The semiconductor industry is a critically important one and worth the consideration of every long-term stock investor. That said, if you conclude that you want to invest in semiconductor companies but don't know which ones to buy, consider plunking your money in a good exchange-traded fund (ETF) that's focused on semiconductor companies -- such as the SPDR S&P Semiconductor ETF (NYSEMKT: XSD).

First, let's define a term or two. If you're not familiar with ETFs, know that they are essentially mutual-fund-like investments that trade like stocks -- meaning you can buy or sell as little as a single share at any time during the trading day. An ETF's value will fluctuate throughout a trading day, as well, just like a stock's value will, while mutual fund values are only calculated once a day.

Each ETF contains a range of securities, as does a mutual fund. Many are broad-market index funds, tracking, for example, the S&P 500 index. Many others have narrower focuses, such as a particular region in the world, companies of a certain size, or companies within a certain industry -- such as semiconductors.

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Source Fool.com