Stocks vs. ETFs: Understanding the Key Differences
The difference between a stock and an ETF is like the difference between a can of soup and a whole grocery store. When you buy a stock you’re investing in a single company — Apple for instance. When that company does well, the stock price goes up and so does the value of your investment. When it goes down? Yipes! When you buy an ETF (which stands for Exchange-Traded Fund) you’re buying a whole collection of different stocks (or bonds, etc.). But more than that, an ETF is like investing in the market as a whole, rather than trying to pick individual “winners” and “losers.”
Get $10,000 managed free for a year when you sign up for a new Wealthsimple account. Invest as little as a dollar and we’ll build you a personalized investment portfolio containing ETFs.There are a few advantages to ETFs, which are the cornerstone of the successful strategy known as passive investing. One is that you can buy and sell them like a stock. Another is that they're safer than buying individual stocks. One company's fortunes may go down, but it's less likely that the value of lots of companies will be quite as volatile. It's even safer when you invest in a portfolio of several different types of ETFs, so that if one part of the market goes down, you'll still be invested in other parts. ETFs also have much smaller fees than actively traded investments like mutual funds.
Get started with Wealthsimple Trade. Sign up today and start building your portfolio with a free stock.Eager to talk ETFs? Give us a ring. Wealthsimple is one of the only automated investing services to offer all of its clients unlimited human support. Every Wealthsimple client gets state of the art technology, low fees personalized service you might have not thought imaginable from a low-priced investment service. And for a limited time get $10,000 managed free for a year when you sign up for a new Wealthsimple account. Invest as little as a dollar and we’ll build you a personalized investment portfolio to grow your wealth.
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