So Long and Fool On

Welcome to the final edition of StockUp, the investing newsletter that will miss you all very much. -------------------------------------------------------------------------------------------------- [View this email in your browser]( Welcome to the final edition of StockUp, the investing newsletter that will miss you all very much. We’re folding our tent to make room for other fantastic, Fool-affiliated email newsletters like [Millennial Money]( and [The Daily Upside]( which are standing by to soothe your (doubtlessly) broken heart and keep your inbox well stocked with terrific financial news and advice. But before we go, we’ve got seven ideas that could help increase your odds of investing better than average; two key ingredients that could mean the market’s cooking up a crash; and one last pearl of wisdom from our main man Warren Buffett. Thanks immensely to all of our loyal readers, and Fool on! — Nathan Alderman, StockUp Editor NEVER SETTLE 7 Secrets to Strive for Better-Than-Average Investing --------------------------------------------------------------- Sure, you could be average. Average is fine. It’s okay. But why accept average investing returns, says Fool Robin Hartill, CFP, when you could do even better? She’s assembled seven simple secrets to help you achieve that goal, and we’ve got the first four here to get you started. - If you can, automatically invest when the market drops. Keep a little spare cash handy, and be ready to deploy it whenever the stock market plunges by a particular percentage. S&P down by, say, 20%? Put that surplus savings into stocks. You might miss out on the market’s short-term trough, but in the long run, you’ll be glad you bought in when stocks got cheap. - Try to incorporate index funds. They’re inexpensive, hassle-free, and they can give your portfolio a solid foundation from which to branch out to riskier opportunities. - Attempt to buy stocks you know and understand well. When you’re looking for individual stocks to buy into, choose companies in which you have some level of expertise. If you grasp how the business works and how it makes money, you’ll be more likely to choose wisely. - Consider seeking out small caps. Provided they’re backed by solid, well-run companies, stocks with tinier market caps often offer the potential, at least, for bigger returns than their blue chip brethren. Look for increasing revenue, a competitive edge that rivals can’t overcome, and customers who love what the company’s making or doing. Discover three more ways to aim for better than just OK when you [read the rest](. --------------------------------------------------------------- Already subscribed to a premium service? [Click here]( to view your subscriptions. Not a member yet? [Click here]( to sign up! --------------------------------------------------------------- JARGON DECODER Pop Goes the Market They don’t call it “Wall Street” for nothing; the big banks there build bigger barriers of baffling terminology to keep regular Fools like you intimidated, underconfident, and ready to fork over your cash to a broker. Each week, Jargon Decoder translates one of those worrisome words or phrases into plain English, helping you get a leg up on the Wall Street Wise. This week’s term: bubble.When the market’s value inflates rapidly, but those gains seem fragile and liable to evaporate at any moment, we say that the market’s in a bubble. Bubbles happen when investors get [a wee bit too excited](. They start paying higher and higher prices for companies whose underlying value hasn’t changed. The companies aren’t selling more goods or services or bringing in more profits. They don’t face some great new market opportunity that could lead to future growth. They’re just chugging along, same as always. But investors start to believe -- usually without evidence -- that somehow, someway, those companies will be worth a lot more in the future. They pay up for fear of missing out. Think of it like voluntarily paying $50 for a Big Mac because you’re just that thrilled about the prospect of eating it. Individual stocks’ prices rise all the time, and a sharp uptick in one company’s gains doesn’t necessarily mean it’s heading for a collapse. But when every stock in a sector, or in the market, surges higher, no matter what the companies behind them are or aren’t doing, the market’s probably in a bubble. And when reality catches up with investors, and the companies fail to grow the way their stocks have, the bubble pops, prices plunge, and a lot of people lose a lot of money. Learn more about how to spot bubbles -- and protect your portfolio against them -- with our handy explainer on [stock market bubbles](. --------------------------------------------------------------- JUST ADD INVESTORS Is the Market Cooking Up a Crash? It’s been just over a year since the market bottomed out amid the initial panic over the COVID-19 pandemic. Since then, returns have resumed rocketing higher. But