An ETF is an equity investment. Constructed to track a commodity, index, market sector or basket of assets, it's a fund that's traded in the same way as an individual stock (that is, its price changes throughout the day as shares are bought and sold; mutual funds' shares have their price set once a day). Whether you're new to investing or not, an index fund is a great asset to add to your portfolio. It takes a little time to find the right index fund for you, but once you do, you can sit back and If you have five to 10 years, more would be even better, the best single index fund to invest in is QQQ. Over the past 10 years it beat SPY by two to one, and over 20 years, three to one. Over the last 30 years, 37 to 8. The idea of diversity for safety is a canard.