You’ve got to diversify your stock portfolio, right? The downside is that having many positions in the stock market is difficult for newer investors. However, there is another option and it’s a great one. It’s called exchange traded funds and you’re world is about to get better once you realize their financial investing potential.

I’d estimate that a low amount of investors actual know what ETFs are . I will assume you’ve maybe know a little bit but are unsure of how they work and how to take action.

You might be thinking Mutual Funds in your head right now , and exchange traded funds are kind of similar, but greater. The thing is, ETFs trade just like stock. You can buy/sell/trade them as you wish . But they are far more powerful .

When you invest in an exchange traded fund , you really get a basket of stocks . For instance , you might buy an ETF that’s an indices . Rather than researching tons of stocks and having many financial positions, you can buy one ETF you’re set . Again, you can buy and sell them exactly like stock. I love it and I hope you’re feeling it too.

I’ve traded exchange traded funds for years and I used them to diversify in the gold, oil & gas, etc markets. You can even invest in entire indices, like the Dow 30 , with a single ETF .

What I like most about exchange traded funds is the instant diversification effect. With a single action , I get a plethora of related stocks. Imagine you want to profit on real estate boom . What stock do you go with ? What if many companies have lots of potential? Do you buy them all? Why bother? Simply buy a good ETF that has multiple companies in it and you’re done . It’s simple.

Honestly, I didn’t think about buying exchange traded funds initially . I thought of mutual funds, and I don’t like those. But then I discovered what they were and how they operated. Being able to trade them like stocks as I wished was the big selling point. No load fees, management fees and other nonsense . It’s a standard stock trade.

And what really sold me on them was the ability to control market segments and profit from it. Gold was heating up so I quickly sunk part of my portfolio into a good gold exchange traded fund and slept well at night while it went up and up.

Soon after you get rolling with exchange traded funds , you might never want to buy individual stocks again. Personally, I like to mix it up. If stocks are very important to you , exchange traded funds can be used to quickly control a market segment that’s missing in your diversification plan , which can free up your capital for other investment opportunities .

Just in case you missed it, exchange traded funds can be traded just like stocks. Like stocks, you get stop-loss, market and limit orders with them. And yes stock enthusiasts , you can even short them! I hope you see how great ETFs are now! Before jumping in, I’d encourage to read up a little more and then go out there and enjoy your newfound investment option.