The Nasdaq Stock Market announced Thursday that trading volume on ETFs reached a new record in September with an average daily trading volume of 785 million shares. That was part of a new record trading volume of 3.3 billion shares.

IndexUniverse says that ETFs now make up more than one-third of the U.S. market trading volume. They cite data from the National Stock Exchange , which says ETFs represented "a record 35% of all U.S. equity trading volume." That's up from 31% in August. Think about that: more than one-third of stock trades in America are for exchange traded funds.

Trim Tabs just came out with a report showing investors have been pulling money out of stock funds -- but throwing them into ETFs. Trim Tabs estimates investors took well over $40 billion out of all mutual funds in September, but meanwhile put about the same amount into ETFs. For the last 12 months, we've pulled $117 billion out of mutual funds and put $127 billion into ETFs.

For individual investors, the move makes sense. When the market is moving around like it has been, it's scary to be in a vehicle where you can only trade at the end of the day? But I can't imagine that all of that ETF volume isn't helping whip around the prices of the underlying shares.

The private equity scene in the US continues its freeze. So many firms are looking for opportunities overseas, especially in Asia. For example, according to a piece in The Wall Street Journal, TPG is finishing up its deal to buy a 43.4% stake in NIS Group, a Japanese lender.

Interestingly enough, it looks like JP Morgan (NYSE: JPM) wants to jump in too.

The firm announced that it has plowed $750 million into a new fund that's focused on Asia. The main principals of the fund, Varun Bery and John Troy, are the folks who built TVG Capital Partners, which has extensive experience in Asia.

Here's a novel idea: Pay someone only if they are providing better performance than no one -- not anyone, no one -- could provide.

Well according (subscription required) to The Wall Street Journal, the California Public Employees Retirement System (Calpers) is contemplating doing just that with the money managers it hires: "Calpers' investment staff plans to present to the board a system in which the pension fund's global stock managers would receive a fee only if they outperformed certain benchmark indexes. Managers whose returns failed to beat the index would be paid nothing for that period."

This makes perfect logical sense. Why pay a management fee to someone who's doing worse than an index fund? But the possible risk is that paying strictly for performance would induce managers to take bigger risks -- possibly increasing the incidence of blow-ups and rogue traders.

But these kinks could probably be worked out with careful monitoring of risk, and tailoring the bonuses to the level of risk a manager assumed. But it's time for money managers to be paid for performance. Too often, it seems they are paid just for having a pulse.

The conventional wisdom is that stocks have an upward bias at the end of each quarter.

The usual suspect? A last-ditch mini-buying spree by fund managers looking to temporarily boost the value of equity portfolios -- and their calculated returns -- as the three-month reporting period comes to an end.

However, based on the trading pattern during the latter half of June over the past two decades, it would appear that the conventional wisdom might be something of an urban legend, at least with respect to the second quarter of the year.

During the period from 1986 through 2006, the S&P 500 index has been down 55% of the time, or 11 out of 20 occasions, from June 15th through June 30th. The median return over the span has been a loss of 0.44%.

Of course, this time around the stock market could end up doing well over the next two weeks, but history suggests that might not be the best way to play it.

Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle: An Insider's Guide to Successful Investing in a Changing World.

The investment world is abuzz regarding the thoughtless verbal spillage of Stop Trading!, Jim Cramer. First, I'd like to make one major change in my stance on the man. It is without extraneous humility that I submit I can call him Jim now and I'll no longer be constrained to calling him Mr. Cramer. He has taken a lower position in my catalog of respected individuals. I'm not any better than I ever was. But Jim just got worse than he's ever been.

It's not that I find his market manipulations especially unpalatable, those things are done every day. It's called journalism and if creating a reaction wasn't the basis for what we do, then why do it? However, if in fact Jim deliberately scuttled his own true opinions on a stock or fund in lieu of presenting convoluted information as the means to attaining a goal, then his words of guidance mean nothing to us. His recommendations would be nothing more useful than the obtrusively grating sounds of finger nails on a chalk board.

I'm not qualified to say if Jim's value manipulations for his own gain were wrong but if he shared his dubious intent with others prior to warping the record, then he most certainly has affronted the law. Already, Jim's entourage is suggesting that Jim should offer his services and insight to regulators to help curb the problem. Yeah, and murderers should help design safer guns.

