A couple of years ago, my friend and I started an investment company.  We decided to throw some spare cash each month into a ShareBuilder.com account and buy some stock.  Individually, we were doing good, but together we have done much better than we expected.

We have consistently beat the market with our “free money” strategy and boast a 30% return on our investments.  By no means am I bragging, because I know I am not talented.  I just want you to know the tools we use to help get to this point.

First off, Google Finance is my favorite.  They give you all the info you need plus great interactive charts.  I can go back as far as I want to on each stock and see their dividend payouts and try to spot cyclical trends.  The charts allow me to compare each stock with others in their sector as well as the Dow and S&P.  Google offers news and financials for each pick.

Then, we use ShareBuilder.com because they allow for the purchase of fractional stock.  Most other sites force you to buy whole shares and you don’t get to take full advantage of your money.  For example, I have $100 and want to buy Coke (NYSE:KO) at $53.34 a share.  I would only be able to buy one share at other sites and have $46.66 left over in my account collecting dust.  Instead, I could buy 1.87 shares with ShareBuilder.com and have every penny working for me.  I am truly perplexed others don’t do this.

Recently, I have adopted two new websites to aid me.  First one is TheStreet.com owned by the Jim Kramer of Mad Money.  It offers lots of great insight.  I have disagreed with many of the hold/buy/sell opinions, but have had to prove to myself, “why?”  It has helped sharpen my sword.

Next, there is Yahoo Finance.  They offer many different data fields on each stock that most sites overlook.  I used to think they were crowded with info, but now I understand more and value all the help I can get.

Check out these sites for yourself.  Any others?

Those looking for a solid performer with huge room and potential for growth, listen to this pick.  In fact, get to the mountain!  Green Mountain Coffee Roasters (NASDAQ: GMRC) is a great stock teetering on a tipping point.  I believe it is ready to climb, I am actually putting my money on it.

Continual improvement is something I always have believed.  As a novice investor, there is much room to learn.  I have up to this point learned how to build a solid portfolio, which has produced for me quite well.  My strategy is a long term one that I coined “free money.”

Free money, I choose stock with solid financials who pay out great dividends.  I consistently have made money over the past two years in a down economy and am gobbling up more shares by reinvesting the dividends.  However, that is a moot point today.  My next chapter is about learning the sectors and what affects their movement.

I decided to start in the Consumer/Non Cyclical sector after sipping on my Panera coffee.  In doing so, I came across Diedrich Coffee (NASDAQ: DDRX) whom is being noticed as a company with huge earning potential.  In fact, they were crushing the other stocks in the sector until the DOW collapsed last week.  I would be jumping all over this stock if they were priced a couple dollars cheaper.  Not because I think they are over-priced, in fact, they are a great buy at $34.63.

The lower price desired is because there is high speculation that they are going to accept the buyout offer for $35 a share by Green Mountain Coffee Roasters.  Therefore, if they do, you would not gain much if any.  However, GMCR is sitting in the middle of their 52-week range.  They have tons of assets and very little debt.  Their management is solid, and they are moving to open new distribution channels.

If they obtain DDRX, it would slip right into their proposed launch of a wholesale line.  DDRX primarily deals with wholesale customers.  Weird how the announcement to launch wholesale is quickly followed with an offer to buy DDRX.

Goldman Sachs is the face of what’s gone wrong with the American financial system. They are nigh universally reviled among the blue collar general populace who has no use for an investment bank.  Angela Merkel, the Chancellor of Germany, is considering dropping them.  In England, British Prime Minister Gordon Brown called them morally bankrupt.  Back in the US, the Securities Exchange Commission (SEC) is suing them.

So, obviously all this is having a pretty big impact on Goldman Sach’s bottom line right?  Right?  Well, it is true that there has been a big change in Goldman’s earnings for the first quarter of 2010.  They are UP.  A lot.  Goldman reported first quarter earnings of nearly three and a half BILLION dollars.

