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This was our inaugural issue.

Step 1 of 12 to get started investing

Get the Right Mindset

So, what is the right mindset to start investing? Well, before I answer that I will give two incorrect, but popular mindset options. 1) Complete pessimism. This one sounds like this, "Don't invest in the market unless you are ready and able to lose everything you invested". Whoa, hold on a second. While it is possible to lose everything when investing in the stock market, I believe this mindset to be too extreme. If you plan on losing everything you probably will not ever get started, and if you do, you will be too cautious to actually make any money.

2) Complete optimism is the other popular mindset. This one goes like this, "I'll invest in some high risk stuff, buy low, sell high, and make a killing in no time." Also problematic because while this is possible, its likelihood is similar to winning the lottery.
Neither of these individually is the correct mindset, but I believe a combination of them does lead to the correct one, which I will call - Cautious Optimism. With Cautious Optimism you can mentally understand that you can lose everything that you invested, but realize that this is highly unlikely unless a global market collapse occurs. With proper diversification your investments should cover a wide range of sectors and countries which will hopefully keep you from big losses.

While understanding the possible downside, Cautious Optimism also allows you to plan on making money in the market (otherwise what is the point?) but realize that it will be a slow process. Overnight riches are rare in the market, but long term success is extremely common. Knowing that it will probably be a long bumpy ride to financial freedom will allow you to not worry about daily fluctuations and stay focused on the overall picture.

With that out of the way, we move closer to the actual recommendations. But first, a little more information to make sure we are on the same page. This newsletter is designed to help you get comfortable with investing. There are many ways to do this, but we take the approach of making sure that you are involved in the decision process. A lot of confusing graphs, charts, trend information, and numbers could be thrown out leaving you confused about what it all means and whether this really is a good recommendation.
Not so with Positive Returns. We provide the economic and/or societal macro-trend that we believe will propel our recommendations to great returns. We then expect our subscribers to decide on their own whether they believe the trend is:

1. currently happening
2. will happen soon
3. will happen in the distant future
4. will never happen

The decision you make about the macro trend will largely determine whether you believe this recommendation to be a good one or a useless one. We keep it very simple, not a ton of numbers, just some basic information and then we turn it over to you. If you believe that the trend is currently happening or will happen soon, then it might be a good time to do some personal research and "pull the trigger" and invest in our recommendation. If you believe the trend is far off, perhaps your money might be put to better use in the immediate future. If you do not think the trend will ever occur, then ignore our recommendation and wait for something you can feel comfortable investing in. So without further delay, here are our first recommendations.

Our Safety Pick this month is an ETF. If you are not familiar with what an ETF is, visit our site www.positivereturns.net and learn about them as they can be a very powerful way to invest.

Powershares WilderHill Clean Energy Portfolio - PBW

The Basics
"The Fund seeks investment results that correspond generally to the price and yield of an equity index called the WilderHill Clean Energy Index by investing at least 80% of its total assets in common stocks of companies engaged in the business of the advancement of cleaner energy and conservation." Basically this ETF is comprised of companies that deal with clean energy like solar, wind, ocean power, and battery technologies.

PBW's current Top 5 holdings are:
Trina Solar
JA Solar Holdings Co
First Solar Inc
Yingli Green Energy Holding
SunPower Corp

These top 5 holding all deal with solar power. There are 49 other companies that make up the ETF which give it 54 stocks in its current holding. The rest of PBW's holdings touch on several other areas of clean energy.

Upsides -

1. The macro-trend behind this recommendation is probably obvious to you if you have filled up your gas tank recently. Gas is expensive which means more and more people, companies, and countries are becoming increasingly interested in clean energy as an alternative to oil. China and India are growing like crazy which requires energy. Even though the U.S. is past its prime in terms of growth, we still require a massive amount of energy to keep our country running.
According to Richard Asplund, author of Profiting from Clean Energy who is citing the International Energy Agency and the U.S. Department of Energy, world energy demand will grow 57% by 2030 and $4 trillion of new power generation assets are needed by 2030. That sounds like a massive trend to me personally.