The tongue is like a consuming fire which, when left uncontrolled, shall leave massive destruction in its wake. See what a large fire such a small spark has made. Jim's days as a guidepost to the time-constrained investor have just been greatly reduced. Watch for his ratings to plummet. In the light of his lack of ability to keep his market dealings straightforward and subject to the same forces as the rest of us, I will make my strongest investment suggestion of the week:

Short Jim Cramer now!

Picking stocks is fun. It's exciting. It can be very rewarding over a short period of time. Better yet, it can give you bragging rights at holiday parties.

Buying and holding mutual funds has none of those benefits. But it can be quite rewarding over the long term and is a very affordable way to invest. (For more on this, see, "Top5 Low-Cost Mutual Funds."

There are lots of great reasons to make mutual funds the core of your portfolio. Here are seven to consider:

1. Funds are easy. Never invested before? Just call your favorite discount broker or no-load fund company (Vanguard comes to mind), tell them you want a good solid fund for your first investment (large-cap growth or S&P Index funds are good options for first-timers) and they'll hook you up. No muss, no fuss. You'll be investing before you know it.

2. Funds are cheap. Think about it: Buy a no-load fund with a very low 0.15% expense ratio and you can invest $1,000 a year, including all trades and administration fees, for just $15 a year. And you thought stock trading for $7 a trade was cheap! (Warning: Not all funds are that cheap.)

3. Funds are professionally managed. Okay, so actively-managed funds don't typically beat the S&P 500 and usually have much higher expenses than index funds. But the best fund managers often beat the market. And you get the benefit of knowing that if the market starts to tank or a major blue-chip stock goes down the tubes, there is a real person at the helm who might be able to sell ahead of the pack.

4. Funds don't implode. Put another way, funds are diversified. That simply means that you get the protection of owning about 50 stocks, hopefully in an assortment of different sectors, so your risk of having one stock-specific disaster decimate your portfolio is minimized.

5. You can always have fun with stocks on the side. Once your core portfolio is buttoned down with stable, diversified growth funds, then you're free to use long-term conservative and short-term speculative stock-picking to add some excitement to the mix -- without having to worry about screwing things up too badly.

6. ETFs. That stands for exchange-traded funds. They are index funds that trade like stocks. So you can enjoy the excitement and tax advantages of trading stocks, while getting the low fees and diversification benefits of funds.

7. Funds are fun. Okay, they may not be as fun as owning stocks. But the best fund companies will make you feel like part of a smart, exclusive club. If you're lucky, your fund manager may even write entertaining newsletters and show up in magazines now and then. Most important, good funds have consistent long-term positive results. You may not feel much like bragging about earning a steady 10% a year. But you'll certainly be able to pat yourself on the back for a job well done come retirement.

When it comes to getting started in stock investing, many of us (myself included) look at the volume of information that's available and instantly become nearly overwhelmed with the sheer magnitude of it all. There's so much to learn about the markets. There are so many directions one could go. How does a person who just received a $2000 windfall take that money and invest it for himself or herself? How to find a broker? How to create and diversify a reasonably safe portfolio? There are a million questions that can be asked. Where are the answers and how much information is actually necessary to learn to make a safe start? I don't have that $2000 windfall to invest but I have that desire so I had a look around and I found out about investment clubs.

Investment clubs are kind of like mini mutual funds. They can be a very small coalition of amateur investors who have pooled resources to buy stocks and create a portfolio, or they can actually be groups that become large enough to form their own limited liability corporations. The magic lies in the fact that they don't have to bear the management fees associated with true mutual funds and the members most often vote on the choices of stocks their money will be invested in. This significantly reduces operating costs and helps small investors realize better returns from their invested funds.

Members of investment clubs have some serious advantages over the small investors who try to do it alone. They get input and support from the other club members. They get the benefit of a wide range of investment viewpoints. They get purchasing discounts through the increased volume of each stock purchase they're involved in and they get the comfort of knowing that there are other investors who are willing to take the same risks they are. It's a team concept and some people have gotten very wealthy utilizing it.

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5 Stocks That May Be Overstuffed TurkeysWith Thanksgiving dinner just around the corner, it's time for our list of well-known stocks that may be too richly valued. These include Tenet Healthcare, Interpublic Group, Amazon.com, MedImmune and Yahoo.
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Look at My Ad and Get Free Airline Miles
Road warriors now can log extra airline miles by sitting still to watch ads on the Web. On Wednesday, Web start-up e-Miles introduced a venture that lets consumers earn miles on Delta, Continental, Northwest and US Airways by watching ads online and answering follow-up questions about those messages.
Starting soon, companies will 'pay' you airline miles to look at their ads - USATODAY.com