Motley Fool Rule Breakers is a financial analysis newsletter published by Motley Fool and the Fool.com team.
Motley Fool Rule Breakers is priced at $99 per year, and it’s one of the best-known investment analysis publications sold online today.
Is Motley Fool Rule Breakers worth the price? Does it provide good, actionable investment ideas? Find out everything you need to know about Motley Fool Rule Breakers today in our review.
What is Motley Fool Rule Breakers?
Rule Breaks is a financial analysis service from Motley Fool (Fool.com). You subscribe to the newsletter for $99 per year, then get news, information, and analysis from across the stock market.
Motley Fool claims their Rule Breakers newsletter offers “stock advice that beats the market.” The goal is to equip investors with the knowledge they need to earn better-than-average returns from the market.
Here’s how Motley Fool introduces Rule Breakers at its official website:
“Discover market-beating growth stocks, learn which businesses are poised to be tomorrow's stock market leaders, and see which companies are the best stocks to invest in today.”
Rule Breakers is led by David Gardner and the Motley Fool team.
Together, the team helps thousands of ordinary investors save time while earning higher returns. They recommend specific stocks that have generated impressive, market-beating returns since the launch of Rule Breakers in 2004.
What Will You Learn with Motley Fool’s Rule Breakers?
Motley Fool’s Rule Breakers subscribers receive a list of stocks. Motley Fool believes these stocks will perform strongly in the near future. Periodically, Motley Fool will update its Rule Breakers model portfolio. They recommend selling certain stocks at certain prices or buying new stocks as they emerge.
Each issue of Rule Breakers might have 20 to 30 stocks in its model portfolio. You can invest your money in these stocks to follow the returns of the model portfolio. Or, you can modify the portfolio based on your own investment goals.
Each issue of Rule Breakers recommends at least two specific stocks. Issues also feature a list of “starter stocks.”
Rule Breakers specifically caters to high-growth investors, particularly those looking for growth stocks. If you want to buy a company’s stock at a discount price today, then earn huge returns as that stock grows, then Rule Breakers may be the right financial newsletter.
As a Rule Breakers subscriber, you receive different issues at different investment analysis depending on the time of week:
- Each Thursday, Rule Breakers update its model portfolio, then sends investors an email with their new recommendations (“Starter Stocks”)
- On the second Thursday of every month, Rule Breakers releases one new stock recommendation (“New Recommendations”)
- On the third Thursday of every month, Rule Breakers releases five stocks they recommend buying now (called the “5 Best Buys Now”)
- On the fourth Thursday of every month, Rule Breakers releases a new stock recommendation
- Subscribers receive two issues a month with brand new stock recommendations
Some of the recommended stocks have been discussed in previous issues of Rule Breakers. Motley Fool’s team is still bullish on these stocks, so they continue to recommend them. Other emails specifically mention a new stock – like a new entry into the space.
How Much Money Can You Make with Rule Breakers?
Like other investment idea newsletters, Rule Breakers is careful to make realistic claims about earning returns. The newsletter doesn’t claim to help you get rich quick, nor does the newsletter advertise five-digit returns.
While other investment gurus handpick their best stocks and make claims of easy money, Motley Fool takes a different approach. The company simply posts its year-to-year performance compared to the S&P 500:
The numbers speak for themselves. Over the past 15 years, Rule Breakers has earned better average returns than the S&P 500. Someone who invested $10,000 into a Rule Breakers portfolio in 2005 would have nearly $100,000 today. Someone who invested $10,000 into the S&P 500 would have over $40,000 in that same time period. Over a lengthy time period, Motley Fool’s Rule Breakers has legitimately outperformed the S&P 500.
Motley Fool also shares some of its best stock picks. Motley Fool calls them “fortune-building stock picks.” Motley Fool alerted investors to these rising companies before the rest of the market discovered them. By investing early, investors scooped up significant shares at a discount price. Today, those shares are worth a fortune, as the companies are some of the largest in the space.
Some of Motley Fool’s notable fortune-building stock picks include:
- Tesla
- Mercado Libre
- Baidu
- Under Armour
Like other investment analysis services, Rule Breakers doesn’t list specific returns or promise certain gains. While low-quality investment newsletters make dramatic claims about doubling or tripling your money with zero risk or effort, Motley Fool lets its track record speak for itself.
