It’s official: You can reduce your investment risk simply by chucking darts at a list of stocks, then buying them.

That’s if you believe a Nobel economist, of course. His crude “experiment” was the start of “modern portfolio theory” decades ago. The downside, however, was that with a reduction of risk came a dampening of profits. So scratch that idea.

How about this? A startling study in the late 1970s showed that owning a portfolio of large U.S. companies with international divisions drops your risk 10% below a domestic stock portfolio. Much better. But that wasn’t the eye-popper…

The study also found that owning stocks in international companies cuts your risk in half…

Take that, “efficiency” theorists! Yet the stuffy professors still tried to refute these results. It was a losing battle, though, as more studies emerged, laden with more evidence that international stocks reduce risk.

But the

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The Paradox of Thrift: How a Better Savings Rate is Fueling the Recession

by David Fessler, Advisory Panelist

We’ve all heard this from our parents: “Spend what’s left after saving, instead of saving what’s left after spending.”

Or perhaps this was drummed into your head: “Always save for a rainy day.”

The idea of saving didn’t just start with our parents’ generation, however. Ben Franklin was giving advice on saving way back in 1732 in Poor Richard’s Almanac: “If you would be wealthy, think of saving as well as getting. Creditors have better memories than debtors.”

As the recession of 2008 hit, Americans suddenly stopped spending, paid down their debts and started saving – some for the first time in their lives…

As a result, America’s savings rate – as a percent of disposable income – has leapt from a little over 1%

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“White Cap” Stocks: The Best Way For Investors To Beat The Market

by Dr. Scott Brown, Advisory Panelist

For decades, economists and academics have tried to define exactly how the stock market works – and the best way to profit from its moves.

In the 1950s, one argument stated that short-term market activity results in the law of one price – i.e., that buying and selling mispriced shares of the same stock forces a single price to dominate.

Then came the “modern portfolio theory,” which claimed that investors simply couldn’t beat the market averages. This so-called “market efficiency theory” was the impetus behind the formation of the Vanguard 500 Index Fund (NYSE: VFINX) – the world’s largest mutual fund.

Score one for the stuffy “efficiency theorists.”

But while they congratulated each other over brandy and cigars, a little-known professor spoiled the

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Foreign Exchange Trading: The Emotional Discipline of Trading Forex

By Dr. Scott Brown, Education Director of Investment U

As we mentioned in Part 2 of our interview with Thomas Fischer, a veteran of inter-bank foreign exchange trading, the most important aspect of trading the highly leveraged Forex markets is discipline - emotional and numerical.

One deals with how much of your cash you put at risk on any trade, and the other with psychology - how you handle that fear and greed with your money on the line.

Thomas has granted us a rare glimpse into the mysterious world of Forex trading he prospered in for 22 years.

Today we are talking about the discipline it takes to become highly profitable.

Onward we go…

Foreign Exchange Trading & Technical Analysis

Dr. Brown: In the first part of this forex trading interview you mentioned that, “When you have a winning trade take

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The Forex Markets: A Rare Glimpse Into The World of Forex Trading

By Dr. Scott Brown, Education Director of Investment U

There’s a lot of interest in the Forex markets right now.

But a big problem is that it’s nearly impossible for you to get direct advice from veteran Forex traders since they rarely give interviews and most earn so much they don’t care to teach anyone else.

They move vast sums of money and barely have time to train new MBA graduates - who may or may not succeed - let alone talk to novices trying a go of it over the Internet.

Yet despite the closed culture - the inter-bank foreign exchange market is a very small, tight-knit and elite group of top financial professionals - the Internet has opened these markets to the public for small and average investors.

Veteran inter-bank foreign exchange trader Thomas Fischer, MBA has granted us a

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Forex Trading: An Interview With Forex Market Expert Thomas Fischer, Part 1

by Dr. Scott Brown, Education Director of Investment U

Forex trading is hot, hot, hot right now. And one of the biggest reasons why is that traders are using leverage to amplify returns by 200 times - where $1 controls $200 worth of foreign currency. The returns can be staggering.

For example, on the British “Black Wednesday” of September 16, 1992, George Soros made a single day’s forex profit of $1 billion by short selling the Great Britain Pound Sterling.

At the time, these kinds of profits were only available to large players.

But recently, a major change in the way forex trading is done has opened the trading desks to the little guy. The Internet has opened the door to the small investor into this $3.98 trillion daily market.

But forex, or foreign exchange trading, has a reputation as

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Earnings Reports: 3 Stand-Out Stocks & The Post Earnings Announcement Drift

by Matthew Weinschenk, Senior Analyst, The White Cap Report

Editor’s Note: In a recent article, Matt Weinschenk showed White Cap subscribers an easy way to sort through the earnings reports that have been coming out. We’re republishing it here because following earnings is a key concept in our Investment U course and Matt gives us his insight on taking advantage of them…

Investors eyed this batch of quarterly earnings with more anticipation and scrutiny than any in recent memory. And who can blame them, really?

With a recession in full swing, companies lining up for government bailouts and economists taking to the streets of New York with “The End is Near” sandwich boards, nobody knew what to expect.

Earnings reports, however, tell the real, unabridged story of what’s happening with America’s businesses…

So now that most of the numbers are

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Excessive Executive Compensation: When is Too Much, Too Much?

by Dr. Scott Brown, Education Director, Investment U

With every disclosure I receive on executive compensation coming out of failing and defunct firms it makes me sick - as an investor and citizen alike. And I’m not the only one…

Many Americans have been outraged as the CEOs and other executives responsible for the financial crisis have pocketed millions of dollars in bonuses and golden parachutes.

And rightfully so.

The recent bailouts of banks, automakers and insurance companies has brought excessive executive compensation into the public eye. And the numbers are staggering.

According to The Corporate Library, in 2008 the CEO of an S&P 500 company received an average compensation of $10.4 million. During that time the S&P 500 lost almost 40% of its value. Yet despite these declines, CEO perks grew in 2008 to an average of $336,248 - a full nine times the ...

Green Mountain Coffee Roasters produced a return of over 113% this year alone. When powerful momentum stocks are charging upwards, it can be difficult to know when to get on board. But it’s not as difficult as you would believe.

If you want the inside track on the best momentum stocks with ultra-explosive gains, throw on your “x-ray glasses” and focus on one of the most useful financial ratios around.

It’s called return on equity (ROE), but in many ways it tells us so much more.

ROE is one of the best measures of a corporation’s profitability. It shows you how much profit the company generates with the money shareholders have invested. Let me show you how to easily pull this number out - and how profitable it can be.

How to Calculate Return On Equity (ROE)

You calculate return on equity (ROE) by dividing net income by a shareholder’s equity. The higher the

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Return On Equity (ROE): Find Explosive Momentum Stocks With This Financial Ratio

by Dr. Scott Brown, Education Director, Investment U

Green Mountain Coffee Roasters produced a return of over 113% this year alone. When powerful momentum stocks are charging upwards, it can be difficult to know when to get on board.

But it’s not as difficult as you would believe.

If you want the inside track on the best momentum stocks with ultra-explosive gains, throw on your “x-ray glasses” and focus on one of the most useful financial ratios around.

It’s called return on equity (ROE), but in many ways it tells us so much more.

ROE is one of the best measures of a corporation’s profitability. It shows you how much profit the company generates with the money shareholders have invested. Let me show you how to easily pull this number out - and how profitable it can be.

How to Calculate

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