When I started equity investing, I would always come in 100 percent or all-in in one particular stock. Now, given that the particular stock grows, then my investment will surely end up with a high return. But in some instances I had to cut my losses painfully, just so to prevent further eating up my capital.

The old adage tells us not to put all your eggs in one basket. In other words, there is a need to diversify your portfolio. Several factors come in:

1. The aggressiveness of your portfolio or the absence of it must reflect your age. The younger you are, the riskier your portfolio may be.
2. Your risk tolerance will also apply. Whether you can stomach daily paper losses or you are satisfied with small returns offering low risks.

Following the most recent bull run many people wanted to invest their hard-earned money with hopes of getting big-time with the investment profits they will earn. Apparently, with the recent down turn in markets coupled with increasing inflation rates and weakening dollar, many of these recent investors got burned.

One of the dangers of investing, especially in equities, is thinking about return or past performance. Remember that in investing, past performance is not an indicator of future returns. Although history has a tendency to repeat itself, bad returns may even be worse than past bad years, while good returns may just be a small percentage of past good runs.

Annualizing monthly returns also contribute to this danger as a month’s good performance can be hard to duplicate given the delicate conditions of the market. We cannot expect that month-in and month-out, the same assumptions and behavior will prevail. Thus we have months of panic selling and months of buying euphoria.

Another danger of investing is lack of proper knowledge in financial markets and investment instruments. Investors must do their homework and immerse themselves with the proper knowledge when participating in such dynamic markets.

Timing the bottom or the peak of runs is another danger that confronts new investors. Waiting for the bottom before coming in or waiting for the peak before unloading provides opportunity costs that will be hard to recover.

Lastly, it is so easy to enter positions by buying shares. But even before an investor should buy, he should very well plan his exit strategies, whether at a loss or with a gain. Stop loss figures must be established in the same way as target prices.

Biodiesel: The Fuel for today

With the high cost of gasoline around the country, and the fact it is constantly climbing with no view of stabilizing, the world needs to start looking at alternative fuels. During this phase of the economy its a good investment. One of the alternative fuels that has started to become popular is called “Biodiesel”. A fuel that is run on vegetable oils. Biodiesel engines can be created or converted from petroleum diesel engines easily and cost-effectively. Biodiesel comes from renewable plant resources such as the oils from vegetables, soy, beans, canola, rape seeds, hemp seeds, and various grains. Through the process of transesterification, a chemical modifical of ordinary vegetable oil, creates a fuel that meets the high industry standards for usage in diesel engines that prevents it from solidifying at colder temperatures. You can get various biodiesels already at the pumps that might be labelled “biodiesel” but in reality are mixed with petroleum and its biodiesel content could be as low as only 5%. These are labelled B5, B20, B50, and B100 to show the mix composition. SVO - Straight vegetable oil is that which has not yet been optimized through transesterification for use in diesel engines - but suffers from freezing and solidifying easier in colder temperatures - needing some source to preheat it before starting the engine. You can use cooking oil straight from the bottle (expensive) or use WVO - Waste vegetable oil, usually for free, from fast food restaurants that usually dump it. However, WVO has to be filtered, and that is a messy and timely event. Vegetable oil conversion kits for diesel engines usually include a heating system and a second gas tank to circumvent the solidification issues. SVO produces very low emissions and is one of the better alternatives for the environment. Biodisel is the only alternative fuel that has completed the health effects testing requirements of the Clean Air Act, creating a substantial reduction in hydrocarbons, carbon monoxide, and other noxious fumes caused by most fuels. SVO is better for diesel engines as the inventor of the Diesel engine (Rudolph Diesel) originally intended the diesel engine for peanut oil. Biodiesel saves money on fuel costs, reduces emissions, recycles waste oils from restaurants, is a fuel made from renewable crops which in effect keeps farmers employed, and is good for the environment. The cons to using biodiesel can void your current warranties if you install a conversion kit and use biodiesel; collecting and converting WVO is a messy job and also very time consuming; there is mixed data on how SVO affects engine life span. Conversion kits can be obtained from various merchants for as low as $500 from greasecar.com. More information can be found online at www.biodiesel.org, goodgrease.com, localb100.com, journeytoforever.org, biodieselblog.com, wvofuels.com, calcars.org, oil_press.com, or a typical google search.