How Does Motley Fool Pick Stocks that Beat Average Returns?
Beating the average returns of the S&P 500 is no joke. Some of the world’s best hedge funds struggle to beat the S&P 500 consistently year after year.
So what’s the secret behind Motley Fool’s stock picks? What does the company look for before investing in a company?
Motley Fool’s team picks stocks based on six investment principles:
Motley Fool looks for the biggest companies, movers, and players in emerging industries.
Motley Fool looks for companies that have a sustainable advantage gained through business momentum, effective patents, strong leadership, or bad competitors.
The team identifies companies with a strong record of price appreciation in recent markets, as they believe the best growth stocks need momentum to continue rising. Rising companies are better able to post record earnings, maintain strong cash flow, and continue attracting new investors.
Motley Fool emphasizes companies with smart management teams and good executives backed by smart capital.
The team aims for companies with strong consumer appeal, like companies that can grow a solid brand image, reinforce themselves in the minds of customers, and deliver extraordinary growth.
Motley Fool researchers sectors to determine which companies are grossly overvalued in a particular space. The team ignores these companies, picking under-valued competitors instead. While most of the market jumps on the over-valued stock, Motley Fool aims to pick the long-term winner.
Tesla and Baidu, two of Motley Fool’s recent fortune-building stock picks, both meet the above criteria. They’ve also been two of the best picks from Motley Fool in recent years.
What’s Included with Motley Fool Rule Breakers?
As a Motley Fool Rule Breakers subscribe, you get access to the Rule Breakers dashboard. It’s a user-friendly, professionally-designed dashboard updated numerous times over the years.
At a glance, you can view stocks in the Rule Breakers portfolio, recent Best Buy stock picks, the top daily movers, and other information.
The dashboard is updated every Thursday with new stock recommendations.
You can click on any specific stock to learn more about it. You get detailed analysis of that stock, including the fundamentals supporting that stock and its ratios and charts.
Users can customize their Rule Breakers dashboard however they like. You can pin or favorite certain stocks or choose what you want to do with a stock, for example. If you like one recommended stock but not another, for example, then you can adjust it within the platform.
If you add a stock to your favorites list, then you receive alerts whenever:
- There’s a new buy alert for that stock
- It’s time to sell that stock
- There are large price fluctuations within that stock
Generally, investors add any stocks in their portfolio to their favorites list, then track the performance over time.
Rule Breakers subscribers also get access to the Rule Breakers Community, including discussion boards where you can interact with all premium Motley Fool subscribers.
There’s also a Research section featuring reports, articles, and analysis from across multiple markets.
The “Fool Effect” With Stocks
Motley Fool’s Rule Breakers is one of the industry’s best-known financial newsletters. The subscription service has helped investors manage portfolios for over a decade. It’s unclear specifically how many subscribers there are, but Rule Breakers has enough followers to create a “Fool Effect” with every stock recommendation.
When Motley Fool recommends a new stock, it’s important to act quickly. Typically, the stock immediately rises by 2% to 5% based on the news. Depending on the market cap, this jump could be higher or lower.
Downsides of Rule Breakers
Up to this point, Rule Breakers seems like the best financial analysis service in the world. We’ve only talked about the advantages of Rule Breakers.
However, Rule Breakers does have some downsides.
Like any stock recommendation service, Rule Breakers has recommended some bad picks over the years. The company can’t pick winners every time, and some picks perform better or worse than others.
Out of the 20 to 30 stocks recommended by Rule Breakers every year, approximately 4 to 7 stocks tend to be losers. If you only invested in these stocks, then you would lose money on Rule Breakers’ recommendations.
The other major ‘downside’ of Rule Breakers is that past performance does not guarantee future returns. Rule Breakers has a 15-year track record of matching or exceeding the S&P 500 – but even the most successful money managers have losing streaks. It’s possible Motley Fool’s Rule Breakers picks will have worse performance over the next 15 years.
Motley Fool Rule Breaker Investing Podcast
Motley Fool’s Rule Breakers brand has become large enough to warrant its own podcast.
