In this Rule Breaker Investing podcast, Motley Fool co-founder David Gardner picks another set of five stocks he recommends putting in your portfolio, this time with the expectation that they'll be outperforming three or more years from now.

His theme du jour: Companies that offer you and instead of or, because David is not a fan of the trade-off mentality. In his view, most of the time, you can have your cake and eat it, too. And these five companies exemplify that philosophy.

No. 2 on his list is CBOE Global Markets (NASDAQ:CBOE), which owns the Chicago Board Options Exchange as well as the exchange operator BATS Global Markets.

A full transcript follows the video.

This was recorded on Nov. 22, 2017.

David Gardner: Stock No. 2. This one comes from a slightly different framework. We're not looking at the company itself to avoid the trade-off mentality as we just did with Amazon. We looked at the company there first. For No. 2, I want to step outside 10,000 feet higher and look down at the stock market for a second, and then we're going to pick our stock.

A lot of people say that you have to balance risk vs. reward. The idea is very traditional, and I understand the very conventional thinking behind this. Sometimes, conventional thinking is good, and sometimes, it's conventional wisdom that makes fools want to rush in.

The conventional thinking goes, the higher the risk, the higher the reward. You can either go for a low-risk and then probably low-reward stock, or maybe a high-risk, high-reward stock. And you kind of feel like the person back on that seesaw with your work-life balance trying to figure out whether you should go with the low-risk, low-reward one or the high-risk, high-reward one.

But I think one thing we've demonstrated at Motley Fool Rule Breakers and at Motley Fool Supernova and Stock Advisor -- and that I've been trying to prove out over the last 15 years, or so, with our stock picking -- is that you can pick a low-risk stock that is a strong market outperformer.

By the way, the opposite exists, as well. You can definitely find stocks out there -- this is easy to see -- that are very high risk and that are very poor market performers. Poor typical prospects. I would say penny stocks come quickly to mind when I think of an entire genre of failed investments.

Whether it was Apple (NASDAQ:AAPL), or a company like Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG), or MercadoLibre -- all companies that I've mentioned a lot -- these are all very low-risk companies if you're familiar with our risk-rating framework, which I've certainly spent three past podcasts putting together for you. You can go back and listen through our full 25-point risk system, the risk-rating system that we apply to the stock picks that we make.

And every one of those companies I just mentioned -- Apple, Alphabet, and MercadoLibre -- score around a four, five, or six. And on a zero to 25 system -- where a lower risk rating is lower, risk four, five, or six is very low -- those have been substantial market outperformers.

Don't start getting yourself in that little box that you can't find safer companies that are dramatic market outperformers. You can, so stock No. 2 -- this is one that's not nearly as well known and not nearly as big, but I like this one a lot -- let's go with CBOE Global Markets. CBOE (Chicago Board of Exchange) is a company that trades options and futures. It's CBOE on the Nasdaq. This has been a successful stock pick for us the last few years in Motley Fool Stock Advisor, and it has a risk rating of just six. I like it a lot!

And not only that, but if you've ever heard of BATS Global -- sometimes I see BATS, perhaps ironically or not ironically, at all, advertised at baseball games -- BATS is an equities exchange. It's kind of an internet-based way to trade stocks and CBOE Global Markets has bought BATS out, so now CBOE allows you to trade options, futures, and equities.

This is one of those businesses that's really hard to compete against. They're going to be around a long time, and last I checked, trading volume typically rises over time. You have a company that's a leader within its markets that will be very hard to displace doing relevant things in this world. CBOE -- lower risk and a market beater.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. David Gardner owns shares of Alphabet (A shares), Alphabet (C shares), AMZN, Apple, and MercadoLibre. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), AMZN, Apple, and MercadoLibre. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool recommends Cboe Global Markets. The Motley Fool has a disclosure policy.