2. This ETF has several different types of clean energy companies, which is a positive because it can be very difficult to know:
A. Which companies will stay viable in this competitive industy
B. Which type of clean energy will reign supreme
Investing in this ETF will allow you to take advantage of whatever type of energy becomes the next oil (should one type do that).

3. International Exposure. Many of the top holding are international stocks which I especially like as growth will be found outside of the U.S. from now on.

4. Current Price
There are a bunch of numbers that an investor can look at when researching a stock, but the two I pay closest attention to are the stock's current price relative to its 52 week high and low and its P/E (price to earning ratio). Since ETFs do not have a P/E I will only discuss the current price.

Current price (as of close 7/15/08) $18.37

52 Wk High $28.84
52 Wk Low $17.40

I love to see numbers like that. The current price is very close to its low for the past year, so the chance of it dropping much lower is reduced. With the recent market downturn PBW is sporting an attractive entry price.

Downsides -

No dividend. Recommending a safety holding that does not have a dividend is not my style, but I see the macro-trend here as too hard to ignore.
Another downside is the fact that gains are limited by the broad exposure to several different types of companies. Since PBW is an ETF it will probably not explode and provide huge gains in the near future. This is a slow, steady growth play.

So there is our first recommendation. What do you do with it? To reiterate from above, if you believe in the macro-trend of alternative energy gaining popularity, then you should take a good look at PBW for your own portfolio.

Disclosure - I own shares of PBW

Nonprofit Recommendation - Games For Life, Inc.

Interview with Ron Chapman Jr., Executive Director

1. Why does your organization exist?
Our mission is: To advance individual understanding and use of games for personal growth and knowledge. To teach individuals the usefulness of games to support healthy, fully-functioning, and financially responsible lives.
Basically we teach important life principles through games. Kids are maximally engaged when playing games so why not sneak some learning in there?

2. How are you different from other nonprofits?
We are the only nonprofit in the Atlanta/Decatur area (that we know of) that offers after-school chess programs for the duration of a school year. We also offer programs using other games if organizations are interested. Also, most chess nonprofits are focused on the game and tournaments where we want to focus on the life principles.

3. What do your financial numbers look like?
The numbers are really small as we still consider ourselves a new nonprofit. In 2007 we brought in $1,549 and spent $372 while so far in 2008 we have brought in $1,767 and spent $2,081 to date. Our main source of revenue is fee-for-service from our chess classes while our main expenses have been equipment, official registration stuff, and salaries.

4. Are you growing?
Definitely trying to. We were in 3 Atlanta Public Schools, one private Decatur school and a church last year. We want to at least double the number of places this upcoming year. If you have any connections with schools or other organizations in our area, please let us know.

5. Anything really new/interesting on the horizon?
To be perfectly honest, no. Being such a young nonprofit we are still trying to get the basics down and increase the number of individuals we are able to help by increasing the number of programs we run.

6. Who is the target population for your services?
We serve anyone that can benefit from our programs, but right now all the schools we worked in last year were 100% African American elementary schools. We taught students K-5th. We hope to expand to middle schools in the near future.

7. If you had a large influx of money, what would you do with it?
Beef up our advertising. We would like to be in contact with every public and private school in Decatur and Atlanta as well as any day care/recreation center, etc. where children gather. Depending on the amount of money we would be able to look into cutting our current fees for chess classes.

8. Do you have competent leadership?
Of course! I serve on the board and as Executive Director. I received my undergraduate degree from Harvard University, and have two master degrees with the 2nd being an M.P.A with a focus in Nonprofit Management. During my career I have organized and run kids' camps, tutored and mentored kids, and taught lots and lots of chess. My wife, Susan L. Chapman, also serves on the board and is our Program Director. She received her undergraduate degree from Furman University, has received her masters from Georgia Tech and generally helps me keep the organization running.

9. Do you have any partnerships?
No official ones. We are hoping to get some official ones soon!

10. What's your pipe dream for the organization?
We would love to have programs all over the country and even internationally one day.
Beyond the organiztion we would love to see every student in this country at least learn the basics of chess.

For more information on Games For Life, check out their site at www.games-for-life.org