Table of Contents

1.  Market Update
2.  The Gone Fishin' Portfolio
3.  Nasdaq Premium Income and Growth Fund (QQQX)
4.  Additional Investing Ideas
5.  Investor Trivia -- A New Fund Shows Gains of +180%
6.  Featured Topic -- Business Development Companies
7.  Free Investing Resources

Today's Top Stock Picks

When The Going Gets Tough, The Tough Go Fishin'
Are you stressed by the tumultuous market? Are you confused by the constant price swings driven by irrational rumors and unexpected economic reports? There's an easier way. Read More. . .

Capture a 12% Yield with a Fund that Likes These Market Swings
Market fluctuations are no problem for this growth and income fund; in fact it makes money from them. Read More. . .

Market Update

Sliding home sales, widening trade deficits, unemployment jitters -- in many ways, this past week looked like so many others before it. But of course it wasn't. In fact, history may well look back at this point in time as a watershed for the financial sector of the economy.

After months of grappling over the fate of embattled mortgage finance agencies Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), the government has finally decided to play its hand. Last weekend, The U.S. Department of the Treasury announced the momentous decision to officially seize control of the companies.

In other words, Uncle Sam is now explicitly standing behind the government-sponsored enterprises -- which combined either own or guarantee about half of the nation's $12 trillion mortgage market. By acting as a backstop, the government is hoping to restore investor confidence, provide some stability to the mortgage market, and make financing rates more affordable for homeowners. And already, rate spreads between mortgage-backed bonds and U.S. Treasuries have narrowed dramatically, as a new 30-year mortgage loan is down to 5.79% from 6.19% just over a week ago.

Of course, the move won't help cure every economic ill. However, the government's move has already helped soothe the bond markets and will make it easier for lenders like Bank of America (NYSE: BAC) to write and refinance new mortgages -- welcome news for those in search of a loan. And it should help shore up the balance sheets for many of the nation's banks.   

Wall Street initially cheered the announcement, and the Dow vaulted nearly 300 points on the news. But pessimism returned and reclaimed much of the gains as the major averages seesawed throughout the remainder of the week.

Looking ahead, the market is likely to enter another rough patch this week as Lehman Brothers (NYSE: LEH) -- one of the nation's largest investment banks -- has filed for bankruptcy protection. While the final outcome of the year-long credit crunch has yet to be known, it is definitely taking its toll on individual investors. If you've felt bumped and battered, you should read Karim Rahemtulla's -- Investment Director of the Smart Profits Report -- prescription for a more tranquil approach to investing, below.

Along the same lines, High-Yield Investing editor Carla Pasternak profiles the Nasdaq Premium Income and Growth Fund (Nasdaq: QQQX, $15.07) in today's Digest. This closed-end fund has found a way to profit from these tumultuous times and also offers a generous yield of more than 12%.  

Good Investing!

-- Nathan Slaughter
Co-Editor
TopStockAnalysts Digest

As I was tracking the stock market on Monday, September 8th, one particular stock caught my attention -- big-time. Shares of this well-known company began the day over $12, plunged to $3, and ended the day just under $11.

Talk about one heck of a turbulent ride (and that should give you a clue as to the stock I'm referring to here). Some folks made a LOT of money, while others lost a boatload.

The question is: How do you ensure that you're on the right side of the equation when the you-know-what hits the fan?

The Rise Of The Machines
In my 20-plus years in the financial and investment business, the stock market is arguably behaving more irrationally now than at any other time. What's more, it's not just a quick bit of volatility here and there... the turbulence is occurring over a sustained period of time.

Why? What should we attribute this volatility to? The economy? Energy prices? Inflation? Higher unemployment? The government takeover of Fannie and Freddie? How about the war in Iraq? The close political race for the White House? These are all factors, for sure. If there's one thing investors hate, it's uncertainty.

But there's another reason for this unparalleled level of skittishness. A new component that was non-existent in its current form just 10 years ago. Something so ubiquitous that we just don't give enough credit for in making this period amongst the most volatile ever.

Yes, my friend -- the machines have finally turned against us, and we don't even know it.

When Going Online Can Put You Off Kilter
It's the Internet. Plain and simple, this one life-changing technology has changed the way we invest. It's the single most effective means of global communication today -- a medium we use to invest and make split-second, broker-less decisions from our laptops from anywhere in the world.

The Internet is a hub of information -- for news, sports, music -- and investing decisions. We treat the Internet as a news source, regardless of whether the news is accurate. If it's online, or if we get it from a Google search, it has to be true. There is no due diligence allowed, no time to find out what the real news is -- not when everyone has access to the same information. And if the whole crowd is wrong, heck -- better to be wrong with them, just in case they're right. Right?

Wrong. It's twisted logic. And it's what caused that stock I mentioned a moment ago to plunge -70% before recovering over +200% in just one eight-hour period.

