Latoboy,

I am not trading bonds these days. For me, it looks like Fed is done with cutting interest rate. Otherwise, you could have make money buying short-term U.S. Treasury bonds. There are pleny of high-yield Junk bonds in the market but tightening credit markets is ever increasing the risk factor. From 2007 september to march 2008 was a good time to be in bond markets as it was in gold and other commodities.

Buying Muni Bonds is a good idea for longer term as you don't have to pay taxes in their proceeds.

Shorting financials is not a good idea for now as financial stocks are not that far from their respective march lows. Try to see, how broad market is playing out. Just think, with the S&P hitting 1440, if u had shorted high flying Solar and Shipping stocks, you would have had a good return by now. So, i suggest you to read the market movemnt closely and position yrself for long and short. As Buffet says, "Do not invest in something you don't know" ; so focus yrself on few sectors and industries and ride them uphill and downhill, bothways.

I am being in and out of FSLR from long time. Last time i went in long around 265 and sold in 308, then, went short at 309 and still riding it downward.

Oil and natural gas are still good plays. Buy them in pullbacks. I will re-enter in ROYL if it pullbacks a little bit. I see it going above $10.

Read the book Emini suggested. It is a nice book. Nice book for new comers like AAAA too. Markets are more complex and competitive now than it was in 1960s but learn how to short, so that you can remain longer in the market and increase yr chances of profiting from declining market.

Currently, i am reading a new book from wiley Trading : Sell and Sell Short.  Not a great book so far......

Diversification for small investors never made sense to me. Diversification, Efficient market and Random Walk Theory are few examples they make you learn in Business Schools. Knowing them sure makes yr grades look better not a portfolio.