Sometimes numbers like this can be obscured by the the magnitude of the industry.  Does the average Joe know if $3.5 billion is a lot or a little for Goldman Sachs?  Probably not.  And it’s probably good for Joe’s blood pressure if he doesn’t know because Goldman’s earnings are up 91% from a year earlier.

How can this be?  Well, simply put, Goldman’s clients are leaving.  If you had a doctor who was a well-known scoundrel who was known to be grossly inept and was being sued for malfeasance,  you’d find another doctor.  But what if he was the only MD in town? Or what if there were other doctors, but you believed them all to be worse than yours?

You’d hold your nose and stay.  That’s more or less where Goldman’s clients are right now.  Somewhere between denial and out of options.  So they stay, Goldman proclaims its innocence, and the investment firm continues to make money hand over fist.

Until & unless the government’s lawsuit is settled, Goldman will continue to operate business as usual.  Investors beware.  Ignore all warnings, and you’ll end up with what you deserve.

It is official: absolutely everything is online now.  After all these years, there is now an online piggy bank.  This one is even better than the one on your dresser because it gives you interest.

About a year ago, a friend turned me onto an online banking website with a pretty cool theme.  It is www.SmartyPig.com.  This is a site that allows you to set goals, build a savings, have friends contribute and make money on one of the best interest rates in the nation.

SmartyPig.com offers a way to set savings goals.  I set one for some side money since my wife’s work switched to part time after my daughter was born, called the mommy retirement fund.  I picked a balance and a timeframe for my savings goal.  SmartyPig.com told me how much to contribute to meet that goal and offered to do automatic withdrawlas every month.  I just went into the account and was shocked how much is in there in less than a year.  It is amazing how fast money accumulates when you ignore it.

This is a savings account that I want to forget about.  It is one I want to build and have as a reserve fund, but you can make any goal you choose.  Many people set up accounts to save for a vacation or even a wedding.  It is super easy and almost fun way to save money.  You have a piggybank icon that tells you your current percentage towards your goal and is fun to watch grow.

Friends and family are even able to put some cash towards your goals.  My family is considering setting up accounts for all the kids.  Then we can put birthday money right into their savings each year.  It will be a fun way to teach them to save for their future goals.

Finally, this account has a 2.01% APY.  This is the highest rate I could find as of 4/05/2010 for a savings account.  I am a huge supporter of ING Direct and have been for years, but their savings is only 1.10%.  In fact, SmartyPig.com even beats most CDs.

If you’re a dabbler in the investment markets, you have probably heard the term “Forex”, but you may not know what it means, much less how you can use it to make yourself some money. The word Forex is short for Foreign Exchange. Forex is the Foreign Exchange Marketplace in which currencies from around the world are traded against one another.

Although it is not as well known as other markets, such as the New York Stock Exchange, the Forex market is huge, trading well over one trillion dollars every day. That’s trillion, with a “TR”. The Forex is handily the largest trade market in the world today.
Unlike the NYSE, the Forex has no physical locale. Forex trades can take place anywhere there are willing buyers and sellers at any time during the trading week, which runs from the beginning of the trading day Monday morning in Australia and doesn’t stop until the end of the trading day Friday in the United States of America.

Forex Trading involves using a margin account to obtain the right to trade batches of currency calls ‘lots’. Traders pair up two currencies from those traded on the market, betting on a change in the relative value of the two currencies. While there are quite a few currencies eligible for trading on the Forex Market, there are 7 main currencies traded: the United States, Australia, Canada, Japan, Great Britain, and Switzerland and the Euro.

The main players in the Forex Market are not individuals leaning over their computers watching for a blip in the exchange rate. Big banks dominate the marketplace, but it is open to anyone with a computer, phone, and a margin account.

If you are interested in playing the Forex Market, the first thing that you’ll need to do is find a reputable broker to help you establish your margin account. With a margin account, you do not need to have a full equity position in your currency lot. Most brokers allow trading with a 1% leverage position. This means that for every $100 of currency traded, you need to have only $1 in your margin account.

