Investing into Etfs

Exchange traded funds could be considered number one growing trading vehicle in the world.

 Exchange traded funds (ETFs) are becoming more and more popular among ordinary traders and institutional investors. The biggest advantage of the exchange traded funds is the ability of diversification with a single purchase - many traders do not have enough funds to invest into extensive portfolio. If you want to invest into the biggest US companied you may buy SPY or DIA exchange traded funds, if you want to invest into hi-tech public companies – you have QQQ. You may find highly popular and liquid Etfs that are traded on the American Stock Market and that cover China publicly traded companies, strongest stocks from Brazil, Taiwan, Japan and other emerging markets.

Another great factor that attracts many retail and professional traders is the simplicity of trading. Most of the traders prefer to avoid fundamental analysis which includes stock research, studying balance sheets, etc. With ETFs, this entire job is done by the sponsors of the funds. Furthermore, ETFs traders may focus solely on the technical analysis.

It is amazing that over the last couple of years SPY (S&P 500 tracking stock) has become the most traded ETF all over the world; in addition it is in the first paces by trading volume among US stocks as well. XLF is another traded fund that is highly liquid and is very popular. It tracks financial sector of the S&P 500 index and after 2008 stock market crash, due to its high volatility, many traders took it in their arsenal. IWM (track the Russell 2000 index) is another great fund that highly traded as well. There are many other Exchange Traded Funds that are quite popular. You may find various ETFs that track Silver (SLV), Gold (GLD), oil (USO), gas (UNG), etc. Special attention could be given to the leveraged funds that allow leveraging the portfolio and substantially increase potential profit.

Over the last couple of years emerging markets have become quite popular on the US stock market. EEM (covers emerging markets stocks) is in the top 5 most traded ETFs. Japan, Brazil and Taiwan are not far behind. Actually, these exchange traded funds (ETFs) are more popular than the DIA (tracks the Dow Jones Industrial index) at the current moment.

As you may see there is a great section of trading vehicles could be found among funds. There are not lot of reasons could be found do not trade them. They are traded in the same way the stock are. You may by them on margin, you may trade them short, you may buy and sell them during the trading hours, you may receive dividends on them, and etc. So, why to bother by research stocks when the research is already done and all you have to do just pick it up.

Article Tags: Exchange Traded Funds, Traded Funds, Exchange Traded, Invest Into, Stock Market, Emerging Markets

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