Are ETFs riskier than stocks?

Are ETFs riskier than stocks? This is a question that many investors often ponder when considering their portfolio allocations. On the surface, it seems like a straightforward comparison - stocks are individual securities representing ownership in a company, while ETFs, or Exchange Traded Funds, are baskets of securities that track an index or a specific investment strategy. But is the risk profile of these two investment vehicles really that different? ETFs offer diversification by pooling together multiple securities, which theoretically should reduce overall risk. However, they still carry market risk, and their performance is closely tied to the underlying assets they track. On the other hand, stocks can be highly volatile, especially those of smaller or less stable companies. But they also offer the potential for higher returns if the company performs well. So, are ETFs riskier than stocks? The answer isn't necessarily a straightforward yes or no. It depends on the specific ETF and stock being compared, as well as the investor's risk tolerance and investment goals. In the end, a diversified portfolio that includes both ETFs and stocks can help mitigate risk while potentially maximizing returns.