Over the past decade there have been hundreds of new exchange traded products that have come to market. One of my favorites is the Gold ETF, there has been plenty of movement the past few years. For every great ETFin existance however, there is another one that sucks. Performance lag has been especially noticeable in the leveraged short area, some are actually scarey bad. The inverse volatility etf XIV is one that I personally lost money in despite being right. I would like to tell average investors to please steer clear of these because they are not investor friendly. It seems that once more the regulators are asleep at the wheel. Overall however, I have to believe that ETFs allow average traders access to many more markets. You should stay away from the natural gas etf that uses futures contracts for exposure, by investing in physical commodity ETFs or the ones that invest in stocks of commodity companies. If you look at most oil stock ETFs (XLE, XOP, OIH) and compare it to a futures based Oil ETF, over the long haul the stocks always beat the futures. Therefore, if you are interested in investing in oil focus on the oil stocks. If you look for stock based commodity ETFs or physical commodity ones you will do best. The same assertion is true when you look at exchange traded funds that track stock indices. I always look for funds that hold the actual stocks that are found in that particular stock index, avoid the ones that use futures instead. The popular Nasdaq 100 ETF – QQQ – has done a great job of tracking the Nasdaq 100 since it’s inception. However, this is just one example of many excellent investment vehicles, with just a few minutes of online studying you can easily pick out the good ones. I always go look at historical charts in order to see how it’s performed relative to it’s benchmark. There’s no better way to judge a financial instrument than comparing to what it’s tracking. You can see how it performs relative to the underlying in both bull and bear market trends which is good to know. Due to trading costs and administration fees it’s normal for ETFs to do slightly worse than the underlying over time. This is why it’s important to pay attention to management fees when looking at potential holdings. Frequent trading costs are another reason the 2x or 3x funds tend to under perform as they have to re-calibrate every night at the close. By focusing on plain vanilla ETFs that minimize their expenses, avoid leveraging and have good past performance you can win at the investment game!