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Anonymous

20 Jan 2020

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General Investing

Should I buy an individual stock or an ETF that includes that particular stock?

Is it wiser to invest in that one stock only, or invest in an ETF that has that stock, so as to have more diversification? In what scenario should you do either option?

Discussion (2)

What are your thoughts?

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With ETF, you are exposed to the overall market risk/return, with individual companies' risk minimized. In a sense, if you wish to get a very specific exposure to that individual stock and/or its underlying biz, buying into a ETF that include that particular stock blunt the magnitude of that exposure

Pang Zhe Liang

20 Jan 2020

Fee-Based Financial Advisory Manager at Financial Alliance Pte Ltd (IFA Firm)

It depends on your investment objectives and goals. Without further insight about you, there is no way to give you the best answer.

In general, before you start investing, there are some questions that you need to answer:

  1. What is your capital?

  2. How will you want to invest your capital? E.g. lump sum or an amount on a regular basis

  3. How long will you want to stay invested? E.g. 10 years

  4. What is your risk appetite? E.g. How do you feel about short-term volatility?

  5. What is your objective for investing?

Here is everything about me and what I do best.

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