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Suppose, we at SELEDA thought after a particularly gruesome editorial meeting, suppose we, er, inherited $25,000? How would we spend it?

Some on the staff perked up: "Hey, those were legit charges on my expense report!" Hmm. The "Idmé to Affirmative Action" staff members, alumni of that all-girl school named after a holy city, flung off their cute Nine West sandals and started counting their fingers and toes to see if they could actually count to 25,000. Upper management snorted with disdain the way only SELEDA upper management can snort in disdain. ("You can't get good cappuccino for 25K!")

Oki doc.

The general consensus seemed to be that if some of us extorted… did we say extorted, we meant came across, 25K, we would buy a copy of Guns 'N Ammo and scour it for a reasonably priced hit man, preferably with a last name that ended in a vowel.

Well, not exactly prudent, we thought. Necessary, but not prudent. So we thought we would direct an inquiry to the Greater SELEDA community, those financial whizzes and gurus in the Diaspora who just might sink 25K into more sound investments than "offing" colleagues.

We asked them, very nicely, to take part in a hypothetical situation: What should we do with the dough? (Dropped on their desks in brightly colored festals, in small change, if you know what we mean.)

Here are three opinions… please forgive the lamentations of the writers about certain rouge editors, who might have, inadvertently, used blackmail (the nice kind) to solicit their expertise.

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Ambasell: Financial Analyst at one of those posh firms on the East Coast that require you have in your possession a reference letter from the Pope before being allowed to enter its doors:

I would like to start by saying that I seldom give out financial advice especially for free let alone over the Internet in quite an anonymous manner. After much pressure from the editors of SELEDA [Editors have taken note of gratuitous sim maTfat.], which if I were to discuss at length would easily take more than a few pages, I have agreed to submit a short brief on how a youngish, thirty-something, Ethiopian might invest twenty five thousand dollars.

I have always heard that editors can be murder with all their assignments and deadlines, well let me tell you those guys at SELEDA are no different. What is unfortunate is that their assignment was a bit vague "…Tell us what you would do with…".

Needless to say that is not how things work. What is the risk profile of our potential investor? What is the investment horizon? Are there any tax implications to be considered? If I were to submit a few questions for further clarification, our editors would only think I was looking for reasons to back out. So to make things a bit simpler we have made our own assumptions. (This entire exercise was performed during my personal time so I have also included input from my significant other. Her sense of humor, is only exceeded by her understanding of finance and I have thoroughly enjoyed collaborating with her on this essay.)

As we sit down to try our hand as cyber investment advisors, we would like to make sure you read this quick disclaimer.

THE ONLY SAFE PLACE FOR YOUR MONEY IS UNDER YOUR PILLOW.

That said, we will attempt to give you our thoughts on what one may do to improve his or her net worth. Of course I should mention the obvious, which is that if there are any thirty-something Ethiopians who have twenty-five thousand dollars sitting around, they surely do not need any advice from us. It may be that the thirty-something Ethiopian with $25K to invest gravitates to the coveted title of Foreign Investor, by returning to Ethiopia to either buy house, a factory, a trucking company, or even a suite at one of the more upscale hotels while he/she researches every option.

Unfortunately never having had the chance or experience we can not add any insight in this option, nor do we have numbers to support a particular approach. That said, there are a multitude of benefits if one were to invest in Ethiopia, which we will leave to those more qualified to discuss.

Perhaps the SELEDA editors thought we would go out on a limb, with "Ten stock picks" a la every portfolio manager on CNBC. Wrong, you can go straight to channel 15 for that. First and foremost, we do not want to hear "…indi belewign genzebayn aTefut…" if the market were to take another slide.

Second and more to the point, we felt that readers would be better served if we discussed some of the fundamentals, which can be implemented with much less then $25K.

At the risk of sounding like we work for a mutual fund, which we assure you we don't, (in fact this free advice goes expressly against the wishes of our employers) our recommendation is that an investor with $25K should avoid buying individual stocks and go the mutual fund route.

