ETFs or Exchange Traded Funds can be defined simply as a stock of stocks. They can represents a basket of stocks based on geography, market capitalization or industry. Investors just starting out in the market would do well to invest in ETFs. Following are the ETF's I like and why:

PBW - This one focuses on Alternative Energy including hydrogen, fuel cells and solar power. Due to the nature of its holdings, I think this is the riskiest one on this list, however, I expect stellar returns from it over the next 6-12 months.

PHO - Water is still more expensive than gas at the pump - drinking water that is. Boone Pickens, the famous Texan who predicted oil would hit $70 per barrel, has recently started investing in Water. Water pumps, filtration and distilleries are what makes this ETF most exciting.

ADRE - This one recently came up on my radar. I have been a loyal prescriber to EEM, its counterpart, which has treated me well over the years, but ADRE has provided higher returns consistently. Both EEM and ADRE are Emerging Markets ETFs. They focus on countries like China, India, Russia, Brazil etc. In a global economy, "third world" countries are rapidly moving towards free markets and capitalism. Individual economies like Austria, Belgium, Mexico, Brazil and South Africa have done exceptionally well over the last 3 years with astronomical annualized returns. However, investing in one economy goes against the principles of diversification and any unfavorable geo-political developments could seriously hurt these markets. That is why, an investment in Emerging Markets ETFs is a sound strategy.

ILF - This is a regional ETF, specific to Latin America. Mexico, Brazil, Argentina, Chile and other markets in South and Central America provide the juices for this one. All these countries have an abundance of natural resources and will continue to do well.