Marc Courtenay's  Instablog

Right now, there's more than $9.5 trillion in cash on the sidelines - or more than twice the amount of money currently invested in stock mutual funds, according to MoneyNet.inc and the U.S. Federal Reserve. Private equity firms alone are believed to hold as much as an additional $1.3 trillion.

While I've always doubted that the "money on the sidelines" argument is really all it's cracked up to be, one can hardly argue with a recently released report from Harris Private Bank of Chicago [part of the U.S. arm of the Bank of Montreal (NYSE: BMO) that notes that stocks have rallied for the next two years whenever money market assets have exceeded 25% of the capitalization of the Standard & Poor's 500 Index.

According to the Los Angeles Times, that figure is now 43%, down from 58% after having peaked in December - and that's even after the 30%-plus run-up in the S&P 500 since March.

What's interesting is that many investors holding large cash positions view their money as an asset, when, ironically, it may be more of a liability at this stage of the game. At some point "cash is king" and the best time to have plenty of it is when investments become "over-sold" and go "on sale".

My main point is that we are on a new investment "playing field" in 2009 and not only have the rules of engagement changed since the Panic of 2008 but the game itself has changed. That's why we have to think and act more independently than ever when it comes to our investment money.

For example, I've been trying to spot some fairly-priced "growth with income" investments that would make sense for me and my own risk tolerance.

One that I've been looking at is United Online Inc (Nasdaq:UNTD) and the other is Realty Income (NYSE:O) which happens to be a REIT (Real Estate Investment Trust ) which engages in the acquisition and ownership of commercial retail real estate properties in the United States.

United Online, Inc. provides consumer products and services over the Internet primarily in the United States. It runs the online floral company FTD, Classmates.com, and the dial-up internet and email services NetZero and Juno.

Both UNTD and O have healthy amounts of operating cash flow and levered free cash flow with which to sustain their generous payouts of dividend. But both have some real issues and concerns that makes me want to dig deeper before I buy.

UNTD has a business model and operations that may or may not do well in this age of advancing technologies, high unemployment and fierce competition. They have almost $409 million in total debt and their "diluted EPS (earnings-per-share) has fallen with the economy.

That being said, their recent earnings annoucement was better than expected, they have around a $1-per-share in annual earnings and their plans for adapting their services and business model to the current economic environment is promising. 

This is why Zacks Research and AmTech Research have recently rated UNTD a buy.

But when does one start buying UNTD or Realty Income?  No one can decide that for us except us. For me, I'm willing to start buying UNTD at around $5.60 per share. Someone else might say that they want to wait to see if it gets closer to its 52-week low of $3.76.

As for Realty Income, I'm willing to keep watching it and studying it (their web address is www.RealtyIncome.com ) and wait to see if it will retest the May 15th low of $19.83. I want to buy on dips, and as I've said many times I like to "accumulate" in a sort of "dollar-cost-averaging" approach.

Reality income has total debt of $1.35 billion and with what is happening in the commercial real estate space right now one has to be concerned as to how they generate their income from which they payout their almost 8% dividend. I'm investigating Realty Income as best I can before investing, and that is what we all need to do.

With Seeking Alpha and all the other internet sources we should all be able to find many articles and background information. Another good source I use is Yahoo! Finance and their "Key Statistics" section. The deeper you "dig" about any investment the more you are likely the uncover both the risk factors and the metrics needed to get close to the "fair market value".

Now is not the time to take speculative chances or uneducated risks. It is a time to do our own thorough "due diligence" and make sure we carefully check out every recommendation or investment idea we receive, no matter what source we receive it from.

Now is the time to be patient, to create our own "wish list" of investment we want to own at the price we think is fair, and to let the markets come to us. It is usually never a good idea to "chase the markets" or any particular investment class.

That is why I've decided to wait for a correction in the iShares Silver ETF (NYSE:SLV) down to around the $12.60 level before I buy more. If it doesn't correct then the SLV I already own will either hold its value or go up.

I've learned that with the recent wild price swings in the US Natural Gas ETF (NYSE:UNG) which in a little over a week's time allowed us to sell at $16 and buy back today at below $14, that there is some trading opportunities for me.

Yet by reading UNG's prospectus (especially the section on "risk") and by studying it carefully you can see why UNG is so volatile and must be approached knowledgeably.

Who is better able to decide what you should do with your investment money than yourself? Yes, we all need objectivity and wise counsel before we take the plunge. And yes, there is a correlation with the amount of "reward" we seek with the amount of risk we will be willing to take. But we must decide for ourselves what we are willing to risk and how much reward we are seeking.

So let's be careful who we listen to, who we allow to influence our investment decisions, and let's take responsibility for how we invest from now on. In the final analysis, our fate is in our own hands, we will make some mistakes along the way, and in the investment world we often learn by "doing".

As Paul Kangas likes to say on the Nightly PBS Business Report, "I wish you the best of good buys". I also wish you the best of "good sells" and good fortune.