Judging from the current situation, buying ETFs and stocks has its own advantages and disadvantages. Let's first understand the advantages and disadvantages of buying etf, and then understand the advantages and disadvantages of buying stocks.
Advantages and disadvantages of purchasing etf
Advantages: etf is also a transactional open index fund, and its transaction price and fund share net value trend are basically consistent with the tracked index. Therefore, when you analyze, you only need to analyze the industry represented by etf, which requires low investment analysis ability and low risk for investors. In addition, compared with buying and selling stocks, buying ETFs is free of stamp duty and the cost is lower.
Disadvantages: Since etf closely follows the index trend, the fluctuation will be lower than that of individual stocks. If investors have strong analytical skills and can buy leading stocks, then choosing to buy etf will miss the opportunity.
Advantages and disadvantages of buying stocks
Advantages: Individual stocks fluctuate greatly and are easily affected by some special factors. Therefore, if investors can buy before the stock price breaks out, they will get high expected returns, which is difficult to do when buying ETFs.
Disadvantages: buying stocks is risky and requires investors' investment ability. Once the stock selection is wrong, it will produce relatively large losses.
Tips: Investment is risky, so be cautious when entering the market.