ETF

ETF Investing: Two Strategies

Stock quotes in this article:SPY, UNG, QQQQ 

In the past, I have emphasized important factors like liquidity, underlying securities and pricing . As the ETF industry grows, these issues become increasingly important.

Secondly, investors need to check for overlapping exposure. While funds may outwardly seem to have very different objectives, often they contain the same components in their underlying portfolios. Overlapping fund holdings can lead to pockets of concentration and unintentional overexposure.

-- Written by Don Dion in Williamstown, Mass.

A special note from Don: To put it simply, I want to help you profit from ETFs. You don't have to be an expert trader -- there are potential profits for investors at every level. And I think there's no better way to jump into the world of ETFs than my brand new service, TheStreet ETF Action by Don Dion. Membership is limited, so click here to get in on the action!

>To order reprints of this article, click here: Reprints

At the time of publication, Dion owned PowerShares QQQ, United States Natural Gas, iShares Dow Jones Select Dividend Index, iShares High Yield. amd

Don Dion is president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.

Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.

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