"You Better Learn To Make Your Own Investment Decisions -



And Not Let Brokers Make Choices For You!"

This is a basic fact we have been preaching for years now.

Many times investors either blindly throw money at the

market or let a broker do it for them. With a little effort

you could learn to direct your investment accounts and

retirement funds on your own.

In this article we will point you in the right direction,

and give you a few crisis tips too.

An excellent alternative to mutual funds are the fairly new

Exchange Traded Fund (ETFs) vehicles.

There are ETFs that cover every sector of the market. ETFs

offer many advantages over mutual funds. Here are a few:

* Tax Advantages - (Even in your non-qualified accounts)

ETFs seldom sell any equity positions or create a taxable

event. Mutual funds often do this. With mutuals, you could

owe tax on part of the funds holdings (the winning stocks

they sell at a profit) even though you lost money over all.

A double whammy!

* Less Management Costs - Mutual funds were a great vehicle

at one time. Years ago, they were HOT, and many fund

investors did well. Then they started loading on the fees

and costs. Then came the so called "No-Load" mutuals. These

too became top heavy with many "Professionals" employed and

eating up GIANT parts of the profit. You might think of ETFs

as Electronically Traded Funds. MUCH less management costs (in

some cases no management costs) and the ease of trading

them.

* Diversification - Let's face it, this is what was

attractive about mutual funds to begin with. Instead of

picking out stocks on your own, you had "Professionals"

(with the meltdown we can see that most of them are not too

professional) putting together a diversified portfolio for

you. With ETFs, you can get the same if not better

diversification without the hassle of dealing with a mutual

fund giant eating up all the profits.

* Easy To Trade - With true mutual funds you can only get

out of a position After the market closes. You can trade ETFs

just like a stock in your discount brokerage account. If you

were locked into a fund when the market was in crash mode,

it was not a good feeling. Had that been an ETF you could

have bailed at any time (before the DOW closed down 777

points!)

We could go on with the benefits of ETFs, but you should be

starting to see the picture. An even better way to call your

own shots with your investments is to trade the index (or

indices for plural). We are referring to the mini Dow, the

S&P eMini, the mini Russell and others. (there are also ETF's

the mirror the indices such as "SPY" for the S&P 500 index)

While we focus on mini-Dow trading, any index will do. With

Index trading, you just follow the overall market up, or

ride it down with a short position.

While we are on the subject of shorts it would be good to

mention that while most US mutual funds are not allowed to

short a stock, you can actually buy ETFs that do good with

the market is dropping. One such fund is ticker "DUG" which

does well when the Oil price is dropping (a tip we gave our

readers after the big run up in oil to over $140 per barrel

- at the time of this writing it has been dropping since).

You can find other ETFs that do well in falling markets. So,

you don't have to short the market (statistics show that 80%

or more of investors never do short the market - but are

always looking for a upward bull run), you just buy the

right ETF and let it do the shorting for you.

By now, many investors see the importance of having a

strategy for making money when the market is dropping. Most

investors have yet to develop this strategy. We prefer to do

it with simple index trades. Whatever you do, find a way to

make your own moves and don't depend on someone else to

invest your money for you. No one will take care of your

money like you will!

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NOTE:

To learn more about ETF's visit Yahoo Finance and look under

the Investing Tab at the top of the page - then select ETFs

www.finance.yahoo.com

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