ETFs are liquid baskets of securities that can be bought and sold on exchanges. They let investors buy entire segments of the stock, bond, commodity, currency and futures markets with one trade.

The largest and oldest U.S. ETF, SPDR S&P 500 (NYSEArca: SPY), recently marked two decades of trading.

“ETFs let investors diversify in ways that simply weren’t available 20 years ago,” said Jim Ross, global head of the ETF business at State Street Global Advisors. [SPDR S&P 500 ETF ‘Changed the Way Stocks Trade’]

“You can move in and out of the market; and if you are a chartist you can chart volume data,” Murphy added. “They trade just like a stock. Also, there are ETFs for every region of the world. By following 50 ETFs you can track everything in the world.”

Full disclosure: Tom Lydon’s clients own SPY.