Padovanoc

When you look through the world of investment options there are many different ETF products to choose from. An ETF that always intrigues me is the MLP based Natural Gas ETF, it is a liquid trading vehicle with plenty of volatility. For every great ETFin existance however, there is another one that sucks. The ones I avoid now are alot of the short and / or leveraged short funds because of performance lag. The leveraged volatility etfs are almost impossible to make money with unless your timing is perfect. For the everyday non-professional trader to profit from instruments like these would require a miracle. It’s puzzling why some of the highly leveraged ETF / ETN products haven’t met with more regulatory restrictions. Now back to the good stuff, there really are some excellent benefits to a good ETF. You should stay away from the natural gas etf that uses futures contracts for exposure, stick with non-leveraged, physical commodity ETFs or the ones that invest in commodity stocks. Another good example of this is investing in the oil stock etf (xle) instead of USO, over the long haul the stocks always beat the futures. So if oil investing is appealing to you the stock based funds are the way to go. As a rule, always look for ETFs that hold actual commodities (gold,silver,copper etc) or stocks of producers instead of futures contracts & you will be fine. If you are interested in an ETF that tracks a stock market index the same rules apply. It’s always best to make sure the ETF holdings match 100% with the ones found in the stock index it’s tracking, avoid the ones that use futures instead. The popular Nasdaq 100 ETF – QQQ – has done a great job of tracking the Nasdaq 100 since it’s inception. This is just one of many good options for investing, the main thing is to do a little research. I always go look at historical charts in order to see how it’s performed relative to it’s benchmark. I like to go back right to when it started trading to see the full picture. Many times you will see patterns when looking at history and that can help you make better decisions. The goal is to find instruments that can match the index minus fees and expenses. If you are a Buffet style investor you will definitely want to choose Vanguard or other ones that have the lowest fee structure. The cost of daily re-alignments in the leverage funds tends to jack up trading costs and is another reason they tend to do poorly over time. A combination of no financial leverage, low expenses and good performance history vs. it’s target is what to look for in a winning investment!