ETFs  (Exchange Traded Funds)  are one of the best investment vehicles of the present and future. 

1)  They trade like stocks.  

2)  Everyone can use them in their personal and retirement accoounts (buy only).
3)  They offer the advantages of specificity, diversity, flexibility, liquidity and lowest management costs.
     SPY (the ETF equivalent of owning all of the SP 500 index stocks) was one of the first successfully launched ETFs.  ETFs are replacing mutual funds.  It is SOMC's goal to highlight the significant advantages of ETFs, and how they can be utilized in a successful investment Portfolio.

THE  ETF:   

      An ETF (Exchange Traded Fund) trades identically as a stock trades.  An ETF can be bought and sold at any time, like every stock.  ETFs offer significant advantages over mutual funds, and from SOMC's perspective, there is no longer any reason to own any mutual fund.

ETF  Quintuple  win/win/win/win/win:

       1)   SPECIFICITY:  An ETF is a collection of individual stocks that represent a specific investment sector or index.  XLF is comprised of many financial stocks.  IYR is a broad selection of real estate stocks.  GLD and SLV directly represent the price of gold and silver.  SPY is a composite of all of the SP 500 stocks in one tradeable ETF, and tracks the SPX index.
       2)    DIVERSITY:  An individual can own a variety (hundreds) of ETFs representing various global sectors and indexes.  These cover the broad range of all major stock sectors, gold and silver, oil, bonds, utilities, currencies, agriculture and more.
       3)   FLEXIBILITY:  Since ETFs trade like stocks, they can be bought and sold at any time during the trading day anywhere in the world.  There are no limitations.  ETFs are ideal vehicles for timing trades on the long and short sides of the market, with or without leverage.  For IRA's that allow only the buy side of the market, there are many ETFs that profit from price declines (such as SH--buying SH results in a profit when the SP 500 price declines).  Thus, Bear markets can be as profitable as Bull markets.  Everyone can own them, and ETFs are ideal for both IRA and speculative accounts.
      4)   LIQUIDITY:  The ETFs that SOMC highlights trade at least several hundred thousand shares per day. Liquidity translates into value.  The spreads are narrow, and execution is nearly instantaneous.  There are no limitations for your ETF investments (such as withdrawl or trading frequency)--they are under your full control.
      5)   LOW MANAGEMENT FEES:  Once an ETF is created (a composite of selected stocks), it is low maintenance.  ETFs have the lowest management expense of any investment vehicle.  This is ideal, because management fees significantly erode investment performance over time.   All ETFs put your money to work safely, effectively and inexpensively. 

     The ETFs are numerous (hundreds).  As an initial sorting process, SOMC lists below some of the ETFs that it tracks daily, and have a daily trading volume of several hundred thousand shares per day, in broad categories.  The somc Portfolio diversifies into 3 primary Sectors.

SPECIFIC  ETFs  and  their SECTORS:

3/18/09

If you want to or can trade only one group of ETFs, somc  recommends the SP 500 group:
Buying these ETFs does the following:

SPY  Long  (profit from price rise)
SSO  Long,leveraged (x2)

BGU  Long

SH    Short (profit from price decline)
SDS  Short,leveraged (x2, profit from price decline)

(The above ETFs can be used in buy only accounts

Global Stock ETFs

EFA       Global Large Cap
EWA      Australia
EWC      Canada
EWG      Germany
EWJ       Japan
EWL       Switzerland
EWU      UK

EWW      Mexico

EWZ       Brazil
NYX       European Stock Exchange
EPI        India
VEA       Euro-Asia
VEU       Global without the US
VWO      Emerging markets
EEM       Emerging markets

Global Sector Stock ETFs

XLF        Financial
VFH        Financial
XLK        Technology
XLV        Health Care
XLY        Consumer Discretionary
IYT        Transportation
IYR        Real Estate
VNQ       REIT--real estate
PBW       Clean Energy
PHO       Water Resources
CNQ       Canadian Natural Resources
VNQ       REITs

Bond Sector ETFs

TIP        Bonds--Inflation adjusted
TLT       Bonds (20+ year)
IEF         Notes  (7-10 year)
LQD       Corporate Bonds (investment grade)

HYG       Corporate Bonds (high-yield)

BND       Total Bond Fund

Primary Gold/Commodity ETFs

GLD        Gold
SLV        Silve

JJC         Copper
USO       Oil
OIL         Oil
UNG        Natural Gas
EWA       Australia
EWC       Canada
EWW       Mexico
EWZ        Brazil
DBA        Agriculture (soft)
DBC        Commodities (hard)

Currency ETFs

UUP        US Dollar
FXE         Euro
FXY         Yen

 

SHORT  ETFs (gain value in falling markets)

SH          SP 500
SDS        SP 500 (x2)

BGZ        SP 500 (x3)

DOG       Dow Jones (x1)
DXD        Dow Jones (x2)
RWM       Russell 2000
TWM       Russell 2000 (x2)
PSQ        Nasdaq
QID         Nasdaq (x2)
TBT        20+yr Bonds (x2)
VXX        Volatility Index (mid-term)  

ETF    Exchange  Traded  Funds                                                                       Richard  Schulz