ETF Hound

Short ETFs are great new way to enable the average investor to get in on short selling stocks without all the hassle of knowing what the heck they’re doing. For some that can be bad, but for most it’s finally an easy way to get in on the action of making money even if the market as a whole is going down.

Exchange-traded funds are all the rage right now and for good reason. They trade on the open market just like shares of a company, but give you diversity like a mutual fund. The latest product in this ever expanding investment craze is the offer of “Short ETFs.”

Short ETFs are called such because they try to give the investor the opposite of the index or sector that they’re shorting. Seeking Alpha has an explanation of short and long funds straight from the CEO of ProFunds.

Basically, he says that having a fund of short sells on equities is a very risky practice. Instead, shorted funds through ProFunds tries to get the same effect by shorting futures contracts and swap agreements. Now I’m not exactly sure how that works, but it also sounds risky.

However, these funds seem to trend just as they should so who am I to think it sounds so difficult. One interesting shorted ETF is through ProShares and is the Ultrashort QQQ (QID). Now ultrashorts try to provide the investor with double the opposite of whatever it may be tracking, in this case, the NASDAQ 100. These can be a bit riskier and bit more erratic with huge moves from day to day depending on how the markets are trading.

Overall, these exchange-traded funds give the investor just another option to make money in any type of market, up or down.

Exchange-traded funds are huge right now. They’re easy to purchase, you can buy them just as you would buy any other share in a company. You don’t have to buy huge amounts, like with mutual funds where most companies, including Fidelity, make you sometimes spend a lot of money on these funds at one time to get in.

ETFs are easy and another company offering them, is Fidelity. Fidelity Investments offers over 600 ETFs for you to choose from. Across sectors, across indexes, across pretty much anything you can think of, even shorted ETFs, Fidelity has them.

A great tool they have for you to choose ETFs can be found at their choosing ETF page. This tool allows you to look in various sectors, countries, style, and capitalization. Just like you would choose a mutual fund based on how much risk you want to go after, or what sector, you can now choose your ETF that way.

The best part, you don’t have to plunk down the $1000 to get a few shares. You can buy a single share, using your online discount broker and sell them just the same. All that applies are your fees for your trade, whatever your broker charges.

ETFs are taking off. Fidelity Investments is in the game. Are you?

If you’re looking for a one stop shop of exchange-traded funds, then you don’t have to look much further than one company. That company is iShares. This company is one of leading ETF providers out there and has funds in all types of funds in all types of sectors.

iShares has silver ETFs and gold ETFs which have been helping push the precious metals to all time highs. That and all the turmoil in the stock market and us economy.

They also have leading market and sector exchange traded funds that will allow you to choose a whole sector at once without the need to buy many many equities. This can be great and enable you to diversify easily without having to sink a lot of money in things like mutual funds. The biggest challenge you’ll have is choosing which sector is hot right now and which isn’t.

A quick note on choosing a sector. A lot of times, by the time you here of a hot sector. It’s too late, and you miss out on the run up. Getting into an ETF allows you have less exposure to that one company you would normally have to choose in that sector. This can make any losses after a sell off have less of an impact on your bottom line.

More on this later…