| With the world and the markets in turmoil | | | | purchase them through your discount broker. You |
| investors need a way to protect their | | | | can buy, sell, hedge, option, or bundle ETFs, just |
| investments from catastrophic loss. As the stock | | | | like traditional stocks. |
| market performs it's volatile dance of ups and | | | | ETFs are available in a wide variety of asset |
| downs, it becomes harder and harder to get a | | | | classes. Some concentrate on growth, value, or |
| good night's sleep, worrying if your investment | | | | core styles. Others focus on market capitalization |
| account will end up down for the year or up. | | | | using either small-cap stocks or large-cap stocks. |
| Now there is an investment that can help you | | | | Some ETFs concentrate on specific industries |
| weather the market storms while outperforming | | | | such as biotechnology, international businesses, |
| most mutual funds. Interested? Keep reading... | | | | bonds, or real estate. One of the newest groups |
| ETFs or Exchange Traded Funds have taken the | | | | of ETFs is known as inverse or short funds. |
| investing world by storm. It all started with SPDR, | | | | These ETFs tend to move in the opposite |
| the ETF for the S&P 500 in 1993 and has | | | | direction to the underlying security. There are |
| grown to almost 400 ETFs today. In 2005, | | | | several inverse ETFs available. See the current list |
| investors put $312 billion into ETFs, a 38 percent | | | | in the appendix for more information. |
| increase from 2004. ETFs represent the most | | | | There are also a group of ETFs that track the |
| tax-efficient, cost-effective way to invest in | | | | prices of commodities. Now it is possible for the |
| today's markets. If you don't have the time to | | | | average investor to invest in commodities without |
| watch your portfolio holdings closely or you just | | | | the hassle of owning and storing the metal, or |
| have better things to do, then Exchange Traded | | | | learning about commodity options and futures. |
| Funds are the answer. | | | | Commodities are an important part of any |
| What Is An ETF? | | | | diversified investment plan because commodities |
| ETFs are securities certificates that state legal | | | | are not highly correlated to stocks or bonds. |
| right of ownership over part of a basket of | | | | Adding commodity EFTs to one's portfolio |
| individual stock certificates. ETFs may hold dozens, | | | | provides an asset class that tends to do well |
| hundreds, or even thousands of individual stocks. | | | | when economy enters unsettled times. |
| Unlike a traditional mutual stock fund, once the | | | | Because you purchase ETFs through brokerages, |
| exchange-traded fund is set up, shares of the | | | | you can purchase one share or 1000 shares. You |
| ETF are bought and sold on the open market in | | | | do not have to satisfy minimum purchase levels |
| the same manner as regular stock shares. They | | | | like you do when dealing directly with mutual |
| have symbols, just like regular stocks and since | | | | funds. This flexibility makes it much easier to |
| they are traded on the open market, you | | | | diversify your investments. |