Ted Allrich is the founder of The Online Investor and author of the just released book: 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.

Mutual funds are great ways to invest. They offer professional management and risk diversification, especially if it's a general fund such as large cap growth and income. The diversification is less if it's specialized such as healthcare, but there is still lower risk because the fund buys many different stocks in a sector. Many investors believe they're at a higher level than fund investing, one where they pick individual stocks and make better returns than mutual funds. That may be true, but most likely not for every investment.

By that I mean there is no way you can invest in China with a diverse group of stocks and know much about each company. And even if you can get information on a company, it's usually at least six months old. Imagine how much changes anywhere in six months, much less in a volatile economy like China. The initial reaction might be that things are even better now. But not necessarily for your company. Or when things do change, as every economic cycle does, you may be the last to know that the bubble burst six months ago for the sector in which your company operates.

Ted Allrich is the founder of The Online Investor and author of the just released book: 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.

There's an old saying on Wall Street: Invest when there's blood in the streets. Well, the streets are getting pretty slippery, especially if you're walking in the financials or housing stocks area. If you're not buying some of these stocks, you're going to miss out on some great profits.

First, before you do anything, do some basic math on any stock you consider in the financials or housing issues. Find out what the Book Value is (on AOL you can find that in Personal Finance in the Quotes program) or on Yahoo!Finance or other quote program. The Book value is what the company is worth if you subtract all the liabilities from the balance sheet. It's what's left for stockholders if the company were to dissolve and pay the remaining money to the shareholders.

Ted Allrich is the founder of The Online Investor and author of the just released book: 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.

Earnings are released this week and for the next several. Investors will be scouring the headlines, looking for their stocks' results. Here are some things to check.

Earnings: They're the first number every investor wants to see. But just seeing the earnings per share (eps) isn't enough. You want to know how those earnings were achieved. The ideal: eps grew because more widgets were sold or more hours were billed or more of whatever the company sells is being sold. That's in contrast to eps increasing because of asset sales or a division being sold or some other extraordinary event. Those will only happen one time and won't continue to increase earnings in the future. You'd like to see earnings growing faster than revenues. It shows better efficiencies at the company and suggests future growth will be as profitable or more so because of these efficiencies.

Ted Allrich is the founder of The Online Investor and author of the just released book: 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.

I read the other day that according to a survey taken by a prestigious investment firm, most investors have two or three stocks. That's a frightening statistic. Why? Because if you have the wrong two or three stocks, you're in for a very difficult time.

Since the content of this column is for non-professional investors, it's very important to realize that diversification is the key to happiness when it comes to investing. (Professionals will often concentrate in one industry, but they know it's much riskier with commensurate rewards and are trained for that investing niche.) While diversification won't make you rich fast, it won't make you poor fast either.

You aren't running a sprint when you invest. You're in a marathon which at times feels like a triathlon. You don't care about next week; you care about 10, 20 or 30 years from now. you want a large amount of money when you retire. Diversification will give you better odds of having that than a concentration of a few stocks.