Think of Exchange Traded Funds like mutual funds that are traded like a regular stock. A bundle of stocks, commodities or even other ETFs - exchange traded funds have taken on a life of their own - not unlike the explosion of mutual funds in the 80’s and 90’s (did you know that there are more mutual funds than there are stocks traded on the NYSE, NASDAQ and AMEX?). Today, you can find ETFs that follow defense stocks, energy stocks and even gold - not just gold stocks, but the actual commodity gold.

This is where Financial Rebel - a financial investing blog - comes into play. As new ETFs - and there are new ones everyday - appear on the market, Financial Rebel is talking about them and describing the advantages and potential downfalls for these ever evolving instruments. For instance, ETFs can make it easier for people to play in markets that they would never have attempted before the creation of some of the more exotic ETFs - like ETFs for gold - the commodity - where Financial Rebel has this to say about the gold ETFs:

Of the five I reviewed, GLD is the strongest and has the most potential. All five gold-oriented ETFs I looked at lost money in the past month, but GLD only lost 1.33% and it’s been coming back over the past week.

This is one of those situations where investors are given more flexibility to risk their money, whereas investing directly in gold is a bit more difficult (and certainly more expensive, because you are generally buys gold bars - which need to be stored - and that costs extra money). With ETFs, the investor can call one broker to purchase gold ETFs, regular stocks and industry ETFs. Ultimately, more options for investors is a good thing and provides a more liquid market - which is better for everyone.