ETFs or Common Stock
Lesson summary:
In this lesson of the asset allocation course, the topic of discussion is whether to invest in individual stocks or ETFs (index ETFs). Investing in individual stocks gives you full control and has a positive spillover effect into one’s professional life, with the potential for higher returns. However, it can also be time-consuming and stressful. On the other hand, index investing through ETFs is low-cost and stress-free, with a well-diversified portfolio of some of the best stocks in the market. However, it may not offer the high returns that individual stocks can bring. The most popular index is the S&P 500, which is made up of the 500 biggest public trading companies in the US. It is important to note that just because a company is in the S&P 500, it doesn’t mean it is the best or most profitable company.