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Ted Allrich is the founder of The Online Investor and author of: Comfort Zone Investing: Build Wealth And Sleep Well At Night. In this weekly column, he'll offer advice to investors who are just getting started.

You may see a recommendation to "overweight" a stock or sector. An analyst is bullish on a stock or group and feels buying more than usual will be rewarded. It may or may not come true. While it's a good idea to overweight at times, it should never be done in excess, to a point where you're putting too much of your portfolio in one stock or group of stocks. That's when overweight turns into speculate.

A rational approach to building a portfolio is to have at least five different sectors, ones that aren't correlated. There are different definitions of sectors but there are usually between 10 and 15, depending on what publication or expert you use. These sectors are categorized into broad groups, such as Healthcare, Technology, Manufacturing, etc. Within each sector are many industries. Value Line defines 98 different industries, ranging from Coal to Auto Parts to Water Utility to Beverages. Healthcare, as one example of a sector, has pharmaceutical companies, hospitals, medical devices, anything associated with health. Technology has a broad spectrum as well, encompassing everything from computers to wireless communication.

Continue reading Comfort Zone Investing: Overweight doesn't mean speculate

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Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

After the implosion of IndyMac Bancorp (NYSE: IMB) and news of the deterioration of Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) last week, there's bound to be a certain level of trepidation as the earnings crunch begins this coming week and many big financial companies report. Here's a look at what Wall Street was expecting (see The week in preview: Expectations as the earnings crunch begins for expectations of other reporting companies.)

Analysts surveyed by Thomson Financial are expecting the following of companies to report lower earnings when compared to the same period of the previous year.

• JPMorgan Chase & Co. (NYSE: JPM): 44 cents EPS (-63.3%) on sales of $16.4 billion (-13.2%)
• Comerica Inc. (NYSE: CMA): 51 cents EPS (-59.2%) on sales of $680.2 million (-7.3%)
• Zions Bancorp. (NYSE: ZION): 75 cents EPS (-47.6%) on sales of $627.3. million (+2.7%)
• Huntington Bancshares Inc. (NYSE: HBAN): 23 cents EPS (-32.4%) on sales of $617.1 million (+50.7%)
• Capital One Financial Corp. (NYSE: COF): $1.31 EPS (-30.7%) on sales of $4.4 billion (+7.8%)
• Wells Fargo & Co. (NYSE: WFC): 50 cents EPS (-25.4%) on sales of $10.7 billion (+7.7%)
• M&T Bank Corp. (NYSE: MTB): $1.50 EPS (-23.1%) on sales of $756.6 million (+1.6%)
• BB&T Corp. (NYSE: BBT): 69 cents EPS (-16.9%) on sales of $1.8 billion (+5.9%)
• U.S. Bancorp (NYSE: USB): 60 cents EPS (-7.7%) on sales of $3.8 billion (+8.3%)
• PNC Financial Services Group Inc. (NYSE: PNC): $1.16 EPS (-7.2%) on sales of $1.9 billion (+8.5%)

Continue reading Financials expected to post earnings declines, losses this week

From TheStreet.com Network

• Merrill, Citi Cut By Oppenheimer's Whitney
• Financial Winners & Losers: CIT Group

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From TheStreet.com Network

• Financial Winners & Losers: Wachovia
• Countrywide Could Bring BofA Misery

Continue reading Cramer on BloggingStocks: When the bottom comes, you'll know it

• DJIA 11,381.77 (+31.51)
• S&P500 1284.89 (+4.89)
• NASDAQ 2304.97 (+11.99)
• 10YR T-Note 3.992% (+0.013%)
• 52-WEEK LOWS

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Like many other financial institutions, investors are worried about the viability of CIT Group Inc. (NYSE: CIT), which is a major business lender. Of course, the stock price has plunged - and there are many rumors swirling.

But today, there was some good news. That is, CIT has struck $1.8 billion in deals to unload its manufactured housing/home loan units. The stock is up 16% to $7.93.

There were actually two buyers. First, private equity firm Lone Star Funds agreed to a $1.5 billion transaction for the home lending division. Next, Vanderbilt Mortgage and Finance will spend $300 million for the manufactured home segment.

These deals are certainly a big relief. Basically, CIT can now focus on its core business - and not deal with the headaches of the consumer area.

Actually, CIT has some big-time backing. For example, Goldman Sachs (NYSE: GS) recently made a $3 billion infusion.

Yet, there are still many challenges. After all, CIT has had difficulties generating profits and the credit crunch isn't going away.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

CIT Group (NYSE:CIT) is recently trading at $7.60 in pre-open trading, above its close of $6.81. CIT agreed to sell its home lending business to hedge fund Lone Star for $1.5 billion and its manufactured housing portfolio to Vanderbilt Mortgage and Finance Inc. for $300 million. BMO Capital says: "Although this removes one of the risks to the CIT story, we continue to view its funding risk as being paramount, particularly given CIT's $7 billion in net unfunded commitments that it must find a way to fund if drawn upon." CIT July option implied volatility of 124 is above its 26-week average of 91 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

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Continue reading Biggest stock losers, 6 ways to buy checking 'float' time & credit card rates soar higher - Today in Money 4/28

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Boston Scientific (NYSE:BSX) is up almost 4% on a strong quarter.

