ETFs every investor should know


If you've ever delved into investing in ETFs (exchange-traded funds, basically entire indexes and sectors that trade like stocks), you're already familiar with the most popular, those being Powershares QQQ Trust (Nasdaq: QQQQ), SPDR Trust Series 1 (AMEX: SPY), Diamonds Trust, Series 1 (AMEX: DIA), iShares Russell 2000 Index (NYSE: IWM) and lately Financial Select SPDR (AMEX: XLF) and UltraShort QQQ ProShares (AMEX: QID). But have you ever looked into those that are much less followed, but more capable of yielding some big-time returns?

I primarily trade fun smallcap stocks, so until the past few days, I hadn't either. But when I began researching, I just kept finding more and more interesting ETFs -- it was addictive! Almost addictive as my new Twitter account where I've discovered I can chat with business legends, yesterday it was the founder of eBay Inc (Nasdaq: EBAY). Okay, maybe ETFs will never be that addictive!

Out the few hundred ETFs I looked into, here were some of the more interesting of the bunch:

I love perfectly uptrending charts so I honestly began blushing when I looked at those of iShares Lehman 20+ Year Treas. Bond (NYSE: TLT) and iShares Lehman 1-3 Year Treas. Bond (NYSE: SHY). Both are nice and steady conservative and solid-yielding; what's not to love?

Tired of being tied directly down to such a weak dollar, check out CurrencyShares Euro Trust (NYSE: FXE) and CurrencyShares Japanese Yen Trust (NYSE: FXY). Can you guess how their charts look? You have to hold these guys until the trend breaks and with the economy where it is, that doesn't appear to be likely anytime soon.

And then there's my favorite -- Market Vectors Agribusiness ETF (AMEX: MOO), not just because of the great ticker symbol, but because it's an ETF devoted to the agriculture industry. This is a hot industry so it's a much more volatile investment; but it's also a much safer way to invest in this niche instead of through wild smallcaps like Origin Agritech Limited (Nasdaq: SEED) and Converted Organics Inc (Nasdaq: COIN) or industry big wigs like Potash Corp. of Saskatchewan (NYSE: POT), Mosaic Co (NYSE: MOS) and Monsanto Co (NYSE: MON).

Whatever your pleasure, there's an ETF out there waiting for you and if not -- since ETFs are becoming so popular -- there soon will be.

Timothy Sykes writes the blog timothysykes.com, is a former hedge fund manager, star of the TV show Wall Street Warriors and author of the book, An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund. He owns no positions in any of the companies mentioned.

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Last updated: February 10, 2012: 09:52 AM

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