5 Top Stocks for February

Welcome to StockUp, the investing newsletter that solemnly vows never to refer to anything as a stonk. -------------------------------------------------------------------------------------------------- [View this email in your browser]( Welcome to StockUp, the investing newsletter that solemnly vows never to refer to anything as a “stonk.” This week, fall in love with five promising investments for Cupid’s favorite month. Plus, how to figure out whether you’re taking on more investing risk you can handle -- and four ways to reduce that risk by avoiding massive investing mistakes. — Nathan Alderman, StockUp Editor I CHOO-CHOO-CHOOSE YOU 5 Top Stocks for February --------------------------------------------------------------- Love is in the air -- or at least, tiny, winged, lethally armed babies are -- as our handpicked team of intrepid Fools offers up valentines to the dreamiest-looking investments they’ve fallen for in February. Their ideas for this short-but-sweet month include: - A compelling cannabis contender that’s spreading leafy green love across multiple states. - A gig-economy enabler playing matchmaker between freelancers and companies in need of their services. - A beautifully boring investment the market’s overlooked -- like the stock equivalent of all those movies where the shy nerd takes off their glasses, changes their hair, and is suddenly gorgeous. - A star-crossed stock that’s ready to give you your space. As in, it literally wants to take you to outer space. - The perfect stock for a cozy night in on the couch. No, not the one that goes with “… and chill,” but it’s pretty close! Swoon even harder over these stock market sweethearts 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 When Passing the Buck Goes Terribly Wrong 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: The Greater Fool Theory. When you stop worrying about an investment’s fundamentals because you’re confident that some other dummy will come along and buy it from you at a profit before it can collapse, you’re falling prey to this often painful fallacy. The Greater Fool Theory describes how otherwise sensible investors get swept up in market momentum without stopping to think about what they’re buying. It comes from the old proverb: “Who is the greater fool? The fool, or the fool who follows him?” It’s the Wall Street equivalent of Wile E. Coyote chasing the Road Runner off a cliff, taking 10 steps out onto empty air -- and then looking down just before the law of gravity kicks in. Think back to the years leading up to the housing market crash of 2008. Home prices kept rising and rising, and investors thought they’d never stop. Cheap but risky subprime and interest-only mortgages let people buy houses they couldn’t possibly afford, secure (or not) in their belief that the underlying prices of those houses would just keep rising, allowing purchasers to sell for more than they’d paid to buy. “House flipping” became a common buzzword, as people bought houses solely as investments, maybe did a little fix-up work, and then immediately sold them to someone else. Even as shrewder observers pointed out increasing piles of warning signs, folks just kept buying real estate at ever-higher prices -- right up until the bottom fell out of the market. Whether we’re talking about houses, stocks, or even [tulips]( this kind of frenzy has struck investors countless times. And it always ends up the same way. The price investors are willing to pay for an asset gets stretched so far from its underlying, fundamental value that the link just snaps. Prices come tumbling down. And woe to anyone left holding the bag when that happens. Be a great Fool, not the greater fool. Never buy into any investment solely because everyone else is doing so. Do your own research, and think hard about what that investment’s really worth, as opposed to the price tag the market has attached to it. Still curious? Read more about [The Greater Fool Theory](. --------------------------------------------------------------- DE-STRESS YOUR PORTFOLIO Are You Taking On More Investing Risk Than You Can Handle? At the Fool, we try to make investing fun, not frightening. Yes, you can always lose money in the stock market. But if that possibility’s keeping you up at night, you might want to dial back the level of danger in your investing. There’s no shame in seeking safer -- but still successful! -- investments for the sake of your peace of mind. Fool Diane Mtetwa’s found five simple questions that can help you figure out how much risk is right for you. - What’s your time horizon? Are you investing money that you’ll need pretty soon? Or do you have years and years left to ride out the market’s ups and downs? - How do you feel about volatility? If your stock surges or slumps suddenly, do you break out in a cold sweat, or just shrug and yawn? - How stable is your income? Can you afford to invest a little bit every month, or do you rely on sporadic windfalls to work your way toward wealth? - Do you have an emergency fund? If not, you should probably get one of those before you start investing! - What are you saving for? Are you playing around to see what happens? Or is some real-world goal riding on your investing success? To learn more about how to manage your investing risk, put down that giant bottle of antacids, do some deep breathing exercises, and then [read the rest](. --------------------------------------------------------------- DON'T CRY, ALEXA, HE'S STILL GOING TO BE EXECUTIVE CHAIRMAN [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." --------------------------------------------------------------- MAYBE JUST DON'T 4 Silly Investing Mistakes That Could Cost You We wouldn’t call ourselves The Motley Fool if we didn’t acknowledge that sometimes, people do dumb things. Especially with their money! Fool Maurie Backman has rounded up an anti-checklist of things you shouldn’t do in order to protect your hard-earned cash. - Selling your investments during a stock market crash. The Greater Fool Theory we mentioned above doesn’t just apply when prices are going up. If you sell just because everyone else is doing so, you’re practically guaranteeing a painful loss. Crashes happen. No investor can avoid them entirely. They punish good and bad stocks indiscriminately. But if you stay patient and hang on, sooner or later the market tends to recoup -- and surpass -- the previous gains it lost. - Investing in something you don’t understand. If you can’t explain how and why a company makes money, you’re a lot less likely to make money off it yourself. - Investing only when stocks are rising. If you knew that, with enough patience, you could buy something when it was cheap, why would you buy it when you absolutely knew it was expensive? There’s no harm in steadily investing through good markets and bad, but if you avoid buying into the market when it’s falling, you’re likely missing out on some great bargain opportunities. - Investing without regard to your tax bill. Why invest only in a regular, taxable brokerage account, when you could save yourself some cash by spreading your investments to a 401(k) at work (if you have one) or a traditional or Roth IRA as well? Learn more about these all-too-easy ways to bid your money au revoir when you [read the rest](. --------------------------------------------------------------- PET SOUNDS FEATURED PODCAST [Industry Focus, A Motley Fool Podcast]( BarkBoxing Up the Right Tree Join The Motley Fool’s Brian Feroldi and Emily Flippen as they talk about one of the newest pet plays on the market today: BarkBox. Can this soon-to-go-public pet subscription box business break out of the confines faced by other subscription businesses? [Subscribe on iTunes]( --------------------------------------------------------------- A LITTLE BIRD TOLD US Quick Reads - [The GameStop stock war, explained in tweets:]( How the market descended into madness, 280 characters (or less) at a time. - [File taxes early, or wait?]( Pros and cons of prompt payment vs. a last-minute lunge for the mailbox. - [How does Tesla make a profit?]( Not by selling cars, as it turns out! --------------------------------------------------------------- FATAL ATTRACTION MEETS WALL STREET Social Media Post of the Week [Some stocks are very fun to watch and very dangerous to get involved with.]( [See all our Tweets!]( Join the 1,300,000+ people who follow us! [Facebook]( [Twitter]( [Instagram]( [YouTube]( [LinkedIn]( We work fervently, fastidiously, and Foolishly to make sure all the facts and figures we publish in our emails are 100% accurate and up to date. Returns as of February 03, 2021. 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