The Motley Fool Rule Breaker Investing podcast features David Gardner, co-founder of Motley Fool. He’s the man responsible for many of the Rule Breakers stock picks.
Here’s how Motley Fool describes its Rule Breaker Investing podcast:
“Each week David shares his insights into today's most innovative and disruptive publicly traded companies — and how to profit from them by following his signature “Rule Breaker Investing” principles.”
The podcast is free for anyone – including people who don’t subscribe to Rule Breakers. You can listen to the podcast wherever you listen to podcasts.
As of late 2020, there are 300 episodes of the podcast. New episodes are released every Wednesday, with each episode ranging from 45m to 1h15m.
Motley Fool Rule Breakers Versus Motley Fool Stock Advisor
Motley Fool has two main subscription services, including Rule Breakers and Stock Advisor. Which one is the right choice for you?
Users get a similar experience with both services. The platforms look nearly identical. However, there are crucial differences between Motley Fool’s Rule Breakers and Stock Advisor subscription services, including:
Rule Breakers has better average returns over the past 3 years compared to Stock Advisors. This is expected because Rule Breakers focuses on growth stocks poised for big returns. When looking at a certain period with huge returns (say, with Tesla in 2020), Rule Breakers’ returns will look particularly impressive.
Stock Advisor focuses more on better-known stocks and safer, long-term, gradual investment returns. If you want to build a powerful portfolio over a long period of time, then Stock Advisor may be the better choice.
Rule Breakers is focused more on medium-risk, high-reward growth stocks, and volatile markets. The team aims for companies with high growth potential, investing in those companies just before they get big.
Both Stock Advisor and Rule Breakers offer a similar number of stock recommendations each month (approximately 12 picks).
Stock Advisor’s analysis comes from two teams, including co-founders Tom and David Gardner. Rule Breakers is led primarily by David Gardner, the main advisor of the service.
Motley Fool Rule Breakers Pricing
Motley Fool Rule Breakers is priced at $99 per year or $39 per month:
- Annual Subscription: $99 per year
- Monthly Subscription: $39 per month
Your subscription will automatically renew at $99 per year, every year until you cancel. You can cancel your subscription at any time.
Motley Fool Rule Breakers Refund Policy
Motley Fool has a 30-day refund policy for first-time subscribers. If you subscribed to Rule Breakers for the first time and did not like the investment advice, then you can request a refund and receive your money back.
However, if you repeatedly sign up for Rule Breakers to get stock picks, then unsubscribe and request a refund, then Motley Fool may deny your request.
About Motley Fool
Motley Fool is a financial advisory service founded all the way back in 1993 by brothers David Gardner and Tom Gardner. Today, Motley Fool is one of the best-known names in the online investment space, offering a range of products and services while generating millions of hits every month.
The brothers launched Motley Fool’s Rule Breakers in 2004.
Over the years, the Gardner brothers have co-authored several books, including The Motley Fool Investment Guide, You Have More Than You Think, Rule Breakers, Rule Makers, The Motley Fool Investment Guide for Teens, and the Million Dollar Portfolio.
Motley Fool also offers region-specific investment websites, including Fool.co.uk (for the United Kingdom), Fool.com.au (for Australia), and Fool.ca (for Canada)
The name of the company comes from Shakespeare’s As you Like It. Motley Fool is headquartered in Alexandria, Virginia, and the company employs 300 people worldwide.
You can contact Motley Fool via the following:
Email Form: https://www.fool.com/contact/customer-service/
Help Center: https://support.fool.com/hc/en-us
Final Word
Motley Fool’s Rule Breakers is one of the biggest and best-known newsletters in the investment analysis space.
There’s a reason Rule Breakers is popular: the investment service has had impressive returns over the past 15 years. Investors who have followed Rule Breakers’ investment recommendations have earned significantly better returns than the S&P 500 over that same period.
Unlike other financial companies and newsletter services we have reviewed, Motley Fool is legitimate, reputable, and trustworthy. The company doesn’t dazzle investors with claims of 10,000% returns, nor does the company lure you in with promises of easy money and get-rich-quick schemes.
For all of these reasons, Motley Fool’s Rule Breakers continues to be one of the best-known names in the investment analysis space today.
