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Investing in ETFs

If you want to go for long term investment in equities without taking much risk then you can go for ETFs or Exchange Traded Funds. An ETF invests in stocks that are constituents of an index. If you feel that investing in equity market is not safe then ETFs offers you flexibility of a stock and protection of a fund. There is a wide range of ETFs you can choose from. For example, stocks, bonds, real estate, commodities, currencies etc. ETFs allows you to diversify your investments. If you were planning to invest $5000 in buying stocks then with ETFs you can diversify your portfolio and break down same investment amount into three like $3000 into S & P Depositary Receipts and $1000 each into gold ETF & Euro ETF. However the major disadvantage with ETFs is the brokering charges. Brokers can charge up to 10% per trade which is a huge amount.