Money & Investing - Banks.com

One of the more promising energy technologies emerging right now is solar energy technology. Even as Big Oil executives claim that drilling in protected areas would help our energy crisis, there are many advances being made in terms of increasing the efficiency of solar energy. Bloomberg reports that many companies are starting to invest in solar energy technology and other renewables in order to get a jump on things:

Costs for the technology will fall below coal as soon as 2020, the U.S. government estimates. JPMorgan Chase & Co. and Wells Fargo & Co. invested last year in the biggest solar plant built in a generation; Chevron and Google are funding research; and Goldman Sachs is seeking land to lease as demand out-paces wind turbines and geothermal.

As you can see, above, even Big Oil giant Chevron (CVX) is getting in on solar energy. This means that in order to take advantage of solar energy stocks, you needn’t necessarily invest in solar energy start-ups like First Solar (FSLR). Indeed, if you take a look at other companies, you may find that you can enjoy the solidity of investing in an established company while enjoying the growth that can come from new technologies. And you don’t have the same risk you would have in a small start-up.

Increasing oil prices will eventually force the government and others to look for alternatives to fossil fuels. This means that as innovation and technology advance, other options, like solar energy, will become more popular. If you have the risk tolerance for it, now may be a good time to invest in companies that are investing in solar energy technology.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions.

Tags: stock market, stock market analysis, investing blog, solar energy technology,
CVX, investments, FSLR

One of the things to be wary of right now are financial stocks. Financial sector stocks are rather volatile, and there are rumors that some banks will be crashing. Indeed, some have already. The FDIC is running three banks right now. One of the banks in my parents’ town in Idaho, ANB Financial (an Arkansas based bank), has already failed. MarketWatch reports on the current bank failures — and what may come:

Only three banks have failed so far in 2008. But that number is set to surge as the credit crunch slows economic growth and hammers some lenders that grew too fast during the recent real-estate boom, experts say.

The roots of today’s banking crisis grew out of the boom and bust in the real estate market. Lenders originated more and more mortgages, while other banks, particularly smaller and medium-sized institutions, ploughed money into construction and development loans.

This news also fits in with what Federal Reserve Chair Ben Bernanke said toward the end of February. He warned that some of the smaller banks might be susceptible to crashing as the economy finds itself in a “freefall.” Bernanke is not the only one who worries about the state of US banks and the economy. Warren Buffett, billionaire investor, has made comments about a long and deep US recession. Buffett even believes blame for this whole mess rests squarely on the shoulders of the banks, reports BloggingStocks:

To keep the daily excitement going, he made a statement that U.S. banks were to blame for the current credit crisis. According to Reuters, “The banks exposed themselves too much, they took on too much risk …. It’s their fault. There’s no need to blame anyone else,” he said.

So, when choosing financial sector stocks, make sure that you choose carefully. And remember: venerable institutions are not completely immune. Look what happened to Bear Stearns.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions.

Tags: stock market, investing news, investing blog, Ben Bernanke,
economy, investments, financial stocks

Even though looking at past returns is a very popular way to make investing decisions for a portfolio, it is not the only way. Indeed, you should be wary of basing an investment portfolio decision solely on past returns. Just because a company, commodity or fund has done well in the past, doesn’t mean that it will do well in the future. This is especially true if the investment is a relatively new one. Many growth investments have a phenomenal first year, only to turn in disappointing performances over time.

Looking at long-term average

When considering an investment for your portfolio, there are many factors to take into consideration. One of them could be a long-term average. One of the funds in my Roth IRA has a five year average of 11 percent in terms of returns. It goes up to 13 percent on the 15 year average. In the current market, I just try not to think about what the one year return is going to be.

If you are choosing an investment that has been around for a while, you want to look at the long term, rather than the short term. Has it shown consistent growth over time? Of course, even for those that show the longest term consistency can suddenly tank. Investing always carries risk.

Fundamentals

You should also look at the fundamentals of your investing decisions. Does the investment have solid management? Are the prospects favorable? Are there overall economic reasons to make the investment? If something changes dramatically in the fundamentals of an investment, you might consider get out. After all, it’s past performance won’t save it from poor performance in the future.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions.

Tags: past returns, future returns, investing blog, investment portfolio,
investing decisions, investments, forex trading