Is Buying a Single Index ETF Smarter Than Picking Individual Stocks?

2 hours ago 1

Todd Shriber, The Motley Fool

Mon, April 13, 2026 astatine 8:05 AM CDT 3 min read

When introduced to investing, galore marketplace participants larn astir the benefits of owning idiosyncratic equities. And marketplace past is littered with examples of "story stocks" that minted fortunes for prime investors who apt conscionable got lucky.

But for astir investors, the amended people of enactment is to larn how to put successful scale funds oregon exchange-traded funds (ETFs) that way wide marketplace indexes. Familiar examples see the Vanguard S&P 500 ETF (NYSEMKT: VOO) and the Vanguard Total Stock Market ETF (NYSEMKT: VTI).

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A graphic that says ETF with arrows pointing up.

For galore investors, ETFs and scale funds marque much consciousness than azygous stocks. Image source: Getty Images.

While owning an plus specified arsenic the VOO ETF oregon a full marketplace money isn't glamorous oregon arsenic perchance rewarding arsenic owning a azygous stock, it's a dependable thought for investors seeking broad-based vulnerability portion eliminating the load of picking winners.

Put simply, banal picking is difficult, and the information corroborate arsenic much. In 2025, the Vanguard S&P 500 ETF gained 17.8%, portion 79% of U.S. large-cap progressive managers underperformed the S&P 500. Not lone was that worse than the 65% that lagged the scale successful 2024, but last twelvemonth was besides the fourth-worst for progressive managers lagging the S&P 500 since S&P Dow Jones Indices started keeping way successful 2002.

In plain English, adjacent the pros, who person resources astatine their disposal that "home gamers" bash not person entree to, get it wrong, and that happens rather frequently. So possibly there's thing to beryllium said for "VOO and chill" arsenic is truthful often said connected Reddit.

For investors connected the obstruction astir owning a basal ETF, specified arsenic the Vanguard S&P 500 ETF oregon the Vanguard Total Stock Market ETF, Warren Buffett's views connected the substance are worthy noting. Perhaps the top wealth manager of each time, Buffett erstwhile said that mean investors tin bushed the pros by embracing scale funds and periodically adding superior to their stakes. He besides said cost-effective scale funds are "the astir sensible equity concern for the large bulk of investors." That's convincing advice.

Before you bargain banal successful Vanguard S&P 500 ETF, see this:

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