The Only 3 ETFs I’d Invest In As A Beginner
1. Why Beginners Should Avoid Individual Stocks
Investing in individual stocks like Apple, Amazon, or Nvidia may seem tempting, but it’s risky for beginners. It requires deep knowledge of a company’s financials, growth prospects, and innovation pipeline. A safer and simpler route is investing in Exchange-Traded Funds (ETFs), which provide instant diversification by pooling many companies into one fund.
2. The Power of the S&P 500 ETFs
For beginners, S&P 500 ETFs such as SPY and VOO are great starting points. These funds track the performance of the 500 largest U.S. companies, offering steady, long-term growth. Historically, the S&P 500 has averaged over 10% annual returns. VOO is especially attractive due to its low expense ratio of 0.03%, compared to SPY’s 0.09%.
3. Investing for Income with Dividend ETFs
If you’re seeking passive income, consider dividend ETFs. These funds invest in companies that pay consistent dividends. SCHD targets top dividend-paying U.S. firms, while VYMI provides international exposure. Dividends are typically paid quarterly and can be reinvested to grow your portfolio over time. Just remember, dividend income may be taxable.
4. Accelerating Growth with Growth ETFs
Growth ETFs like QQQ and VUG focus on companies with high growth potential. QQQ covers the NASDAQ 100, loaded with tech giants, while VUG spans multiple industries. These funds carry more risk, as many growth companies reinvest profits and don’t pay dividends, but they also offer greater potential for rapid returns.
5. Niche ETFs: Investing in Trends
Niche ETFs let you invest in specific sectors or global trends. BOTZ focuses on AI and robotics, AGNG targets the aging population, and IYG invests in financial services. While these funds can capitalize on big shifts in society, they’re also more volatile and should be considered with caution.
6. Embrace Dollar Cost Averaging (DCA)
Instead of trying to time the market, use Dollar Cost Averaging—or Always Be Buying (ABB). Set a fixed schedule (weekly, bi-weekly, or monthly) to invest the same amount in ETFs regardless of market conditions. This removes emotion from investing and builds wealth consistently over time.
7. Keep a Long-Term Perspective
Wealth is built over decades, not days. Over the last 100 years, the market has endured 16 recessions and 25 crashes, yet long-term investors have been rewarded. Treat downturns as buying opportunities. Time in the market always beats timing the market.
8. The Most Important Step: Get Started
You don’t need to be perfect to be successful. The biggest mistake is not starting at all. Begin with ETFs, commit to your strategy, and refine it as you learn. With discipline and patience, anyone can build wealth over time.
Jaspreet Singh is not a licensed financial advisor. He is a licensed attorney, but he is not providing you with legal advice in this article. This article, the topics discussed, and ideas presented are Jaspreet’s opinions and presented for entertainment purposes only. The information presented should not be construed as financial or legal advice. Always do your own due diligence.
