ETFs vs Stocks: A Beginner's Perspective

Newbie Investors
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Content creator here! Helping newbie investors.
Just sharing what I have learnt while investing. Feel free to ask questions or add your thoughts.

When I started investing, I couldn’t decide between ETFs and individual stocks. Here’s what I’ve learned:

ETFs (Exchange-Traded Funds):

  • Pros: Diversified, lower risk, and good for beginners who don’t want to spend time analyzing individual companies.
  • Example: If you invest in SPY or VOO ETFs, you’re essentially buying a slice of 500 top US companies.
  • Cons: You won’t see massive growth like you might with a single stock.

Individual Stocks:

  • Pros: High potential for growth if you pick the right ones.
  • Cons: Higher risk, requires research, and you could lose money fast if you don’t know what you’re doing.

My advice? Start with ETFs and slowly venture into stocks once you’re confident.

2 Likes
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This is solid advice! I jumped straight into stocks when I started, and let’s just say I learned the hard way :melting_face:. ETFs are definitely a safer way to learn the market.

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Would recommend adding some international ETFs like VXUS or sector based ETFs if you want to diversify further for beginners.

Any beginner-friendly stocks you’d suggest?

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Hi Karan, good suggestion. Adding sector based ETFs is better and safe for beginners. I’d recommend checking out ETF providers section (browse tab in Vested App) to see the options you can invest in. Selecting sectors like EV, healthcare, defense and diversifying even across different providers is a good strategy.

You can take a look at this thread for stock recommendations that people are watching yet.