One of the most valuable commodities in the world is water -- without it, mankind can't survive. While more than 70% of the Earth's surface is covered by water, but 97% of it is saltwater and only 1% of the remaining 3% is readily available for consumption. Water is becoming scarce, and upcoming water shortages are emerging as the population of the world increases, particularly in emerging markets like China, India, and Mexico.

A great way to include water as part of your portfolio's commodity allocation is by buying an exchange-traded fund (ETF). An ETF is a basket of stocks that allow you to invest in a single asset class, sector, country, or theme with one stock. In one ETF, you'll own not only water utility companies but also related businesses, like those that help build the infrastructure for making water suitable for drinking. You won't have to pick a single stock, rather you can own the most important stocks in the water industry -- worldwide. ETFs are perfect building blocks for building a diversified portfolio using an asset allocation strategy.

Most investors got slammed last year, down 50% or more in their investments. Didn't matter if they owned stocks or real estate, they got hammered. Many have to start over. And if they're near retirement, it's scary. Years of patient investing wiped out, gains that were made over a long time disappeared frighteningly fast.

But now it's time to begin fresh, to rebuild. What's the safest way to regain some or all of the losses without suffering another wipeout?

As you read stories about victims of the Madoff fraud, aren't you glad that you weren't one of them? Why are you so sure that it will never happen to you? How do you know its not happening to you now?

In academic financial research, there's a concept called "agency risk." Agency risk occurs when someone who is acting as your agent has a set of interests that conflict with yours. In investing, agency risk is rampant because one party can often gain from an action that will cause a loss to the investor without the investor even knowing it! Bernie Madoff was an agent of the investors who hired him to manage their money and he was crooked for years until his scheme ended. But investors face plenty of legal, yet sometimes equally dangerous forms of agency risk. It is important to understand them and find ways to mitigate these risks.

Several years ago, I heard a presentation from Laurence Fink, the mastermind behind the asset management giant, BlackRock (NYSE: BLK). At the time, he gave some frank advice; that is, he warned that investors needed to be very cautious.

Of course, it was spot-on (and saved me lots of money). And, I'm sure Fink's investors also appreciated the counsel.

Well, this week BlackRock became the king of asset management because of its $13.5 billion acquisition of Barclays Global Investors (NYSE: BCS). In all, the assets under management will now amount to $2.8 trillion.

Economist Robert J. Shiller -- the one who identified the internet bubble and the housing bubble as bubbles before pretty much anyone else did -- will introduced a pair of new ETFs later this month in partnership MacroShares.

The MacroShares' Major Metro Housing product will consist of two kinds of shares: "up" shares and "down" shares. If you want to bet that housing prices will go up, buy the "up" shares. If you're feeling bearish, buy the "down" shares. But the fund won't be investing in housing at all.

One of the buzzwords that is currently in vogue in the investment community is biotechnology. This is a broad-based field that covers technological applications in any biological system, meaning humans, animals, agriculture, and medicines. This is a booming science and the investment field offers many opportunities for wealth accumulation.

If you don't want to spend countless hours trying to understand not just financials, but scientific and technical jargon that biotech companies harbor, exchange-traded funds (ETFs) may be the better choice for investing in the biotechnology industry.

An ETF is similar to buying a share of a company, but instead of getting one particular company you're investing in a bundle of companies within a particular field or specialty. It's a great way to invest in something you believe in while still hedging your bets and having a bit of diversity.

There is an old adage. Watch the last hour of trading and you will get a sense of where the market is headed. Over the past year volume in the last hour of trading has increased from 20.7% to 26.2% The final half hour of trading saw an increase from 12% to 17.1%. A study by Credit Suisse shows that half of the big swings in the last hour drove stocks down even lower. On three days in September more that half of the drop occurred after 3 p.m.

The obvious question is what is causing this heavy volume? Now comes the birth of ETFs (electronically traded funds). They offer leverage and fast action and have become the darling of hedge funds and fast trading pros who piggyback ETF traders. Another theory is that the large sell-offs were due to selling by hedge funds and mutual funds to cover redemptions. Just this past Friday 32 million shares of Ultra Short Financial Proshares changed hands. That was up from 8 million shares in the first three months of 2008.

One other factor that is making this trading go to the wild side is the introduction of 2X and 3X ETFs. This has the effect of doubling and tripling your bet. For example if you invest $100 in a short 3X ETFand the market goes down 10%, you now have $130. But keep in mind that this same leverage can go against you just as quickly. During the past week, the markets have calmed down a bit and the last hour volatility also is less intense.

Word is that retailers will be having a very cold holiday season this year. In fact, MasterCard has noted that sales of apparel, shoes, and appliances dropped considerably in the first two weeks of November. Consumers are being a little thriftier when it comes to extras as they're worried about unemployment and the recent news of a financial crisis. But no matter what's going on in the economy, there are just things that people need, staple items.

An investment in staples means you're banking on something that people are always going to need and will always purchase, no matter what the economy forecast is. Consumer Staples Select Sector SPDR (NYSE: XLP) is an excellent way to invest in a variety of staples in one single investment purchase. This exchange traded fund (ETF) includes companies from food and drug retailing, beverages, household products and personal products. Items that are clearly essential to daily living.

With a single stock -- XLP you will get shares of such noted companies as the Coca Cola Co. (NYSE: KO), Colgate Palmolive (NYSE: CL), Kraft Foods Inc. (NYSE: KFT), PepsiCo Inc. (NYSE: PEP), Procter & Gamble Co. (NYSE: PG), and Wal-Mart Stores (NYSE: WMT). These are all well-known household names that will continue to be market leaders in any financial environment. If you want to invest in things that people need, XLP is a sound choice.