What is the difference between an ETF and a stock?

A stock usually represents ownership in a single company. When you buy a stock, your return depends heavily on that company's performance.

An ETF represents a slice of a portfolio. Many ETFs hold dozens, hundreds, or even thousands of securities, which can reduce company-specific risk through diversification.

ETFs still carry market risk. If the market or sector the ETF tracks drops, the ETF can drop too. The key decision is whether you want concentrated exposure (a stock) or diversified exposure (an ETF), and how that fits your risk tolerance.