Well, exchange-traded funds or ETFs are a unique type of security that is part-stock and part-index. It can represent shares in hundreds of companies, yet they can be traded at any time during market hours and can be bought in amounts as small as one share. You can check out more information online on this site. However, there are a few things to keep in mind if you want to invest in ETFs, they are:

1)You must first think about the role ETFs will play in your portfolio and do remember that there are lots of foreign ETFs to choose from as well.

2)Then approach your broker with the exact number of ETFs you want to buy. As you have to pay a broker’s fee every time you buy or sell this type of security. Commission is the same no matter how many shares you’re buying, thats why sometimes small trades can cost you more than you’ll make.

3)To help protect your investment, set, buy, sell and hold orders on your ETFs. Just like in stocks, you can also tell your broker to automatically sell your ETFs if they drop below a certain value.

4)You can diversify your ETF investments. You cannot more than 15 percent of your money invest in one industry and a maximum of 10 percent of your total investment income put into any single ETF. As, these limits are standard for managing portfolio risk, but still you can exceed them, sometimes.

5)Must investigate the contents of each ETF before you invest. As you can usually get a detailed breakdown of the contents by visiting the issuer’s website or reading the prospectus. So, always stay alert.