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Tickers in this Article: WFC, GS, AXP, BK, VFH, XLF, IYG
Wells Fargo (NYSE:WFC) and Goldman Sachs (NYSE:GS) recently announced positive results for the first quarter of 2009. Job layoffs and economic uncertainty still dominate news headlines, leaving investors to wonder just how in the world these banks have been able to turn their end of 2008 woes into end of Q1 2009 cheers. Let's take a look at the different business segments enabling the bruised and embattled banks to report positive returns. Trading Profits
Goldman, long known for its deal-making prowess and investment banking panache, attributed profits for Q1 2009 almost entirely to the performance of its fixed income, currency and commodities business segment, also known as FICC. Specific mention of record profits in interest rate products and commodities was mentioned in Goldman's earnings release. Net revenues in FICC more than doubled during the first quarter to $6.56 billion over the same time period a year ago. The outperformance of the FICC segment more than made up for the 30% decline in its investment banking revenue.

Traditional Banking
Wells Fargo is expected to report $20 billion in total revenue for the consolidated entity, including revenue from newly acquired Wachovia Bank. Wells completed its acquisition on Wachovia at the end of 2008. Wells Fargo's reported an expectation of record net income totaling $3 billion for the first quarter. The positive figures were driven by $100 billion in new mortgage loans and refinanced loans, along with $190 billion in mortgage loan applications. (For related reading, see Liquidity And Toxicity: Will TARP Fix The Financial System?)

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Options
Investors have the luxury of being able to eliminate the risk associated with investing via the singular banking profits model. A variety of financial ETF funds offer investors broad diversification, along with low expense. A few financial ETFs to consider include the Vanguard Financials ETF (NYSE:VFH), the SPDR Financial Sector Select (NYSE:XLF) and the iShares Dow Jones US Financial Services (NYSE:IYG). Other banks among these ETFs that performed well since the beginning of the year through April 14 include the Bank of New York (NYSE:BK) and American Express (NYSE:AXP), each rising 15.67% and 12.68%, respectively.

Final Thoughts
Investments cannot be determined by one quarter alone. Before taking the most recent positive news as a signal to rush in, investors would be better off considering their appetite for risk as the toxic assets at the root of the economic recession have yet to work their way completely out of the system. For investors with time to spare and a belly fit to withstand the possibility of future dips, a dollar-cost averaging re-entrance to financials may be in order. (For more, see The 2007-08 Financial Crisis In
Review
.)

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