The System Part 1 Secuirties

I will lay out my system over several posts. It is easy to use once you have all the components. It is also very easy to stick to once you understand the whole picture.

The first part to learn is about securities I use. The only securities I trade with are ETF's. An ETF is simply a basket of securities that gives the instant diversification of a mutual fund with three distinct advantages.

1. They trade all day like a stock.
2. They have significantly lower expenses than mutual funds.
3. Most Exchange Traded Funds have options that trade with them. This will be a HUGE benefit for one of my later posts. Stay tuned for the details.

The other key part of my ETF strategy is liquidity. There are dozens of ETF's out there, but only a handful have the liquidity I need for this strategy. My favorite ETF's for liquidity are the S&P Select Sector SPDR's. They give you exposure to specific sectors of the S&P 500 without the single stock risk. Until next time..