Our Bottom Line

We believe ETFs can help contribute to your portfolio's overall return. As you allocate your portfolio's assets, ETFs offer diversification at a low cost. And a well-diversified portfolio is the key. ETFS are only one of many alternatives that you should consider, along with mutual funds and other investments weighted by your risk-reward comfort level, time horizon and your investment objectives.

A final thought: If you participate in a 401(k) plan, you may soon see a number of ETFs among your choices. Do your homework before you decide if ETFs make sense for you. Not all ETFs are appropriate for retirement plans where, generally, "buy and hold" is often the best strategy, especially for non-sophisticated investors. We recommend you leave the smaller, riskier ETFs to the traders and keep your focus on building your wealth over time.

For More Information

If you're interested in learning more about ETFs, we recommend a few web sites: www.morningstar.com, www.etfconnect.com and www.amex.com (the American Stock Exchange lists more than ETFs) are excellent sources of information. www.etftrends.com offers a free newsletter and lots of helpful ETF information and guidance.

XTF Global Asset Management ranks ETF funds on a scale of 1 to 10 based on factors such as tax efficiency, expense ratio and how closely a particular fund tracks its underlying index. Go to www.xtf.com and click on "tools and resources." You'll find lots of ETF information there including most active, gainers, losers, etc.

Learn more about investing wisely by clicking on any of the links below:

• Income Investor Alert
• Dolans' 10 Simple Rules of Investing
• Your Investing Mantra

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