Preferred BEST!

I recently pulled the trigger on this great Exchange Traded Fund (ETF) that I recently discovered from an article I read on Morningstar.com. The article pretty much sums it up on why I invested in the Powershares Financial Preferred Portfolio ETF (PGF). I really wanted to get into the financial sector since it's dropped so heavily, but was fearful about more negative news and as a result more downward sloping charts. PGF basically hedges me against that since it purchase preferred stock.*

*Preferred stock is basically a stock that acts like a bond. If a company were to go bankrupt, bondholders would be paid first and then preferred stockholders. Common stockholders would be last, and normally they get paid ZERO.

So why an ETF? Choosing which company would pull through this U.S. mortgage crisis is like throwing darts at a dart board! Fortunately PGF hedges me against that. Yes, the gains may not be as great, but ETF significantly lowers my risk and may still return some decent gains as long as the overall sector does well. Also, the low expense fees (compared to that of most mutual funds) is niiiiiiice.