Fool Sean Williams, eternabear that he is, wants to remind you that the good times may not last forever. He’s spotted two ingredients that, given enough time to simmer, tend to produce a piping hot market crash: - A steep premium valuation for the S&P. The higher the market gets priced relative to its fundamentals, the more likely it is to come crashing down. The Shiller P/E ratio, named for economist Robert Shiller, measures the market’s current price against the average of its earnings over the past 10 years. Right now, it hovers close to 36 -- more than double its 150-year average, and the second-highest peak it’s ever reached. And the last four times this metric topped 30 and stayed there for a while, the market ended up dropping by anywhere from 20% to 89%. - Everyday investors buying stocks with borrowed money. Small investors seem to be trying to make big bets on the market. A lot of them -- 43% per a September 2020 poll -- seem to be doing so with other people’s money, whether via margin (borrowing money to invest, with the promise to pay it back later), options (paying a little bit now for the right to buy or sell stocks at a given price later), or both. Both these methods have their uses, but they also increase risk and volatility. And if investors’ borrowed-money bets go bust, they may well magnify the market’s misery. Lest you think we’re going all doomsayer on you, remember that market crashes don't always have to be bad -- especially in the long term. (A possible crashitunity!) Learn how you might be able to turn trouble into treasure when you [read the rest](. --------------------------------------------------------------- ALEXA, TURN OFF THE LIGHTS [Smart Speaker] Not sure what to ask your smart speaker? Keep up with what's happening in the market by asking your Amazon Alexa or Google Home to "Play Motley Fool podcasts." --------------------------------------------------------------- O SAY CAN YOU SEE 1 Thing Warren Buffett Says You Should Never Do “Never bet against America.” So says Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) bigwig and superinvestor Warren Buffett in his latest letter to shareholders. Sure, the coronavirus has kicked us around. But as Fool David Jagielski reports, Buffett believes down to his bones that the U.S. will always bounce back. He argues that the United States remains the world’s greatest “incubator for unleashing potential.” And he’s been investing long enough to amass plenty of evidence to support that theory, too. Buffett’s not saying that every single U.S.-based stock will thrive -- he’s just urging investors not to abandon the U.S. wholesale in favor of international stocks, or to write off the country’s continuing ability to launch and grow great businesses. Discover more examples of the stocks Buffett believes in -- and how they’ve paid off for him over the years -- when you [read the rest](. --------------------------------------------------------------- SPARTA? NO, THIS IS ALEXANDRIA FEATURED PODCAST [Rule Breaker Investing]( "300" Hmmmm, how to celebrate our 300th consecutive weekly show…. Maybe a big party with cameos from past guests, with free punch and balloons for all? Nope, not this time. Instead, this: David’s audio-essay looks back and forward. How we make our money. How we treat each other. What we stand for. [Subscribe on iTunes]( --------------------------------------------------------------- THREE FOR THE ROAD Quick Reads - [Movie tickets, dirt cheap:]( Does a rock-bottom new price target for theater chain AMC Entertainment(NYSE: AMC) make sense? - [Point]( Fools disagree on whether this rock star analyst’s take on Tesla (NASDAQ: TSLA) seems [reality-based]( or [not](. - [Insert Law & Order “chung-chung” sound effect here:]( The Justice Department’s investigating alleged competition-crushing practices at Visa (NYSE: V). --------------------------------------------------------------- WE'LL ALWAYS HAVE INSTAGRAM Social Media Post of the Week [5 Smart Uses for this year's tax refund]( [See all our Instagram posts!]( Join the 1,300,000+ people who follow us! [Facebook]( [Twitter]( [Instagram]( [YouTube]( [LinkedIn]( We've worked fervently, fastidiously, and Foolishly to make sure all the facts and figures we publish in our emails are 100% accurate and up to date. Special thanks to eagle-eyed editor Karen Lanza. Returns as of March 24, 2020. The rest is silence. Have a question or topic you'd like to see covered in a future edition of Stock Up? Email us at stockup@fool.com. For questions about your Motley Fool account, subscriptions, or anything else related to The Motley Fool, please email membersupport@fool.com Our mailing address is: The Motley Fool | 2000 Duke St. | Alexandria, VA 22314 Want to change how you receive these emails? You can [update your preferences]( or [unsubscribe from this list](. This is a promotional message from The Motley Fool Copyright © 1995-2021 The Motley Fool. All rights reserved. [Legal Information.](