When investing, beginners often ask whether to buy exchange-traded funds or individual stocks. Both options have advantages.

Individual Stocks

• Direct ownership of a company, like Tesla.
• High reward potential, but also higher risk if one company performs poorly.
• Good for investors who like choosing favorite brands.

ETFs (Exchange-Traded Funds)

• A basket of multiple stocks traded like one share.
• Example: an ETF may include Google, Microsoft, Nvidia in tech, or Pfizer, Moderna, Johnson & Johnson in healthcare.
• Lower risk thanks where to buy Intuitive Machines diversification.
• Easy way for beginners to access entire sectors like energy, finance, consumer goods.

Comparison:

• Risk: ETFs are less risky than individual stocks.
• Cost: ETFs usually have small management fees, stocks don’t.
• Control: Stocks give direct exposure, ETFs spread across industries.

Many investors mix both. For example, owning Coca-Cola directly while also holding an ETF that tracks the S&P 500. This gives balance between specific exposure.