International Coal (NYSE:ICO) is up almost 9% on positive earnings.

NetFlix (NASDAQ:NFLX) is off almost 14% on weak guidance.

CIT (NYSE:CIT) is off 13% after raising $1.5 billion.

Shares may trade differently in the pre-market than they do in the regular session.

Douglas A. McIntyre is an editor at 247wallst.com.

MOST NOTEWORTHY:

• Oppenheimer cut Lehman (NYSE: LEH) to Perform from Outperform on valuation, as they see a "protracted challenging capital markets environment."
  
• The firm also downgraded CIT Group (NYSE: CIT) to Perform from Outperform, as they believe the company addressed its liquidity concerns too late and will be forced into a fire sale of assets.
  
• Merriman downgraded shares of Auxilium Pharma (NASDAQ: AUXL) to Sell from Neutral as they believe there were a number of unexpected adverse events in the phase 3 trials of XIAFLEX that could potentially delay the approval and launch. They see significant potential downside in the interim.

• Gap (NYSE: GPS) was lowered to Neutral from Buy at UBS.
  
• Wachovia cut Symmetry Medical (NYSE: SMA) to Market Perform from Outperform.
  
• Wells Fargo (NYSE: WFC) was downgraded by Baird to Underperform from Neutral.

Bear Stearns (NYSE: BSC) is up over 50% on news that JP Morgan (NYSE: JPM) may raise it bid for the broker.

Palm (NSADSAQ: PALM) is down 5% on weak earnings.

Lehman Brothers (NYSE: LEH) is off almost 5% on analyst downgrades.

CIT (NYSE: CIT) is up over 4% on rumors that is is raising capital overseas.

Stocks may trade differently in the pre-market than they do in the regular session.

Douglas A. McIntyre is an editor at 247wallst.com.

The short interest in most large stocks traded on the NYSE increased as measured on March 14. The figures compare to February 29. Car stocks were hit especially hard. Shares short in Ford (NYSE: F) moved up 20.3 million to 248.9 million. For GM (NYSE: GM) the number was up 19.4 million to 85.9 million.

Despite the fact that many big financial stocks are already close to lows, traders were willing to bet that they would fall off further. Shares short in Washington Mutual (NYSE: WM) moved up 15.9 million to 168.8 million. The short interest in Citigroup (NYSE: C) jumped 7 million to 125.6 million. For Wells Fargo (NYSE: WFC) the number added 9.3 million to 117.5 million. For Countrywide (NYSE: CFC) the figure was up 9.3 million to 111.5 million and at Wachovia (NYSE: WB) shares sold short were up 2.2 million to 105.4 million.

Other notable financial stocks with large increases included Fannie Mae (NYSE: FNM), up 11.4 million to 78 million, Thornburg (NYSE: TMA), up 11 million to 25.8 million, and CIT (NYSE: CIT), up 10 million to 20.1 million.

Troubled firms that have recently had bad news were hit very hard. Shares short in Sprint (NYSE: S) moved up more than any other NYSE-traded company, jumping 30.1 million to 75.2 million. Shares sold short in Blockbuster (NYSE: BBI) increased 8 million to 57.8 million.

Shorts moved out of Micron (NYSE: MU) where the number fell 4.3 million to 87.5 million, Wal-Mart (NYSE: WMT) where short interest dropped 3 million shares to 45.1 million, CBS (NYSE: CBS) which lost 2.7 million shares short falling to 29.2 million, The New York Times (NYSE: NYT) with shares short dropped 2.8 million to 30.6 million, and Time Warner (NYSE: TWX) which saw its short interest drop 2.2 million to 38.5 million.

Source: NYSE and WSJ

Douglas A. McIntyre is an editor at 247wallst.com.

About a year ago, CIT Group Inc. (NYSE: CIT)'s shares were trading at about $61. Now, the stock price is at a lowly $8.33. In fact, in today's trading, the stock price is down about 28%.

CIT is a commercial finance company, handling such things as asset based loans, secured lines of credit, leveraged leases and so on. But with the credit crunch and the ailing economy, the business is under lots of pressure. Actually, Moody's Investors Service and Standard & Poor's downgraded CIT's debt.

The upshot: it's becoming tougher to manage short-term financings (within the commercial paper market). What's more, the credit-default swap market is much more expensive.

To deal with this, CIT has drawn down its $7.3 billion credit line. No doubt, this is a red flag. Also, the company is exploring the sale of assets.

In light of the Bear Stearns Cos. (NYSE: BSC) meltdown, investors are certainly not asking many questions. Instead, it seems the thing to do is just to dump stock.

There is some good news, though with the Dow holding up quite nicely. Perhaps it's a sign that markets are beginning to stabilize and getting out of the panic mode.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.