Motley Fool Named Top 3 Investment Newsletters

The Hulbert Financial Digest recently named the Motley Fool Inside Value, Rule Breakers, and Stock Advisor newsletters as the best performing investment newsletters out of the more than 200 newsletters that it tracks. The Wall Street Journal did a full write-up (subscription required), but those services took the top 3 spots based on average annual returns over the last five years of 18%, 16%, and 15% respectively. The overall market returned only 7.2% during that same time (in this study the Wilshire 5000 was the benchmark).

The article makes the point that all 3 services have different investing approaches (with very few overlapping stock selections), but the common theme among them is a focus on investing in quality companies and a long term, buy and hold approach.

The fact that Motley Fool took the top 3 spots is really very impressive, and a testament to their approach. Congratulations to them and the team on such great performance. Not all of their newsletters have performed as well (or even earned a positive return), but Hulbert points out that 5 of the 6 Motley Fool investment newsletters that he currently tracks have beaten the Wilshire 5000. It should be pointed out however, that Motley Fool had several model portfolios in the 90’s that underperformed that benchmark according to Hulbert, so there is a little bit of survivorship bias at play there.

To get monthly updates on the performance of all MF services, subscribe to my site and check out my performance posts here.

And to get more detailed reviews of the services mentioned here, check out my dedicated pages for Stock Advisor and Rule Breakers.

{ 5 comments… add one }
  • June December 20, 2013, 12:48 pm

    Love your writeups!

    • Kevin December 20, 2013, 1:53 pm

      Thanks so much, June! Glad you find them helpful.

  • Andy April 14, 2014, 1:37 am

    Hi Kevin,

    Good work – read most of your postings, and find this site very interesting. I have been evaluating Motley Fool for about 6 months now, and am having mixed results. I’ve subscribed to both MDP and Supernova, and intend to cancel one or other within the first year. Or perhaps both…

    Are you able to explain why their real money portfolios (MDP, Supernova and One) perform so much worse than Stock Advisor?

    If I had bought $1000 in ever SA recommendation, would I have achieved the same results that they are claiming?

    Surely Stock Advisor (or even Rule Breakers for that matter) would provide a better result than any of their more expensive services?

    Thanks for sharing your thoughts! Andy

    • Kevin April 15, 2014, 9:11 pm

      Thanks for the question, Andy. There are a couple of reasons for the difference in performance. MDP is a real money portfolio and it initially opened in late 2007 just as the markets started to tank – a tough time to kick off a portfolio. In terms of Supernova, I think the main reason is time. RB and SA were founded in 2004 and 2002 respectively versus Supernova just 2 years ago. SA and RB style investing really starts to outperform the longer you hold the stocks. In their case they have had a number of astronomically successful stocks that they have held on through the years which contribute a lot of their overall gains. SN is still young and have had good success so far but it remains to be seen if it holds up.

      Yes if you had bought each and every stock in equal amounts at equal times and prices (and only sold when they sold) you would have had the same performance. But even skipping one or two of those picks could significantly lower results. Also keep in mind their stocks can be very volatile so depending on when/if you need to sell investments to raise cash, the stocks could have lost significant value. And holding for the long time horizon is key.

  • Lori September 18, 2014, 4:30 pm

    I look forward to reading your new posts!


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