| ETFs — exchange-traded funds — have exploded in popularity in recent years. A basket of multiple companies, bonds or commodities, ETFs give investors exposure to a given sector, commodity or currency. It’s also possible to short sectors, commodities, etc. with ETFs. If you’re trading with the current trend, ETFs offer the potential to make a lot of money. They also tend to be less volatile than individual stocks.
However, you need to be careful not get caught in a trend change — when an index that has been moving in a particular direction suddenly changes course. You also have to make sure you’re not holding leveraged ETFs, ones that use financial derivatives and debt to amplify the returns of an underlying index, with high expense ratios for long periods of time...............................................Full Article: Source
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