Answer a few questions to help you determine which investment product you should choose.
How to invest

Should you invest in stocks, bonds, mutual funds, or ETFs?

3 minute read
  •  
August 20, 2020
How to invest
Understanding investment types
Article
Page
Bonds
ETFs
Mutual funds
Stocks

As a do-it-yourself investor, you know the importance of building and maintaining a diversified portfolio. First, you determine your goals, time frame, and risk tolerance. Then comes your asset mix. Finally, you can choose your investments.

When you’re deciding which type of investment product (or products)—individual stocks, bonds, mutual funds, or ETFs—to hold in your portfolio, it’s important to consider the cost of the investment and the amount of time and effort you want to spend building and maintaining your portfolio. You can build a portfolio with only 1 type of investment product, or you can hold a combination of products.  

There are a few questions you can ask yourself to help make the choice a little easier—see below. Or if you’d rather have an expert build and maintain your portfolio, we’ve got you covered with advice options that can help you reach your goals.

Find the best investment products for you:

Individual stocks and bonds

Mutual funds

ETFs (exchange-traded funds)

Need help building a diversified portfolio?

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*Vanguard average ETF expense ratio: 0.06%. Vanguard average mutual fund expense ratio: 0.10%. All averages are asset-weighted. Sources: Vanguard and Morningstar, Inc., as of December 31, 2019.

All investing is subject to risk, including the possible loss of the money you invest.

Diversification does not ensure a profit or protect against a loss.

Investments in bonds are subject to interest rate, credit, and inflation risk.

You must buy and sell Vanguard ETF Shares through Vanguard Brokerage Services (we offer them commission-free) or through another broker (which may charge commissions). See the Vanguard Brokerage Services® commission and fee schedules for full details. Vanguard ETF Shares are not redeemable directly with the issuing fund other than in very large aggregations worth millions of dollars. ETFs are subject to market volatility. When buying or selling an ETF, you will pay or receive the current market price, which may be more or less than net asset value.

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