Everyone is talking about solar. Whether you believe that solar energy will somehow displace an oil-driven economy or not (I don't), some of these stocks like First Solar (NASDAQ: FSLR) and JA Solar (NASDAQ: JASO) have seen big gains over the past few years.

The success of solar companies has not been lost on ETF firms with their constant new products hitting the market. A smaller ETF firm called Claymore Securities looks to be first to the market with a solar ETF, the Claymore/MAC Global Solar Energy Index ETF, with an aptly-named ticker, (NYSE: TAN).

Here's Claymore's website for the recently launched ETF. From the firm's website, the index defines a company engaged in solar energy as falling into two main categories:

1. Solar photovoltaic power, which involves the conversion of sunlight into electricity through the photovoltaic process; and

2. Thermal solar power, which involves using energy from the sun to heat fluids for purposes of water or space heating or to produce electricity.

A new report from Ned Davis Research shows that companies that consistently raise their dividends provide the strongest returns for investors over the long run.

But I'm still not a fan of dividends: They're incredibly inefficient when it comes to tax-season, making share buybacks far superior as a means of returning value to shareholders of an undervalued stock -- and if the stock isn't undervalued, why own it in the first place? It's my belief that shareholders in a company should always prefer buybacks to dividends -- if you'd rather pay a big tax to receive cash instead of receiving a larger stake in the company, why do you own the stock in first place?

The Wall Street Journal reports on the study: "Since 1972, members of the Standard and Poor's 500-stock index that consistently increased their payouts, or started making them, rewarded shareholders with a yearly average 10.4% total return (stock-price appreciation plus dividends). Those that didn't boost dividends clocked 8.2%. Most of the difference came from superior stock performance." (emphasis added)

Think about it: Companies that are able to boost their dividends consistently are also, generally (A) increasing their profits and (B) not blowing their cash flow on ill-advised acquisitions. Both of these would seem to be, I believe, much more strongly correlated with outstanding returns than returning cash to shareholders with taxes.

In the stock market, there are the indexes of consequence.

Certainly, the closely-watched Dow Jones Industrial Average is perhaps the world's best-known stock market index, as it serves as an indicator of both U.S. economic conditions, and the nation's economic prospects, 6-9 months ahead.

Market participants also closely monitor the S&P 500, Nasdaq Composite, and the Russell 2000, among other averages.

For those who are advocates of technical analysis, including yours truly, the DJIA's 50-day moving average and 200-day moving average, also are important, among other technical measures.

Last October, the Shanghai Composite was over 6,000. It now trades at 3,095. According to The Wall Street Journal (subscription required), "The plunge has slashed the savings of millions of Chinese investors who jumped into the market as it rose six-fold in two years." The drop will also make it more difficult for companies in the world's most populated country to raise money.

While investors have been beaten up in the China market, the real question is whether the movement is any indication of what will happen in the broader economy this year. Some economists believe that stock market moves anticipate later increases or decreases in GDP and other measurements of financial health.

In China, the market may indeed portend what may happen in the balance of the year. The country's economic growth has already begun to slow. It is still robust, at about 10%, but that is married with inflation which is about 8%. For food and certain other consumers goods price increases are closer to 20%. An economy cannot survive forever on rampant inflation. At some point the central bank must increase interest rates to cool buying power.

Price increases in China would be even sharper if the government did not underwrite the costs of gasoline and diesel.

The other issue facing the Chinese economy is the it cannot be decouple from the West. A deep recession in the U.S. and Europe will hurt exports from China, and that will drive a sharp cut in its GDP. China's growth rate is almost certain to slow.

And, that will make the Shanghai Composite drop even further.

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

Word has hit several media outlets that Microsoft Corp. (NASDAQ: MSFT) will drop the price of its bid for Yahoo! Inc. (NASDAQ: YHOO).

According to Reuters, "Microsoft Corp. is evaluating its offer for Yahoo Inc. in light of worsening market conditions." The odds are high that someone at Microsoft leaked the news. Yahoo! shares are down almost 5% after hours.

Microsoft would like nothing more than to have large shareholders in Yahoo! calling the board and management begging them to take the deal of threatening to sue them if they don't.

Microsoft knows Yahoo! has no other options, or they would be apparent by now.

