Diversification or investing in many different companies or industries, helps you reduce risk by spreading out your bets 💰

But, finding lots of stocks can be tiresome. . . 😥

Say hello to ETFs! 👋

💡ETFs (Exchange-Traded Funds) = a bundle of stocks that you can buy as one.

For example, let's say you love tech and want to invest in Apple and Google. 🍎

You could just buy these 2 stocks, but you'd be missing out on other great tech companies, like Nvidia (which had a crazy gain in May 2023) 🤖

ETFs come to the rescue!

They allow you to make one investment that covers many different companies in your industry of interest 💪

By investing in a tech-focused ETF, like QQQ, you can automatically diversify into many different stocks 🌟

Even if Apple stock has a bad day, maybe Google or Nvidia stock has a fantastic day, balancing out your investment! ⚖️

This way, you don't put all your eggs in one basket. 🥚

If a particular company crashes, it won't affect your investment too heavily because there are other companies in the ETF.

ETFs aren't limited to industries; they can also be grouped by location, company size or many other factors! 🏥

There are even ETFs that track the entire stock market. 📈

SPY and VOO are both ETFs that track the S&P 500, and therefore the whole market! 🤯

In the last 30 years, the S&P 500 has increased 10% per year on average 💰

So if you had invested in SPY 30 years ago, you would have grown your initial investment by over 16x!