Fool Review: Is Stock Advisor & Rule Breakers worth it in 2023?

Summary

First off, I want to make it clear that I do think the Motley Fool has done a great job.

They’ve created a platform investors love, they produce news at scale, have an army of writers and they have a good track record. 

However, like many investors, there are things about Motley Fool I’m not a fan of. 

But don’t worry. 

I’ll discuss everything. 

The good, the bad and the ugly. 

In this article, I’ll review their two most popular products to help investors make an accurate and informed decision on whether or not they should use Motley Fool as a stock-picking service. 

Let’s get into it 🚀

What is the Motley Fool?

As you might know, the Motley Fool is a popular finance and investing website. They’re best known for their stock recommendations newsletter and investing platform. 

And believe it or not, they’ve been around longer than I’ve been alive!

The company was founded in 1993 by brothers Tom and David Gardner. It’s now grown to become one of the most recognized sources of investment advice globally. 

Their advice covers asset classes like stocks, real estate, exchange-traded funds (ETFs), and cryptocurrency. 

Although it does get confusing. 

They have over 25 different membership types investors can subscribe to. 

Here’s a list of all the open services investors can access:

Overwhelming right?

Some of the prices I find hard to justify as well.

$13,999 per year for the “One” service seems excessive unless I’m investing hundreds of thousands or even millions of dollars.  

As a result, I’m only going to focus on the two I’ve tried and tested. 

They’re also the most popular. 

The first is the Motley Fool Stock Advisor and the second is Motley Fool Rule Breakers.

Motley Fool Stock Advisor Review

What is the Motley Fool Stock Advisor?

Motley Fool Stock Advisor is the most popular stock-picking service on the market. It’s Motley Fool’s flagship product and an investing newsletter that has been extensively reviewed.

According to the Motley Fool, over 500,000 investors currently use their premium services. 

But don’t be fooled (no pun intended). This doesn’t automatically mean it’s perfect. 

We’ll get to why soon.

But as a premium subscriber, you can expect to receive two monthly stock recommendations.

On top of this, your membership grants you access to features like:

• The list of ten top-ranked stocks in Stock Advisor
• Buy and sell notices (not clear though on when the alerts are sent)
• Analysis and updates for each recommended stock
• Investment articles published on the Motley Fool blog (these are hit-and-miss)
• The Motley Fool community

Who is Motley Fool Stock Advisor best suited for?

In my opinion, the Motley Fool Stock Advisor is best suited for beginner investors who will commit to their picks for medium to long-term growth and appreciate well-researched recommendations. 

Especially those new to investing since they can benefit from the educational content, community discussions, and sell notices. 

If you don’t have a preference for the type of stocks you want to invest in then the Stock Advisor membership is your best bet. Their picks are market agnostic so you can expect recommendations on any company that looks promising provided the due diligence checkout. 

P.S. I would also suggest checking out Ticker Nerd first. You’ll find a similar membership option although it is cheaper, easier to use, and in our opinion more valuable. 

Motley Fool Stock Advisor Performance

According to the Motley Fool, the Stock Advisor has returned 466.4% since inception vs the S&P 500 which has returned 125.3% over the same period. On this particular screenshot, they say the S&P, not the S&P500. However, on their landing page, they mention the S&P 500. So we’ll go with the S&P 500. 

I’m not here to downplay the returns, they are good. 

But keep in mind the Motley Fool has been doing this for over 20 years. They started the Stock Advisor membership in February 2002. 

I personally think this makes it slightly less impressive. 

All you need to do is stay away from junk stocks, penny stocks, fraudulent companies, and other really obvious terrible investments. Not to mention, the bull run after the dot com crash has been fantastic.

In our best stock picking services article, we took a look at their losing stock picks over the last five years and there were many. 

The reason we mentioned this is to act as a reminder that there’s no such thing as a perfect stock-picking service. 

Despite this, Stock Advisor’s track record is still impressive and these losses don’t outweigh the wins. Here’s what the cumulative growth of $10,000 invested into the Stock Advisor picks would look like over time. 

How much does The Motley Fool Stock Advisor cost?

Motley Fool Stock Advisor has two pricing options:

• $39 paid monthly*
• $99 paid annually for the first year**, then $199 each year after that

*No money-back guarantee.

**This price is only available to new members.

At the time of writing Stock Advisor does not offer a free trial.

My honest verdict on Stock Advisor

I think the Motley Fool Stock Advisor membership is a great option for beginner investors and industry-agnostic investors. 

This service is a mixed bag.

You’ll get access to some great stocks at a great time but it’s hard to know what sort of stocks to expect. The only examples they mention are Disney, Netflix, and Amazon which are all wildly successful companies. 

