Personally, I think you don’t need to buy stocks, but you must buy ETFs, especially for inexperienced retail investors. ETFs are very suitable for fixed investments, at least there is no stamp duty, and the cost is much lower than ordinary funds and stocks. Moreover, the risk is relatively low, and you will not miss out on the market because of choosing the wrong stocks. As long as the market rises, ETFs will generally rise. Of course, there are many industry ETFs, and the specific situations are quite different. Therefore, I think that for retail investors, buying ETF index is better than buying stocks, and the longer the investment time, the more obvious this effect may be.

1. ETF transaction costs are lower.

As we all know, if you sell stocks, you have to pay stamp duty, but if you trade ETF indices, you don’t have to pay it. You know, the stamp duty rate is very high, one thousandth. In other words, for every 10,000 yuan of stocks sold, 10 yuan will be paid. As far as I know, retail investors trade very frequently. You can use trading software to export your own delivery orders, and you can easily find out how much of your trading profits this cost will eat up every year.

2. ETF delisting risk is low and has its own diversification properties.

ETF is essentially an index fund, and its delisting risk is relatively low. In addition to the broad market index, there are also various industry ETFs, which are enough to meet the diversified needs of investors. Unless the total size is too low, ETFs will generally not be liquidated and will not be delisted. In contrast, against the background of accelerated implementation of the registration system, the delisting risk of individual stocks has increased significantly.

3. ETF has the characteristic of eliminating the weak and retaining the strong.

The continued rise of fund group stocks in 2020 once again illustrates the characteristics of the stock market: "The strong will always be strong". However, due to the lack of willingness to cut off the flesh, retail investors cannot hold on to stocks with floating profits, and it is easy for them to hold on to them. There were a lot of locked-up stocks, but the stocks that doubled were sold out. In contrast, ETFs are index funds, and the index adjusts positions regularly, which naturally cleans out the weak stocks, leaving only the strongest stocks.