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Do ETFs have the same risk as individual stocks?

April 26, 2017ETFs individual risk stocks

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Do ETFs have the same risk as individual stocks?

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No. It is less. Since ETFs are diversified portfolios, the investment is diversified between many companies; therefore the risk is lower than individual stocks. The risks of the ETFs we recommend are approximately the same as with mutual funds. (The “QQQQ” is comparable to a diversified technology fund, and to the Nasdaq Composite. The “IWM” is comparable to a diversified small cap fund and is comparable to the Russell 2000. The “SPY” is comparable to a well diversified mid-to-large cap fund and is comparable to the S&P 500. The “SMH” is comparable to a sector fund and it has more volatility than the other three ETFs). Do ETFs have the same risk as options or futures (commodities)? No. It is much less.