Login | February 03, 2026
What If a Brokerage Fails?
Motley Fool
Published: February 3, 2026
Q. What happens if my brokerage goes out of business? -- T.D., Canton, Ohio
A. Most brokerages are protected by the Securities Investor Protection Corporation (SIPC), which insures accounts for up to $500,000 in securities and cash, including up to $250,000 in cash. (Many also carry additional insurance.) The SIPC protects against your brokerage failing -- though not against your investments simply falling in value, or companies you hold shares in declaring bankruptcy. Ensure your brokerage is SIPC-protected by checking the SIPC's list of members, or by calling it and asking.
Q. Is it better to invest money for my kids in stocks or in savings bonds? -- C.B., Butler, Pennsylvania
A. If you plan to withdraw the money within a few years, don't keep it in stocks, as the stock market can pull back at any time. Keep short-term money in relatively low-risk investments such as savings bonds, money market accounts or certificates of deposit (CDs). They tend to offer modest returns, but they'll also minimize losses. (Note: Savings bonds cannot be cashed in before one year has passed, and you'll lose three months' interest if you cash in before the five-year mark.)
If the money will be invested for at least five years, consider stocks, as they usually outperform savings bonds and CDs over long periods. A simple, low-fee index fund, such as one that tracks the S&P 500, can spread your money across hundreds of companies.
You might also invest in companies your kids know, such as Apple, Costco or Starbucks. Follow the progress of such companies together, and you might spark an interest in business and investing.
Fool's School
Walmart's Balance Sheet
To become a better investor, it's smart to learn to make sense of financial statements -- such as balance sheets.
Some financial statements, such as an income statement, reflect a company's performance over a period such as a quarter or year. But a balance sheet reflects the company's financial condition at a specific moment -- typically the end of a quarter.
Balance sheets and other financial statements are generally available on a company's website, in the "Investors" section. They're included in quarterly earnings and annual reports.
Here's a look at Walmart's balance sheet, reflecting the end of its third fiscal quarter of 2026, which ended on Oct. 31, 2025. It shows $10.6 billion in cash and cash equivalents, up 5% over the year-ago quarter. A growing pile of cash is good -- though at some point, if a company has more than it can put to good use, it might pay out more in dividends to shareholders.
It's generally best for companies to have little or no debt, but taking on manageable debt -- especially when interest rates are low -- can be an effective way to finance operations. Walmart's long-term debt at the end of the third quarter was $34.4 billion, up 2% over year-earlier levels. A peek at the balance sheet's notes reveals that recently issued debt bears interest rates between 4% and 5%.
Next up on the balance sheet: inventory. Walmart listed $65.4 billion of inventory, up 3% over the previous year. Inventories growing rapidly can reflect unsold products languishing on shelves. Ideally, inventory growth shouldn't outpace growth in sales (revenue). And Walmart's revenue, shown on the income statement, grew a solid 6% year over year.
As you learn your way around balance sheets, you might learn to assess other factors, such as inventory turnover, which reflects how many times per year the company sells out its inventory. The most important measures to assess will vary by industry.
My Smartest Investment
I Spotted Excited Consumers
In early 2016, Tesla started to take orders on the not-yet-available Model 3. Curious, I walked over to a Tesla dealership in San Jose, California, to see what was going on. To my amazement, there was a line of potential buyers stretching for a block outside the showroom, as if it were the newest iPhone that people wanted to be the first to have. These folks were putting $1,000 down on a car they had never seen or driven! Sensing that something was happening here, I went home and started buying Tesla stock. My initial investment of $7,000 is now worth over $250,000. My only regret is that I didn't buy more! -- G.S., via email
The Fool responds: Well done! Simply looking around you to notice which companies are doing a brisk business can be a great way of discovering exciting stocks for your portfolio. Once you find some portfolio candidates, though, more research is warranted. Look into the company to see, for example, how much cash and debt it has, and whether it's posting earnings or losses. You don't want it to run out of money before it reaches its potential. The more you know before investing in it, the better.
(Do you have a smart or regrettable investment move to share with us? Email it to TMFShare@fool.com.)
Foolish Trivia
Name That Company
I trace my roots back to 1918, when a fellow in Chicago launched "Rent-A-Car" with a fleet of 12 Ford Model T cars. (My fleet now tops 500,000.) By 1925, I had a coast-to-coast network, and in 1932 I debuted car rental service at an airport. I began offering one-way rentals in 1933. With a recent market value above $1.7 billion, I boast brands such as Dollar, Thrifty and Firefly, and I have more than 11,000 rental locations in 160 countries. I also sell used vehicles in the U.S. and operate a 24/7 car-sharing service in Europe. Who am I?
Last Week's Trivia Answer
I trace my roots back to 1833, when a London antique dealer started selling decorative seashells. His sons inherited me and became pioneers in bulk oil shipping. In 1907, I merged with a rival and expanded my operations. My tankers were used by the Allies in World War I, and my refineries in the U.S. helped the Allied forces in WWII. Today, with a recent market value near $210 billion, I'm an energy giant. I recently employed around 96,000 people and boasted 1 million business customers. I paid out $8.7 billion in dividends to shareholders in 2024. Who am I? (Answer: Shell)
The Motley Fool Take
Life Sciences in the Cloud
Cloud computing leaders are among the largest and most successful companies in the world. Competing with them is challenging, especially for smaller players. However, Veeva Systems' (NYSE: VEEV) clever strategy is helping it succeed. Rather than go toe-to-toe with giants like Amazon, Veeva built cloud services to serve the demands of one industry: life sciences.
Drugmakers and medical device manufacturers must adhere to strict guidelines -- from regulatory compliance to data integrity and patient privacy. If they don't, they could lose business, fail to launch products, undergo lawsuits or incur the wrath of lawmakers. Veeva Systems helps them follow those rules, and it has become the go-to cloud provider for many of the largest pharmaceutical companies.
Through most of 2025, the stock significantly outperformed the market with solid financial results: Veeva hit its goal of having a $3 billion revenue run rate in 2025. (Shares plunged abruptly late in the year and lost more than 25% of their value, but have begun to recover.)
In a market where some CEOs overpromise and underdeliver, the company's ability to hit its projections is noteworthy. Management aims to double Veeva's revenue by 2030.
Veeva Systems has been a solid growth stock in the recent past and is still worth considering for a long-term portfolio. (The Motley Fool owns shares of and recommends Veeva Systems.)
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