Invest in small banks

While I spend plenty of time reviewing banks to give you tips on where to avoid fees and which institutions offer some of the best customer service in the banking industry, today’s post is a bit different. As financial analysts make their predictions for the year ahead, I found this video from CNBC to be quite interesting for any readers who are interested in investing in bank stocks.

As the debate over big vs. small banks continues, this video highlights that small banks do possess some advantages over the country’s biggest financial institutions in 2012. While the troubles at big banks have made lots of headlines over the past year in the form of falling stock prices (ex: Bank of America stockholders suffered some very big losses in 2011), debit fee debacles and exposure to European government default risks, this clip shows that community and regional banks hold some key advantages due to more limited regulation. Check out the video above for some advice on where to invest your cash this year.

Outside of the investment area, I’ll be anxious to see how the Volcker Rule and added capital requirements impact big banks like JPMorgan, Bank of America and Wells Fargo this year. As we saw with the Durbin Amendment last year, bank rules tend to have big consequences for banking customers, too.

Do you plan on investing any of your cash in banks this year? If so, what did you learn from your investments in 2011?