Stock Market

In addition to index mutual funds, you can now purchase and hold index funds that trade on an exchange (like closed-end funds). ETFs have grown like crazy since their introduction several years ago. Fund expenses are low, if not lower, than those for index mutual funds, and you can buy or sell at any time during normal trading hours. In contrast, regular mutual fund shares can only be traded after closing prices are reported. They work best, however, in a buy-and-hold mode because you do incur commission costs every time you make a trade. If you can minimize commissions and are not a compulsive trader, ETFs are an excellent choice.

SPDRs

Think healthcare stocks are poised to outperform the broad market? Maybe you like retail, instead. Now, thanks to an ETF known as SPDRs, you can instantly purchase a particular sector of the S&P 500. As of this writing, there were nine Select Sector SPDRs available:

SPDR