A Bumpy Ride For United... Courtesy Of A Wacky Web
Last Monday, trading in shares of UAL Corporation (Nasdaq: UAUA), the parent company of United Airlines, were temporarily suspended when the stock plunged. The drop occurred because a news story from a very credible source -- the website of the Florida Sun Sentinel newspaper (owned by the venerable Tribune Company (NYSE: TXA)) -- mentioned that the airline was considering bankruptcy.

An hour after the market opened, the shares began to plunge... at the exact time the story began to make its rounds. The fall gathered momentum on the source's credibility -- it's not like it was just some blog site run by unhappy union employees trying to send a message to management, or from a short-seller wanting to spread rumors.

But it was totally bogus.

The story was first published in 2002 -- when United WAS considering bankruptcy -- and was buried deep in the archives of the newspaper's online site.

But that single click on the archived article all of a sudden made it a "live," present day story (I still don't understand how that happened) -- and as soon as it made it to the "live" world, investors panicked and sold the shares.

The company swiftly refuted the story and the shares recovered -- but the gains for some and losses for others were in the hundreds of millions of dollars. This is NOT the way to invest. On the other hand, here's a much better way...

Don't Look For A Bogus Truth... Just "Go Fishin"
The instability and volatility of today's stock market is aided and abetted by investors turning to flimsy sources like blogs and message boards to find the "truth" when there is no other explanation.

More often than not, however, this truth is a concocted story, or an opinion disguised as truth. The answer may be wrong, but it's an answer nonetheless, and investors are always seeking answers to explain what they cannot. In essence, it turns into any answer potentially being the right one. Is this the kind of basis on which you want to risk your hard-earned money? Not in a million years.

A better solution comes courtesy of my good friend and colleague Alex Green, whose long-awaited book, The Gone Fishin' Portfolio, has blasted its way up the rankings on popular sites like Amazon.com and Barnes & Noble.

In it, he discusses his extremely successful investment philosophy and the simple, yet effective, techniques for making AND keeping the money that you make.

His observations and advice come from years as a Wall Street money manager and as the guiding force behind The Oxford Club's phenomenal investment advisory.

Simply put, it's the very antidote that you should look to during times like this. It's grounded, logical, and based on the sound investment philosophy that has proven itself in all market conditions -- even those like we're experiencing today.

So do yourself a favor and use the Internet for something that you should use it for! Click here for more information.

Started in January 2007, the Nasdaq Premium Income and Growth Fund (Nasdaq: QQQX, $15.07) invests nearly all of its assets in a portfolio designed to track the Nasdaq-100 Index. This closed-end fund is managed by IQ Investment Advisors, which recently became a part of the Nuveen Group.

Unlike the more commonly known Nasdaq Composite, which lists more than 3,000 companies, the Nasdaq-100 comprises 100 of the largest domestic and international non-financial companies listed on the Nasdaq Exchange.

Since the June 2007 quarter, QQQX has distributed $0.4625 quarterly per share, or $1.85 a year. At current prices, the fund is yielding more than 12% ($1.85/$15.07). Management fees are a reasonable 1.05% annually.

While its key holdings are found in Nasdaq stocks, the fund also invests in stocks outside the index. As of June 30, 2008, for example, it held shares in Boeing (NYSE: BA). At that time, roughly 66% of its portfolio was invested in information technology, with another 16% devoted to healthcare. Apple (Nasdaq: AAPL) was its largest individual position and constituted more than 12% of the portfolio, with Microsoft (Nasdaq: MSFT) second at just over 6%.

To generate investment income for paying dividends, QQQX writes call options on the Nasdaq-100 Index. As of the latest quarter, the fund wrote options on approximately 45% of its $330 million portfolio. Since the fund owns underlying stocks that replicate the performance of the index, these calls are similar to covered calls written by individual investors who hold underlying positions. However, in QQQX's case, the stocks can not be called away since the calls are written on the index. Instead, the fund has to buy back the option at a higher price if the index goes up.

QQQX will do best in a Nasdaq bull market when it will profit on its investment positions. In a Nasdaq bear market, it will perform better when the implied volatility of Nasdaq-100 options is higher. Premiums for options rise with higher volatility, increasing the cash QQQX receives for each option contract it sells. The past several months have seen reasonably high volatility. As a result, the fund has held up relatively well, providing +1.3% returns in the second quarter ended June 30th, better than its benchmark's       -0.9% decline and also well ahead of the broader S&P 500's -6.1% loss. QQQX has traded at a substantial discount to its net asset value over the past year, and the current discount of more than -10% is about in the middle of the discount range.

QQQX provides a potent combination of income and capital gains potential and is particularly well-suited to a Nasdaq bull market. At present, its yield of more than 12% may be attractive to patient value seekers who are willing to hold for the long term while the index puts in a bottom.