We're not seeing much change today in our opinion of the major indexes. I suspect this is the calm before the storm, and don't take the word storm as necessarily being a negative. It's simply another word for volatility and that is usually an environment to make money if you can cut out all of the media noise. The markets traded lower on the open this morning blaming weak retail sales for April. However, the major indexes made an attempt to move higher on some exuberance over lower than expected unemployment claims but have since reversed course as I type. Advertisement New Breakthrough Fuel Could Power Your Car It took the earth 300 million years to make the oil we burn. Imagine if we could squeeze that whole process into just a few months... a few weeks... or even a few days. Because that's exactly what could be happening. At least a half-dozen labs and companies are working on this, right now. If they get it right, we could literally "make" as much gas for your car as you need. We could make fuel for planes, trains, and diesel trucks this way too. Find out more by clicking here. Advertisement The truth is we've got a pretty valiant effort by the bulls right now to try and grind this market higher and they've got every reason to do so since it would likely ignite a pretty furious short covering rally. They're just not quite ready to throw in the towel and it shows with a fair amount of resiliency. Seems every time this market has tried to move lower in recent days, it's been met by a fair amount of buying but I'll say this... imagine an ice pick chipping away at a block of ice. If you keep chipping away, eventually it cracks. Personally, I'd love to see this market pull back some more as it will provide an opportunity to pick up stocks on the cheap and position for a good back half of 2012. Too soon to tell but whoever wins this tug of war right now is likely going to control the trend for at least the next few weeks. The last hour of trading today may be an indication of what this market wants to do over the next few days, so we'll have both eyes fixed on that last hour. Some ETFs are Worth their Weight and Some are for Suckers. Wikipedia defines ETF’s as investment funds traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs track an index, such as the S&P 500 or NASDAQ 100. ETFs may be attractive as investments because of their low costs, tax efficiency, and stock-like features. Well done Wikipedia! However, there's a lot more to ETFs than meets the eye. The single most important thing to understand about ETFs is that not all ETFs are the same... even when you assume that all ETFs consists of different assets. You have what I refer to as straight ETFs, which simply track the asset basket of its holdings and then you have leveraged ETFs which do the same but their underlying mechanics are tied to the options for its basket of holdings. Huge difference there and this is something I suspect most average retail investors do not understand. I'll cover more on this in a bit. For someone who doesn't have the time to spend on selecting individual stocks, straight ETFs can be of value. They are a great way to create a nice diversification of exposure to a number of different stocks all within the purchase of a single security. However, my experience has taught me that you're not going to generate above average returns in the market simply by purchasing major index ETFs. It's more of a slow and steady approach to investing much like what a major index provides in terms of returns for a year. Most ETFs are never going to provide the kind of astronomic returns you will find by being in the right small cap stocks but they can be a nice addition to a speculative portfolio. There is one exception here to straight ETFs. If you can identify a hot sector early and get into the right ETF, you can most definitely outperform the market as a whole. Tech and biotech both have been on fire of late thus providing better returns than that of your major index ETFs. Bottom line? If you're happy with what the major indexes will give you in a year, then the major index ETFs are for you. If you're looking to beat the market modestly in a year, then be selective about which sector ETF you're putting your money into. Leveraged ETFs on the other hand are probably the most misunderstood. A leveraged ETF will typically offer two to three times the return of a basket of assets than your typical straight ETF for the same basket of assets. However, like everything else in the market, there's a flip side to the story. What most investors don't understand is that leveraged ETFs are tied to the options market like I explained above. This is extremely important to understand because like with options, leveraged ETFs erode over time. Simply put, if the index moves nowhere, the leveraged ETF will move lower over time. Just like options, leveraged ETFs should be viewed as extremely short-term vehicles. Play them to scalp quick profits, get in and get out. If you hang on to a leveraged ETF for an extended period of time, there's a good chance you could have exposed yourself to much less risk and still excellent returns elsewhere. Don't get sucked into believing that by investing in a leveraged ETF that your money is conservatively positioned to generate above average returns without a fair amount of risk. Advertisement Something Very Big Will Happen in America Within The Next 180 Days! It will touch Americans deeper than anything since the Great Depression. It will hit like a brick wall. Most people will not like what we have to say until they see the facts in this controversial new video. Our first five predictions have already come true. Fail to heed this financial warning at your own risk! Click here to see this video here now. Advertisement Just my two cents, but if I'm going to maximize short-term money, I'm going to play the options or small stocks and not a leveraged ETF. Once you dissect the built in fees and costs that the ETF backer generates out of leveraged ETFs along with having them tied to the options of the assets, I don't think there's much value there. I'm open to debate but you're going to have a pretty hard time getting me to buy a different story. So, are ETFs for suckers? Straight ETFs no, as long as you're ok with modest returns. No as well if you're in a hot sector ETF that represents a hot pocket of the market. However, if you think you are going to generate above average returns without too much risk by purchasing leveraged ETFs, then I think you're a sucker. Remember, as long as you understand that leveraged ETFs erode over time, then at least you know what you're truly dealing with. Just like I don't buy options as a long-term investing strategy, I would most definitely not do the same with leveraged ETFs.