The stock market has risen from Orion Meteoroid shower of October 2022 and had no prominent adjustment. Even the recent wave rose from the golden pit of April, it has already been lasted for 9 months. A lot of people are waiting for a correction or afraid of correction. But even AI cannot tell you when will it comes, only can warn you keep alert on it. Therefore, some people are thinking of buying ETF for it has quite a large scope of diversification. They are actually a basket of stocks, so can thus stand fast against a crash. It is one of the common means of lowering your risk.
I asked the AI to list the advantages and disadvantages of ETF. As I have already said several times. When an investor buys a stock, subconsciously he wants it to run faster than the market, but when buying ETF concerning stocks like SPY, VOO and QQQ, actually they are running according to S&P or Nasdaq, they can never be fast than the index. That means you have already given up the hope of running faster than the index. Basically, the S&P has an average of annual growth of 12% and NASDAQ 22%, please refer to The Express of 2025821 and 20250904.
When there are significant changes in monetary policy like QE or QT, you can buy ALLW or BWX, for they are concerning bonds and equity. If you afraid of the stock market will fall, you can buy the CBTC, IBIT or MSTR, for they run according to Bitcoin and Crypto and not according to stock market. If you do not want to link up with crypto so much you can try ARKW, for its only partially linked up. Of course, when you are interested in Mars Landing project where I pushed for years you can try the ARKX. When you think the era of robot will come in 2026, you can try the ARKQ, ROBO, AIQ and BOTZ.
For high dividend ETF like QYLD, it is very attractive that it pays out dividend every month, and after 8 or 9 years you can get back the capital you invested, and all the rest money inside your account is a profit. Actually, they are buying options to pay you the dividend, so the price is very hard to rise and only can fall.
However, ETF should not occupy a major portion of your total investment. The holding should be at least for one year to three years, or else better try some other stocks. The portion should be under 25% of your total investment and aim at other stocks of faster growth. Buy ETF is always better than defensive stocks or anti-falling stocks for they have stronger recovery power than those anti-falling stocks. So please study thoroughly the recommendations of AI and make you right choices.