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

The Shanghai Composite moved up moved from 1,330 two years ago to over 6,100 last October. It was a dizzying rise. But, since its peak, the index has fallen to 3,300.

Investors who bet on the exchange have lost 45% of their money in a short time. Some of the key China stocks traded in the US have also dropped sharply. The shares of China search engine Baidu (NASDAQ: BIDU) hit a 52-week high of just over $429 and now trade at $273. The company still has a P/E of 105.

The Shanghai market has been dented for two reasons. First, if stock markets are leading indicators, investors in China are worried about rising inflation and falling exports to the US as the economy here slows. For a country where GDP rises 10% most years and inflation by almost as much, a share drop in growth could do huge damage to the China economy. According to The New York Times, "there are worries that a prolonged downturn could reverberate through China's financial markets."

Econobrowser suggests that housing prices could drop 50% from their peak. While it was initially skeptical about such a huge drop which was suggested by a commenter, its re-examination of this based on recent developments, and what the economists surveyed by the Wall Street Journal say led it to conclude that such a summit plummet was plausible.

Sunday, I posted on the possibility that it could take 10 years for housing prices to recover based on an interview with the Warren Group and comparing the current housing tumble to the one in the 1990s. Combining this with the Econobrowser's pessimistic scenario suggests that we could be in the longest and deepest housing price decline in American history.

I do not understand the details of the analysis presented here but if my reading of the post is correct, it concludes that the Case-Shiller index of housing prices, one which seems to have more credibility than the one produced by the government's OFHEO (Office of Federal Housing Enterprise Oversight) House Price Index (HPI), is that prices could fall 50%. Econobrower notes "that only a slightly more pessimistic than average forecast implies a 50% decline in house prices as measured by Case-Shiller, relative to peak."

So if you bought a house for $300,000 in 2006, it could be worth $150,000 when the housing market hits bottom and take until 2016 to recover to its original price. How about that for an ownership society?

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Mark Hulbert at MarketWatch wrote about influential investment newsletter editor, Richard Band's outlandish forecast that the Dow Jones Industrial Average may end the year at 16,000. This very bullish estimate of a 33% gain in the index from someone who's not typically a headline-grabber made Hulbert take note.

Hulbert, who tracks performance of some of the best newsletters in the business, has been tracking Band's Profitable Investing newsletter since 1991. In that time period, Band returned a 8.6% annualized return compared to an almost 11% annualized return in the Wilshire 5000.

Not bad but not outstanding. So why is Band all bulled up?

Technical factors have Band singing a very upbeat tune. The first, according to the article "has to do with the stock market's internal characteristics when it hit a low earlier this month. Band argues that that low possessed "many striking technical resemblances to the great bear market bottoms of the past.""

So, how does Band recommend playing the markets at this important juncture. He recommends a couple of market ETFs. Specifically, Band points to the iShares Russell 1000 Growth Fund (NYSE: IWF), the iShares MSCI Emerging Markets Index Fund (NYSE: EEM). Another recommendation is in a fund I've never seen before (but maybe I should): the Selected American Shares (SLASX). This fund, a 4-star fund according to Morningstar, invests in US large caps and has returned an annualized return over the past 5 years of almost 13%.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

Is the stock market more volatile than in the past? Many investors believe so based on the sharp intraday swings of recent days.

However, it really comes down to how you define volatility. If you look at the median monthly high-low ranges (in percent) for the S&P 500 index going back to 1980, and compare those averages to this year's values, only one month stands out so far.

In January, the range between the high and low was 13.70% (of the average of those two numbers), almost double the 7.60% monthly median going back 28 years.

The high-low range for this year's first month also topped previous highs of 13.09% in January 1987 and 12.62% in January 1980.

As of Monday's close, the S&P 500 SPDR exchange-traded fund (AMEX: SPY) was down 12.25% for the year, buffeted by continuing turbulence in global credit markets and concerns over future growth prospects.

However, the relative performance of the major sector ETFs paints a far more confusing picture.

On the one hand, strength in materials and industrial shares, and weakness in the traditionally defensive health care sector, suggests that investors are not too worried about the outlook.

In contrast, strength in the consumer staples sector and weakness in technology shares indicates they are, in fact, concerned about what will happen to the economy.

So what does it all mean?

