The Motley Fool

Which Is Better: Investing In ETFs Or Managing My Own Stock Portfolio?

You have decided to grow your wealth through investing in the stock market. However, you are in a dilemma whether to invest in an exchange-traded fund (ETF) or to manage your own stock portfolio. To help you find out which investment strategy will suit you best, here are three essential points to consider.


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Unfortunately, investing and personal finance is not a subject taught in school. Every investor, hence, begins his/her investment journey knowing very little about stocks or the stock market.

However, if you are passionate about managing your finances and are willing to learn, you will easily be able to manage your stock portfolio and achieve decent returns.

Warren Buffet said, “Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ.” Buffett believed in the simplicity of investing and, investors, by no means, need to be mathematical wizards to learn how to invest. All we need is passion and discipline.


Managing your portfolio requires time. You need to dig through annual reports and to monitor the performances of your investments. Finding the right stocks to invest in can also be time-consuming.

Therefore, if you cannot find the time to manage and monitor your investments, then you might be better off putting your money in an ETF where the fund manager will do all the heavy lifting for you.

Are you beating the index?

Finally, if you have decided to manage your stock portfolio, the next step to consider is whether you are beating the market.

If you have tracked your performance over a reasonable period and realise that despite actively managing your stock portfolio, you have been unable to get returns above the index consistently, then investing in an ETF might be the way to go.

The Foolish bottom line

There are pros and cons to managing your own stock portfolio or investing in an ETF.

Managing your portfolio gives investors the freedom and control over where their money goes. It can also be more rewarding financially.

ETFs, on the other hand, are useful for investors who do not wish to put so much time and effort into their investments. It also guarantees that the investor will achieve returns similar to the market.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Jeremy Chia doesn’t own shares in any companies mentioned.