By investing through funds, you are paying a management fee but in exchange for that you are getting a personal portfolio manager who will track your stocks and rebalance them daily according to the fund objectives.

In addition, most funds buy stocks at little or no transactions costs since they are also investing millions for many other investors. Lastly, lets face it, $25,000 may be a lot to you and I, but in this market it will go a lot further, i.e. you will get a lot more diversification, when grouped with thousands of other investors.

So here is our scenario. Say we've been approached by two different investors who have the same goal. Being thirty-something both are ready to settle down and need to bolster their nest egg.

Chekole needs to double his money in one year. He has promised his future bride a very lavish extravaganza of a wedding, which will definitely out do every other lavish extravaganza of a wedding they have ever seen. Given Chekole's desperate time horizon and investment goal, short of a quick trip to Vegas, our recommendation would be a portfolio of high growth and Internet stocks. For the twelve months since March'99 the NASDAQ was up by 91% (never mind what has happened since then). So this time next year our young prince will either have the wedding to end all weddings, or he will be looking for a justice of the peace who makes house calls. Let's face it if she is marrying him for love and not money it won't matter anyway.

Tigestu has already seen that lavish weddings rarely lead to lasting marriages, and has a more pragmatic approach. He would like his money to grow slow and steady so that he and his new wife will be able to buy a nice home, send their kids to a good school, etc. While it may sound very non-new economy and kind of boring, diversification, Diversification, DIVERSIFICATION is the key. Remember that old advice from your parents "Don't put all your eggs in one basket"? Well it has come back to haunt you as an adult. We recommend a portfolio consisting of the following proportions:

30 % Bonds
45% Blue Chip Stocks
25% Growth/Internet Stocks (we said slow and steady not stupid! A future Microsoft may be in this basket)

Before you agonize too much about these numbers, remember that it is not the percentages or the timing that is important, but that a financial strategy, any financial strategy, is actually implemented. (While the S&P didn't show double digit growth in the same time period, its five-year performance is a whopping 173%.)

As this is definitely becoming more than a short brief, we will leave it up to you to research load/noload, NAV…that's when the real hard work begins.

"No gain is so certain as that which proceeds from the economical use of what you already have." - Latin Proverb

Here endith the lesson…

*****

Biniam: an investor banker at a leading "Did your grandaddy go to Harvard" firm on Wall Street.

Talk about shooting yourself in the foot – it was only a few months ago that I got up one morning and found myself writing to a friend deriding one particular SELEDA issue's contents as "largely tirki-mirki topics, liberally garnished with vainglorious verbiage, and authored by out-of-touch and self-appointed liqawnt." Somehow, my morning ramblings found their way to the "The Mail" page of SELEDA. What I was thinking when I wrote those words, only the Lord and the AbsolutVodka Goddesses of the night-before know. All I can say is that my morning ramblings were met by the potent pen of an esteemed SELEDA Editor in the form of an unforgettable lashing on my poor self and my beloved alma mater. [Editor responds with a sheepish grin: awww, gee thanks…] In any case, I have now come a full circle and wish to redeem myself.

Of Monkeys and Men
Every so often, journalist have been known to attempt to discredit portfolio managers and investment advisors by matching them up against anything from astrology to dart-throwing monkeys to ridicule the advice of these so-called experts. Somehow, I have a funny suspicion that SELEDA editors are playing a cruel joke on the participants of this particular topic by simultaneously commissioning three chimps from the sidist kilo zoo to compare and ridicule our "expert" advice. [Maa? Ingna? Ridicule? (confused look) when have we ever?]

Well, I do not wish to be labeled as an "out-of-touch and self-appointed liq" but I am ready to be gauged against my distant cousins from sidist kilo.