Just the other night, Chris Hubinsky, my friend and co-founder of H&L Ventures, and I laid out our first quarter stock investments.  I wanted to share our stocks and re-iterate our investment strategy.  Also, I am going to talk about a stock from our last strategy meeting.

We started this very small investment company in January of 2007.  H&L Ventures, Ltd. has been blessed with a 20% profit margin in the first two years.  We believe the credit can be awarded to our strategy, “free money”.  The majority of stock we purchase is high dividend yielding stocks or giant corporations.  We chase after companies with dividends because not only do we have shares in their company, they are giving us free money.

Dividend investing is when you re-distribute the funds for more stock.  So, instead of collecting a check for dividend payouts, we buy more shares, which means more dividends on the next payout.  We aim for companies with 3% yield or higher.

One such stock was (HTE) Harvest Energy Trust.  This was an energy investing company who paid monthly dividends over 3%.  Most dividend paying companies only do so quarterly.  Not only did we get dividends and more stocks, but this stock more than doubled at a rate of 230%!  Recently, they were bought out for $10 (Canadian) per share and we got $9.46 a share.  All those who listened to me last year enjoyed the profits.

This time around we decided to go after a high dividend stock.  This is Frontier Communications (FTR) with a 13% yield paid quarterly.  For those having trouble grasping this, the Law of 72 has you divide 72 by the yield.  The result is how many years it would take to double your initial investment as long as dividends are redistributed.  Every 5.5 years this investment will double.  Not too bad considering most companies have yields below 3%, which would take at least 24 years to double.

Naturally, we jumped on this stock.  I suspect the yield is high because they just started paying dividends in 2008, and they will not remain this high.  However, we couldn’t pass this one up and sleep at night.  Can you?

Recently, sources have revealed investors are dumping large amounts of money into Twitter.  There has been much speculation and rumors that Twitter.com could be prepping for an IPO.  Why else would companies dump $100 million into a company with zero revenue?

According to Bloomberg.com, the company is believed to be valued at $1 billion.  The only rationale for valuing the company this high is if they are ready to unleash a massive revenue plan or if they are going public.  Either strategy would require some type of plan to make some money for this social media company.  The traffic is there to form unbelievable potential to investors.

Currently, Nielsen states that there are over 25 million “Tweeple” throughout the world.  Businesses, celebrities and entrepreneurs really are beginning to take advantage of this unique site.  Ashton Kutcher is followed by 3.7 million.  He capitalizes on this to help raise awareness for his television productions and charitable causes.  Businesses keep customers up to speed on new products and events.  Entrepreneurs are sharing marketing and business tips with their followers.  Even pastors and motivational speakers are able to share quotes and inspiration.

Twitter really gained worldwide recognition because of the media and recent events in Iran.  When no reporters could get firsthand information during the election protests and ensuing violence this summer, they relied on Tweeple.  The value of its communication power became evident and had everyone asking, “What is this Twitter-thing?”  How could they possibly turn this traffic into money, though?

Almost every financial website covering Twitter agrees on two main ways revenue can be generated.  One is to create business applications, such as calenders and private messaging.  These business packages would open the lines of communication to employees worldwide.  The business possibilities are expansive.  The other main way for income is for them to go with the advertising route.

No matter what they do, they are poising for major profit generation.  Keep your eyes posted for the IPO and let me know.  I’m on Twitter at (www.twitter.com/joeylaw) and so is Wasabi Media Group (http://twitter.com/WasabiMedia).

What other ways can Twitter generate profits for its investors?

In my reckless youth, I learned many valuable lessons.  One of them was on the value of the Halo Effect.  I like to call this phenomenon the Law of the First Round.

First, I will explain the Halo Effect and then tell you my law.  The Halo Effect is when you make a great first impression and that is the image that another retains of you.  For instance, I had a boss who met me right after I won a big award.  In his eyes, I could no wrong.  Serendipitously, I made a great first impression that lasted.

When you bust your butt and are noticed for it, all is great.  Eventually your effort builds up equity…called sweat equity.  Those with this are able to get away with a bit more.  If one of my hardest workers is a few minutes late or wants a long lunch one day, no big deal because he earned it.  On the flip side, when a slug is late I am more likely to place my thumb on him.