I find the analysis on each stop to be rather thin. The reports aren’t that detailed so I was still confused as to why they chose the stock in the first place.

But there’s one thing I really don’t like. 

Their principles. 

Here are the first two.

1. Buy 25 or more companies recommended by The Motley Fool over time
2. Hold those recommended stocks for 5 years or more

As an investor, I find it incredibly difficult to buy 25 stocks and hold them all for at least 5 years. It sounds good in theory but there’s a good chance only a tiny percentage of investors will actually do this. It’s simply not practical so I don't think it's a good principle.

Motley Fool Rule Breakers Review

What is Motley Fool Rule Breakers

Similar to Stock Advisor, the Motley Fool Rule Breakers membership offers two stock recommendations per month. However, these recommendations are growth stocks only. 

A growth stock is defined as a company that can significantly outperform the market. It usually has positive cash flow and revenues and is expected to continue growing. 

In some ways, these are better companies to invest in, however, they can be overpriced so finding a growth stock at a healthy price is difficult. 

Your Rule Breakers membership grants you access to features like:

• Two growth stock recommendations per month (similar to Ticker Nerd)
• The list of ten top-ranked stocks in Rule Breakers
• Buy and sell notices (not clear though on when the alerts are sent)
• Analysis and updates for each recommended stock
• Investment articles published on the Motley Fool blog (these are hit-and-miss)
• The Motley Fool community

​​Who is Motley Fool Rule Breakers best suited for?

If you’re an impatient investor that wants to see gains sooner than 5 years then you might be interested in Rule Breakers. 

After all, it’s called Rule Breakers since it clearly goes against the typical Motley Fool principles which suggests holding 25 stocks for at least 5 years. 

Most investors are looking to make a profit relatively quickly. If you’re impatient and you want more exposure to growth stocks then I would recommend The Motley Fool Rule Breakers service.  

Motley Fool Rule Breakers Performance

According to Motley Fool, the Rule Breakers' performance has beaten the S&P 500. Since its inception in 2004, it’s returned 222.5% compared to the S&P 500 which returned 105.9%. It’s worth noting this isn’t as good as the Stock Advisor membership. 

Below you can see the cumulative growth of $10,000 invested into the Rule Breakers stock picks against the S&P 500. 

How much does The Motley Fool Rule Breaker cost?

Unlike Stock Advisor, Rule Breakers only has a yearly membership which costs $299. New members can subscribe for $99 for the first year. 

My honest verdict on Rule Breakers

Since I have a higher risk appetite, I prefer this service. 

Similar to Ticker Nerd, this membership focuses on high-growth stocks that you should keep in your portfolio for at least 3-5 years. 

Whilst the returns haven’t been as strong as the Stock Advisor membership I still prefer to take my chances with faster-growing stocks that can outperform the market. 

If you’re like me and you don’t want to invest in over 20 stocks and wait at least 5 years then I suggest looking into the Rule Breakers subscription. 

Other than a different stock pick each month, the rest of the membership is pretty much the same.

Related article: Morningstar vs Motley Fool

What do the reviews say about the Motley Fool?

The Motley Fool currently has a 3.6/5 rating on Trust Pilot. Although, it’s hard to know how accurate these reviews are.

It’s also not a true reflection of the service. 

Since no stock picking service can guarantee results there are always going to be disgruntled customers who are upset the recommendations didn’t make them money. 

And this is a fair reason to be angry, although, it’s the nature of investing in the stock market. It’s almost impossible to predict the price movements of a stock. 

The sentiment on Reddit isn’t too positive either. Many Redditors agree with the Motley Fool returning great numbers but some don’t think it’s worth it.

Negative Reddit comments:

 Positive Reddit comments:

It’s also a little-known fact that the Motley Fool also operates a hedge fund that invests in the stocks the service recommends. Due to the large following of the service, it is possible that it can manipulate trading activity by promoting holdings owned by the Motley Fool’s hedge fund. A Reddit user did a deep dive into this with some fascinating findings.

As always, do your own research and only invest money you’re willing to lose. 

Motley Fool alternatives

If you’re reading this review because you’re on the fence about choosing an investment newsletter, consider these alternatives. We’ve reviewed the best stock-picking services along with the best investment newsletters and these are the ones that have come out on top. 

1. Ticker Nerd is best for investors who want to generate long-term wealth.
2. Mindful Trader is best for experienced investors who want to day trade stocks.
3. Seeking Alpha PRO is best for investors who love analyzing financial data.
4. Morningstar Investor is best for investors who prefer reading detailed stock reports.
5. Alpha Picks by Seeking Alpha is best for investors looking for data-driven stock picks.
6. Tim’s Alerts is best for day traders who are looking for daily recommendations.
7. Zacks Premium is best for do-it-yourself investors.

Frequently asked questions