|Diversifying with ETFs|
ETFs (or Exchange Traded Funds) are securities that track an index, a commodity, or a basket of assets like an index fund. However, unlike mutual funds, they trade just like stocks do. Therefore, the price of ETFs will change throughout the day, as they trade hands from one buyer to another.
When you purchase an ETF, you get the variety of an index fund, but the ability to sell short, buy as little as one share, and buy on margin. Also, for the budget minded, ETFs tend to be less expensive than mutual funds, although you will have to pay a broker when you buy and sell.