If this truly is an investing once-in-a-lifetime opportunity, as some think but not all, then which financials warrant investors' time and eventually money? Here are some guidelines.

Clearly the old rule applies: follow the money. It will tell you which banks or thrifts or insurance companies are going to prosper when the economy recovers. Which ones will those be? The ones who are still making profits when the worst credit crunch has hit since the Depression. The ones who have reserved generously for future losses. The ones whose dividend hasn't changed. In the case of Wells, it was actually increased in the last quarter by 10%.

The dividend is a good indicator of management's optimism or pessism. Companies are loathe to cut a dividend. They know some investors buy their stocks for the quarterly payout. If they cut it, those investors will sell, adding more pressure to the stock price. On the other hand, to raise the dividend is to suggest the future looks so bright that a higher dividend is not a stretch and that paying it for quite some time seems very probable.

Another indicator is forward looking statements, forecasts of future revenues and/or earnings. At this time, most will be very conservative. It doesn't pay to set up investors for disappointment by forecasting strong numbers. Most CEO's will give a worst case scenario, one that suggests tempering one's enthusiasm is warranted given current conditions. The more conservative the future predictions, the more likely the company will beat them.

The stocks to watch out for are the ones where management is singing a completely different tune from the rest of the industry. If the leaders in a group are all singing "The Eve of Destruction" and a smaller firm is belting out "Happy Days Are Here Again", then complete and total scrutiny of why is in order. More than likely what affects one financial institution will affect all of them which are in the same business.

That's a distinction to make as well. Just because a company has the word "bank" in its name doesn't mean its portfolio is full of subprime mortgages. Some banks only focus on Trust services. Others make construction loans. Investors need to know what a bank does to secure its niche. That doesn't mean these institutions are exempt from selling pressure. They will feel some of the downdraft but not as much as banks or thrifts or insurance companies loaded with bad mortgages. Therein lies the opportunity for the studious investor.

Pick through the financials with these criteria in mind: positive earnings (not necessarily increasing, just positive), large loan loss reserves, conservative forward statements, industry niche. And don't be concerned about any rallies some of them have already seen. These stocks have been battered to levels that haven't been touched in decades. There's still plenty of upside left for smart investors.