Are ETFs a Better Investment Than Stocks? 3 Things to Know Before You Buy
When it comes to investing in the stock market, buying individual stocks is perhaps the most well-known way to build a portfolio. But exchange-traded funds (ETFs) are another popular option -- one that often comes with less risk and far less effort.
An ETF is a bundle of securities grouped together into a single investment, with each fund tracking a specific stock market index. An S&P 500 ETF, for example, contains stocks from all the companies within the S&P 500 index itself. If you're looking for a simple, straightforward way to invest in the stock market, ETFs can be a fantastic choice.
They do have their drawbacks, however, and they're not the right fit for all investors. If you're on the fence between investing in ETFs and individual stocks, there are three factors that can make it easier to decide where to buy.
Source Fool.com