In any case, I was asked to contribute some thoughts on how I would invest a hypothetical $25K SELEDA's Editors claim to have "inherited." The following does not reflect the views of my employers and is not intended as investment advice. It is merely a personal (and rather gluttonous) reflection of which sectors of the economy I would dabble with if our distinguished Editors entrusted me with the $25K.

One of the key principles when it comes to investment talk is diversification. Diversification may entail diversifying holdings of an individual company (be it in the form of stocks, options, or even income), or a particular industrial sector. One possible means of diversification may be investing in actively-managed mutual funds. However, I subscribe to that school of thought that long-term and interested investors tooled with access to basic financial resources such as www.yahoo.com or refreshing sites such as www.fool.com will be better off venturing out on their own.

Doubling Down
Kin Hubbard, one of America's greatest humorists once said that "The best way to double your money is to fold over once and put it in your pocket." That was in the good old days of Prohibition - I doubt whether he would have said the same thing in these not-so-sober days of the "New Economy."

I would speculate that he would be doubling down his money betting on the technology sector that has been fueling the global economy to unprecedented growth for the past decade. There are many established companies in this sector that are entrenched in solid fundamentals in terms of financial performance, management experience, and industry positioning and that stand out as having promising long-term upside potential. Such companies include those involved with the media (AOL and Time Warner: TWX), software (Oracle: ORCL), telecommunications (WorldCom: WCOM, Nokia: NOK), internet and networking (Cisco: CSCO, E-Tek Dynamics: ETEK, Sun MicroSystems: SUNW, Verisign: VRSN), business-to-business (Universal Access: UAXS), and even shipping (UPS) sectors. These companies are at the forefront of innovation and may very well serve as a groundwork upon which a whole new economy may be built.

In addition to technology stocks, biotechnology stocks have also shown some explosive, but volatile, growth. This sector has been a stage for much speculation due to its potential to revolutionize healthcare. The apparent Holy Grail is predicting which companies will dominate this sector. Some of the established players like Amgen (AMGN) and Medimmune (MEDI) have already shown solid performance and are expected to continue to do so for the near future.

Others such as Human Genome Sciences (HGSI) or Celera Genomics (CRA), two of the many players of the much-publicized effort to map the human gene might prove to be worthy of attention.

For my gluttonous alter ego, the side that feels that it is well equipped to keep up with the market and profit from pricing discrepancies, there is one company that has piqued my interest and the interest of many investors, including His Exalted Highness, Mr. Buffet of Berkshire Hathaway. That company, MicroStrategy (MSTR), is down 87% from its highs in March and is attempting to convince investors that the core fundamentals of its business model have not changed much. It should be interesting to see if investors are convinced by MSTR's arguments and jump back into the bandwagon. I already have. I am now waiting to see if my dart-throwing cousins from sidist kilo will do the same.

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Addis-Alem Bekele, partner at Bekele Capital in NY:

I am not a guru. However, I will share with you some of my opinions. Before I advise you on how to invest your 25 grand, consider these questions:

Do you want to invest because it's sexy, or your friends invest, or because you read and hear about it so much? Talk about sex, if your hormones are raging in these moist summer days, your chances for salacious conjunctions are much better at a wedding, leqso, and the annual soccer match. (If y'all have better suggestions about the "s" subject, please forward your tips to the editors of this august magazine and they will make sure I receive your correspondence.)

To continue with my questions, how much time do your friends spend investing? How many of them are profiting and how much have they profited? How long have they been at it? Are you ready to imitate what they do? What else about your friends do you imitate? Would you pierce your tongue or experiment with S&M if they were to? (I am in no way implying that investing is an activity remotely related to these two that I just mentioned. By the way, none of my friends pierced their noses when I pierced mine. Come to think of it, neither did they shave their eyebrows when I did. Should I speculate why my friends would or would not mimic me?)

Talk about speculating, I digress. The topic is investing; and I was speculating that you might want to invest because your friends do. Why else?

