The GTAT example is a rollercoaster ride that took months to play out and offered numerous clues along the way for technical or fundamental investors to heed. By diversifying your risk across numerous companies using an ETF you would have avoided a great deal of pain in this trade.

The Information Technology sector ranks third out of the ten sectors as detailed in my Sector Rankings for ETFs and Mutual Funds report. It gets my Neutral rating, which is based on aggregation of ratings of 27 ETFs and 144 mutual funds in the Information Technology sector as of July 15, 2014.

Picking from the multitude of sector ETFs is a daunting task. In any given sector there may be as many as 45 different ETFs, and there are at least 181 ETFs across all sectors.