With all the bad news out their I am reminded of the old adage that the best time to invest is "when there is blood in the streets." With gold over $1000/oz. , Carlyle Capital collapsing, the price of crude oil surging, the U.S. dollar at levels not seen in more than a decade, there is no doubt the news today is pretty bad.

With things so gloomy, the real question for investors is whether it's now time to step up to the plate and start buying stocks? While it certainly takes courage to buy stocks in the face of the financial storm that we are in the midst of, just like any patch of bad weather, at some point the sunshine will come out.

No one can say for sure if the stock market will drop another 20% from current levels. What can be said is that the market is sure selling at a large discount to where we were four months ago. I think that in the last century we have only had a handful of instances where the market dropped for four consecutive months. It just doesn't happen too often. Markets always tend to overshoot in both directions, and I have a feeling that we may have overshot on the downside.

With all of today's bad news, maybe it's time to buy stocks.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 3/13/08.

Folks on Wall Street must be pinching themselves to make sure the past 24 hours aren't a dream.

First, the reviled Eliot Spitzer was caught up in a prostitution scandal that will probably cost him his job as governor of New York. A day later, the markets had their biggest gains in almost five years after the Federal Reserve said it would inject $200 billion into the financial markets that have been pummeled by concerns over subprime mortgage crisis.

Since good things come in threes, what's next? A repeal of Sarbanes-Oxley, maybe an abolition of the capital gains tax? Why not abolish the IRS and SEC while you're at it and let capitalism run free as an unregulated bird? If you are going to dream, dream big!

But getting back to today, people gobbled up stocks as if they were eating their last meals on death row. Nine stocks gained for every one that fell on the New York Stock Exchange, according to Bloomberg News, which noted that financial shares, including Citigroup Inc. (NYSE: C), had their biggest gains since January and that Exxon Mobil Corp. (NYSE: XOM) gained the most since October 2002.

It seems that every day a new ETF is listed with a new twist on an index.

So, for a short history in ETF evolution:

1. First came the market-weight indexed ETFs. These were ETFs that benchmarked themselves to indices like the S&P (AMEX: SPY) or the Nasdaq (NASDAQ: QQQQ).

2. Then, Jeremy Siegel and the WisdomTree (WSDT) team introduced dividend -weighted indices. Instead of giving commensurate weight to the largest companies in an index, these ETFs looked at companies with the highest payouts in terms of dividends. These were shortly followed by earnings-weighted indices and the ETFs that track them.

3. Now, we read on MarketWatch that a new firm named RevenueShares has listed three separate shares: the RevenueShares Large Cap Fund (NYSE: RWL), the RevenueShares Mid Cap Fund (NYSE: RWK), and lastly, you guessed it, the RevenueShares Small Cap Fund (NYSE: RWJ).

When the entire mutual fund industry is up in arms about a new form of ETF, should investors take note? You bet they should.

There's an interesting article over on SeekingAlpha by HardAssetsInvestor. The article focuses on the Exchange Traded Note product, something I've written about previously. The ETN is similar to an ETF in that it's a fund that trades like a stock. Unlike ETFs though, the ETN is not backed by the underlying assets. Rather, it's a zero-coupon note (essentially, a bond) that's backed by its underwriters. So, it throws an added layer of default risk into the whole investment game.

Where things get even more interesting is the tax treatment of the ETN product. Says HardAssetInvestor's Brad Zigler, "No tax consequence befalls the noteholder until the security is liquidated or matures. Taxes during the holding period? Zip. Nada. Bupkis. That beats the heck out of the tax treatment of mutual funds, too, which distribute income and capital gains." Unlike ETFs investing in commodities which are treated with a complicated tax structure on the futures the funds invest in, ETNs don't pass these taxes through to investors.

Jim Farrish, founder of Money Strategies, is a leading expert on sector investing; his approach combines technical and fundamental analysis within the framework of investor psychology.

In the latest from his SectorExchange.com, he says, "This week's spotlight is the energy sector with a focus on the current trend, what the outlook is and what strategy to take looking forward." Here's his latest, along with some ETFs to play this trend.

"Over the last six weeks, the financial media has warned that 'consumption will decline as a result of the US recession.' But so far we have not seen any slowdown in consumption and may not based on recent studies.

"In fact, we have seen China and India absorb any lack of consumption by the US. The key here is not so much who is right and who is wrong, but how you manage your own positions within the energy sector.