Motley Fool: Spinning for dollars

Peloton Interactive (Nasdaq: PTON) enjoyed a huge tailwind from the pandemic in 2020. With gyms closed and social distancing in place, demand for in-home exercise equipment soared. Peloton’s combination of hardware and connected exercise services got a huge boost and enjoyed stellar growth, but now investors are focused on figuring out which stocks are likely to thrive in a post-pandemic world.

As gyms start to reopen, the company’s offerings could seem less essential. But while the exercise innovator’s growth might be uneven in the near term, relaxing social distancing probably won’t destroy its long-term opportunities.

Meanwhile, Peloton is recalling its treadmill because of safety concerns – a move that has depressed its shares. Future treadmills should be safer, and the company’s future still seems bright.

Peloton’s stock price is already factoring in an economic recovery and the treadmill recall, recently trading down 51% from its 52-week high. The brand still looks very strong; Peloton is a first mover in the connected exercise equipment space, and still has a lot of room for growth.

The stock isn’t low-risk by any stretch, but the business is executing at a high level. For investors with a buy-and-hold approach, Peloton could be a winner. (The Motley Fool owns shares of and has recommended Peloton Interactive.)

Ask the Fool

Q: What’s a “fiduciary” standard? – A.H., Burley, Idaho

A: A fiduciary standard requires people who might give you financial advice to act in your best interest, recommending or doing whatever will serve you best and avoiding any conflict of interest.

Some advisers (like broker-dealers) may simply abide by a “suitability” standard, recommending or doing whatever is suitable for their clients. What’s suitable, though, may not be what’s best – and it might earn them a sales commission that a better move for you might not. Indeed, among your options for suitable investments, a nonfiduciary adviser might recommend the least suitable one. (Of course, many nonfiduciary advisers are still ethical and may serve you well.)

Supreme Court Justice Benjamin Cardozo famously referred to the fiduciary standard by noting, “A trustee is held to something stricter than the morals of the marketplace.”

When you’re looking for financial advice, it’s smart to ensure that your adviser is held to the fiduciary standard, looking out for your best interest before his or her own. Registered Investment Advisers, or RIAs, and Certified Financial Planners, known as CFP, are generally held to the fiduciary standard.

Q: What’s an 8-K report? – L.C., Lexington, Kentucky

A: Publicly traded companies in the U.S. are required by the Securities and Exchange Commission to release financial reports every quarter. If certain notable things happen between those reports that may impact the company’s health or performance, then an 8-K, or “current report,” must be filed. An 8-K might report a completed merger or acquisition, a bankruptcy filing, a change in top leadership, layoffs or plant closures, among other things. You can look up SEC filings at SEC.gov.

My dumbest investment

My dumbest investment move was buying my house with a 15-year mortgage. – A.V., online

The Fool responds: That wasn’t necessarily a dumb move – both 15- and 30-year home loans have their advantages and disadvantages. You didn’t explain why you’re unhappy with your 15-year mortgage, but it’s likely that you don’t like the higher monthly payments, which can leave you with less money each month for saving, investing or spending on essentials and treats.

On the other hand, a shorter-term mortgage will let you pay off your home and build equity much more quickly, while paying a lot less in interest over the life of the loan. (A 15-year loan typically has a lower interest rate, too.)

Meanwhile, 30-year mortgages have lower monthly payments but higher interest rates, and you’ll pay a lot more in interest over the life of the loan.

A loan can help you qualify to buy a more costly home – but it’s generally better to buy a less expensive one so you have wiggle room if you lose a job or suffer some other financial setback.

Also note that it’s best to build up your credit score as much as you can before borrowing money, so that you’re offered better interest rates. Paying bills on time and paying down debts can help with that.