Question 1

What is the difference between an ETF and an individual stock?

Accepted Answer

An individual stock is ownership in one company. An ETF is a single fund that holds a basket of many assets at once, so buying one share gives you a small slice of everything inside it.

Question 2

Are ETFs safer than individual stocks?

Accepted Answer

An ETF spreads your money across many holdings, so one company failing hurts less than it would if you owned only that company. That lowers single-stock risk, but it does not remove market risk, and the whole basket can still fall.

Question 3

What is single-stock risk?

Accepted Answer

Single-stock risk is the chance that one company you own has a bad event, such as a profit warning or a scandal, and a large part of your money is tied to that one outcome.