Experts are saying that from past experiences your best bet when it comes to the stock market, especially if your new to the game is to buy firms that have new products. Companies with new products seem to do very well when it comes to stocks.

Sales in Garmin’s auto unit rocketed 252% from the year-ago period, as more new cars come built with navigation devices. In May the firm released the StreetPilot 2820, a gadget with Bluetooth wireless connection, for cars and motorcycles. The StreetPilot lets users make phone calls hands-free and even contact hotels, restaurants and other points of interests from the database.

A computer voice gives drivers turn-by-turn directions and helps them avoid traffic jams. Users can get real-time traffic information, including alerts to accidents, construction and road closures, by subscribing to an FM Traffic Message Channel or XM NavTraffic.

The device comes with an audio book player and MP3 player that can sort music by artist, album, song and genre. Garmin will begin selling the StreetPilot 2820 in June for $1,099.

Source

Biodiesel, a wave of recycling for the future, a new fuel that’s starting to get popular, that is based on recycling or using vegetable or food oil for fuel. Many at-home-labs and conversion projects will go and pick up used vegetable oil from fast food places like Mc Donalds for free, take it home, filter it, and process it for their biodiesel engines. The result? a consumable cost of 25-50 cents/gallon, and an engine that can get upwards plus of 75 miles to the gallon. Sound fabulous? it is conceptually, but its alot of work to clean the oil at home. Biodiesel pumps however are being installed in many states and available at the pump. A bit cheaper than petrol, you still get the maximizing effect of miles to the gallon. How to convert your engine over to biodiesel? There are kits as cheap as $200. However, you have to already have a diesel engine to start the conversion. An amazing new investment strategy? Invest in biodiesel companies to maximize your profit … there’s growth there too, more miles for your dollars, in many more ways than one. Just google “biodiesel” and you’ll be amazed by this new technology. If I already had diesel engines in my car and RV, you can bet I’d already be converted. Just wish there was a way to convert my regular engine over. :: sigh :: someday.

Are you a fan of long-term investing?

If so, Morningstar is suggesting you take a look at stocks in the media sector.

Media stocks have performed poorly over the past few years, but don’t let that deter you:

We suspect that future returns for media stocks will be much better than those of the recent past … and we’re not just saying this because the past several years have been so bad.

In fact, 40% of the 60 media stocks Morningstar covers have ratings of either 4 stars or 5 stars, and the media sector overall includes more undervalued stocks than any of the other 12 sectors Morningstar analyzes.

Where should you start? How about Washington Post Co., one of Morningstar’s favorites. And don’t forget The New York Times Co. and The Wall Street Journal. Finally, remember to take a look at local options: firms — like Journal Register, McClatchy and Lee Enterprises — that “own scores of small, community-based newspapers … are much less vulnerable to changes in technology.”

Many people purchase shares through a broker or an online service, or more likely through an investment plan as part of yoru employment package. In most of these cases you purchase the stock with the intent of buying and holding it for a long time.

If you are that kind of investor, you should definitely look into DRiPs - Dividend Re-Investment Plans. Many of these are handled directly through the company. You deposit money with the company and they sell you shares at market value. All dividends are then re-invested into the plan, buying you new shares. You can regularly have money placed in these accounts through a monthly draw on your bank account as well. Think of them as high-powered savings accounts, allowing you to save this money while it earns the interest. All purchases are made at the market value of the stock at the time of purchase, as are the divided re-investments.

Othe ron-line brokers offer this as well, even for companies that don’t have their own DRiP program. You can ask Sharebuilder to automatically re-invest the dividends into the fractional shares, and Sharebuilder as well as the other brokers are happy to perform this service - they don’t charge fees on the partial shares via dividend purchase, but they will charge the usual broker fees for the ‘normal’ stock purchases you make for your investment.

Not all companies offer DRiPs, but those that do will not usually charge a fee - or at least nor a sizeable one - but going through an onlin ebroker will let you turn any stock investment into a DRiP.

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