Exchange-Traded Funds for Buying Dips.

Tech investors who've been "buying the dips" for the past year may have been buying it with Qubes. A Qube is a stock whose ticker symbol is QQQ and mimics the price performance of the top 100 Nasdaq stocks.

As the tech and dot-com stocks crashed, Qubes looked ever more interesting. Investors could fish for what they hoped was a market bottom without having to guess whether Amazon, Microsoft or Broadcom was now "cheap enough."

The amount of buying and selling in Qubes has risen to more than 97 million shares a day, compared with an average of 46 million for the year as a whole. For dedicated Nasdaq lovers, Qubes are a smart way to go.

Qubes belong to a new group of securities known as "exchange-traded funds" or ETFs. They combine the traits of stocks with the traits of index mutual funds.

Here are some of the differences between ETFs and mutual funds:

* You can trade an ETF at any time during the day, at whatever its market price at the time. That makes it a good vehicle for active stock traders. You can also sell it short (that's a bet the price will drop) or place a limit order (an order to buy or sell at a particular price).

* An ETF is a stock just like any other stock. You buy through a broker or your online brokerage account, for whatever commission or fee is normally charged. Every time you make a new purchase, you pay a new commission -- so ETFs are costly for people who add money regularly.

* ETFs charge lower annual expenses than mutual funds do. But when you add the sales commission or fee to the annual expenses, ETFs might cost more than comparable index funds.

ETFs that follow the same market index will also have taxable gains, but they might be a little smaller. Of course, you always owe taxes when you yourself sell shares at a profit.

If you want to buy into a broader index, such the S&P 500, a low-cost index mutual fund will make more sense.