I have seen this played out as a young worker, and now I see the effects of it as a supervisor.  For the most part it is a fair assessment, but there are those who know how to “fake it.”  They are utilizing the Law of the First Round.

Played out, the law is as follows.  We all go out as a group to a bar.  I buy the first round.  Later someone buys me a drink to repay me.  Then another person thinks that they should too.  As the night progresses, people begin to forget if they bought me a round yet.  All night long I benefit from minimal effort at the start of the evening.

There are plenty of people who bust their butts and deserve all the recognition.  However, we need to beware of those who have figured out this law.  They are the ones who kiss butt or live off of their early victories.  We just need to be sure that we are continually evaluating other’s efforts, not just the first round.

Every team has one person who just doesn’t get it.  What do you do?  I offer you three steps to get where you need to be.  First, recognize that we all are “that guy” sometimes.  Then get to the root of the problem and create a solution.  The final step is to follow-up on your created solution.

By recognizing we aren’t perfect is a huge step.  All of us have been the slow person on the team at one point.  If you haven’t been, then your leaders aren’t challenging you by placing you in areas outside your comfort zone.  This will stunt your growth.  Seek more challenging assignments.

The second step is to get to the root of the problem.  Tom Lemon was a huge mentor in my life.  He always used to tell me, “Either you don’t know or you don’t care.”  Determine if there is a lack of ability or simple laziness.  Once you know the root of the issue, create a solution that will fit the situation.  Sometimes people just don’t know what they are doing.  In this situation, offer training.

If they know and just do not care, then provide them with corrective training.  This can be anything from simple verbal corrections to the possibility of a firing or removal from the team.  Just make sure the penalty is appropriate.  Don’t feel badly if you need to get rid of a lazy person or to be strict with them, you’ll only hurt the team by ignoring the problem.

Now, you know the cause and created a solution.  It is your opportunity to use the powerful tool of follow-up.  Check on the progress that is made and if there is none, start over.  Do this immediately after creating the solution.  If you wait too long, the problem will worsen.  If the problem is fixed, give praise for the efforts and move on.

This process allows you to fix the problems and help the team members grow.  When your leaders see you allow people to lag, they associate you with their efforts.  By using this simple three-step process you can move your team forward and ultimately allow yourself to move up to another level!

It is coming up on the summer months, and there are two great stocks to help earn you some lemonade money for the upcoming heat.  There is a great one to watch and another great one to pounce on right now for almost instant returns.  I am talking about General Electric (NYSE: GE) and Harvest Energy Trust (NYSE: HTE).

The stock to watch is GE.  General Electric is currently much lower than their usual range in the $30′s sitting at $10.94.  Just looking at the technical, I expect them to drop in between $8-9 range in a month or two.  However, even buying them right now is a 60% off bargain deal.

General Electric is leading the way in alternative energy ideas.  They are the largest producer of the new Compact Flourescent Light (CFL) bulbs.  These bulbs soon will be taking over our normal bulbs because of their energy savings and long lasting durability.  GE will capitalize on this market.

GE is also a very solid company, famous for their excellent leadership throughout the years.  Everything they build is of great quality and affordable price.  From light bulbs to home appliances.  From medical equipment to aircraft engines.  They are everywhere and appear to have a vision for the new “green” market we are entering.

My top pick that you need to run out and buy now is Harvest Energy Trust.  This company is an energy company based out of Canada.  Their normal range prior to the recession was in the $20′s and now are a steal at 80% off of that.

Coming up on summer and the normal trend of skyrocketing gas prices at the pump, they are poised to make a decent profit.  This is an excellent time to buy a stock like this.  My only regret is that I don’t have more money to throw at them right now.

Oh, I almost forgot.  Dividends.  Harvest Energy Trust pays out monthly dividends.  Normally, they are about $0.30 per share.  Now they are a mere $0.05, but with one hundred shares (dividends reinvested) you get one free share a month.  That is 12 free shares a year just for having faith.