If it's because of what's on TV and the papers, a lot of what you read in the newspapers and see on TV is idle chatter, by the way. The Dow goes up, the Dow goes down; so? (There are other things that go up and down too but that would be too distracting for now.)

How serious are you about investing? What do you wish to accomplish with this money? Do you want to be a millionaire in six months? What is your time frame? How much effort are you willing to expend to attain your goals? How comfortable are you with risk (and by this I mean how much money would you be comfortable to lose)? What kind of a person are you? Are you a gambler? Are you greedy? How do you relate with money? Do you spend what you have once the bills are paid? Are you interested in learning so you yourself invest or do you want somebody to tell you what to invest in, trust them, give them the money, and walk away? Are you simply looking for an investment tip?

Unlike the tip I solicited a few lines back, don't bother with investment tips. Avoid them like the plague. You will lose a lot of money investing based on tips. The majority of tips about stocks are useless. By the time you find the tip that makes you money, you won't have money to invest on that tip because you would've lost all your money on the other useless tips.

Considering that over 75% of the investors in the stock market lose money year in and year out, don't hurry to jump in the stock market. Most wealth is created by people who own businesses. The Bill Gates's and the Michael Dell's are business owners, not stock market investors. These are people who have found an activity they are passionate about and have run with it. They could have been cooks, like Julia Child, or interior decorators, like Martha Stewart. Making money and being successful is as much about looking inside and finding what gets your juices flowing as it is about finding this year's Yahoo. You'd be surprised that once you do get to those juices, you may not even want to invest in the stock market. You may end up opening a business.

Having come this far, if you still feel that you would like to test the waters in the stock market, here are several ways for you to go about it:

1. Open a brokerage account and plunge in. Buy and sell stocks yourself. If you find a stock you think is going to make you money, buy it. If you think not, don't. It's very simple.
2. Find an experienced stockbroker. Despite the adage about salespeople not caring about you, there are always exceptions; the salesman who believes that doing well by the customer is good business. Again, like finding any good practitioner, be he a mechanic, doctor, lawyer, or shemanney, finding a good stockbroker will take some searching. Look for a stockbroker who has been in the business for five or ten years. More importantly, look for a broker who keeps his customers. You'd like to have a broker who has happy and active clients who have been with him for several years. You'd also like to know how much money he has been making for them (on average) in the time they've been with him. That's what I meant by happy and active. The broker has to be making money for his clients.
3. Find a financial advisor. These are people who give advice. Unlike a broker, who gets paid a commission every time you buy or sell a stock, financial advisors get paid a certain set percentage annually (like 1% or so), regardless of how much money you make. They will guide you towards investments that tend to be conservative, like mutual funds or index funds. They may also discuss other issues like investing for your retirement, for your kids' college tuition, and obtaining insurance. They attempt to put you into investments where you have some idea of the return you can expect on your investment.
4. Find someone like us. We are Bekele Capital. Bekele Capital invests money in the stock market for our clients. We conduct all the research, we buy and sell the stocks, we deal with the brokerages. We do not give advice or make recommendations. Our customers get a report from us every quarter keeping them up to date on how much money we've made or lost. At the end of the year, a final report is prepared showing profits or losses. Our fee is then calculated and taken from the profits we show. The profits, along with the rest of the money, are then reinvested in the coming year. If we have no profits for a year, we do not get paid for that year. If we have a loss for a year, we do not get paid until that loss is made up. Outside of that, we do not charge commissions or management fees. We aim to double our clients' investments every three to four years. Given the volatility in the market, we recommend that clients stay invested with us for the long term.

Obviously, there are many, many more ways to invest in the stock market. I just mentioned a few to get you started. Even with these few, I may have given you a lot to chew. Go ahead, chew. Take your time. Think about the questions. There are no deadlines. You are not here to prove anything to anybody. It is your money. It is your time. Think. Ponder. Be honest with yourself and the answer will come to you. When it does, if you still need to, then we can talk further.

Good luck.