Motley Fool: Investors should just do it

Nike (NYSE: NKE) stock slumped after its third-quarter earnings report, which featured weak revenue growth and disappointing projections.

The stock’s value has fallen in recent years as Nike faced challenges like competition from rivals, a sluggish economy in China, tepid demand for discretionary goods stateside and supply chain whiplash following earlier shortages.

It’s also stepping back from its direct-to-consumer strategy, recognizing the importance of the wholesale channel.

Long-term investors may still want to consider Nike, though. It seems to have overcome the supply chain issues, and demand – at least in the U.S. – should stabilize as fears of a recession recede.

For the stock to have a significant rebound, the company does need to strengthen its relationship with consumers and push back against rivals. Nike just announced a new lineup of footwear and apparel products that it believes will kick off a “multiyear cycle of new innovation.”

The Olympics should also give Nike an opportunity to reconnect with customers, and the company is planning its biggest Olympics marketing campaign ever.

With its valuation now a little more reasonable, Nike’s downside risk looks limited – and it’s a mistake to bet against this category leader. (The Motley Fool owns shares of and has recommended Nike stock and options.)

Ask the Fool

Q. What does “liquidity” refer to in the financial world? – A.B., Detroit

A. There are a few meanings.

The most common is how easily we can cash out of various investments: Cash, for example, is very liquid, but real estate generally isn’t (as it can take weeks or months to sell a property).

For a company, liquidity often refers to its cash plus assets that can be quickly converted into cash – such as money market, stock and bond investments – minus its short-term debt.

The term “accounting liquidity” reflects how easily a person or company can pay off debts as they come due with liquid assets.

Then there’s “market liquidity,” referring to how easily assets can be sold at prices close to their current market value or fair value.

If a stock has billions of shares that investors own and can trade, with tens of millions of shares trading hands regularly, it’s probably fairly liquid.

If a piece of art or a home needs to be sold quickly, that will likely either take a long time or result in a sale at a discounted price, making it a less liquid asset.

Q. Where can I find the best interest rates for CDs? – H.G., Greenville, North Carolina

A. Our sister site, TheAscent.com, offers updated lists of the best interest rates for certificates of deposit (CDs), savings accounts and more.

It recently listed interest rates of 5.25% for a one-year CD and 4.3% for a five-year CD – among many others.

If you’re in the market for CDs, you can invest in them online via just about any reputable bank, even those based far away. So shop around for the best rates.

My Dumbest Investment

My most regrettable investment happened when I invested in the now-liquidated iShares MSCI Russia exchange-traded fund (ETF).

I bought into it just as Russia was starting to ramp up its war effort in Ukraine but hadn’t invaded yet.

I believed then that the war would be short-lived, and that the MSCI Russia ETF was an exceptional buy; I was anticipating a 30%-plus bounce when the conflict ended.

Well, now my $3,000 investment is probably worth a few cents per share – if there’s ever a payout.

I’ve had bad timing before, but this was a case where I lost 100% of my investment. I let greed get in the way of doing the right thing, and my portfolio penalized me accordingly. – B., online

The Fool responds: Greed happens.

When you’re bullish on a particular region’s or industry’s investment potential, it can be a good move to invest in it via an ETF. (Remember that ETFs are mutual fund-like securities that trade like stocks.)

Doing so will spread your dollars across a range of stocks or bonds, giving you some diversification.

But some investments we’re bullish on can do us wrong.

With the Russia-Ukraine situation, there were a lot of unknowns, with very different possible outcomes. It’s generally best to invest when you have high confidence in good results.