ETFs and stocks stand out as options for investing your savings. Stocks are more popular. When most people think of investing, they think of individual stocks. Yet, it turns out that ETFs will likely be a better option for you to grow your wealth long term. We explain in detail why this is the case.

What's a stock?

A stock is part-ownership in a company. It gives you a share of the company's profit and assets. Investing in stocks can yield high returns. This is especially true for companies with strong growth potential. However, it requires active management and research. You need to evaluate their financial health, industry position, and growth chances.

What's an ETF?

ETFs (Exchange-Traded Funds) are investment funds that invest in hundreds, or even thousands, of stocks (or other type of investment). This diversification is one of the most attractive benefits of ETFs compared to an individual stock. Instead of investing in just one company, you invest in hundreds in one go, reducing the risk. For example, you can invest in a BEL 20 ETF and benefit from the performance of all the largest Belgian stocks.

Because the majority of ETFs are designed to track a market index, they're also called trackers. The style of investing based on indexes is called index investing, also called passive investing because you typically hold your investments over the long-term. When passively investing, you choose to ignore day-to-day price changes knowing that the market will keep growing long-term. Data shows that this strategy gives the highest return in most cases.

The most famous index is the S&P 500, which contains the 500 biggest American companies. Large companies such as Apple, Google or Amazon are represented in the S&P 500. The graph below shows the growth of the S&P 500 index since 1992. A €10,000 investment in 1992 would have resulted in over €270,000 by the end of 2024, or an average 10.9% return per year! There are also ETFs that track global indexes, like the MSCI World or FTSE All-World indexes.

ETFs lead to better returns than stocks

Picking stocks is fun and exciting. It's easy to get started by installing any of the neo-broker apps, and you get to invest in the companies you love. But in all likelihood, your return will be inferior to a balanced portfolio of ETFs.

It turns out that a passive approach based on indexes usually leads to better returns in the long term than investing in individual stocks. In fact, research indicates that active traders underperform the market by an average 6.5% per year. Even most professional investors underperform compared to an index-based ETF. Let's see why.

Stock picking is very time-consuming

First of all, stock picking is very time-consuming if you want to do it well. And you should if you're investing your life savings! You need to do the research to convince yourself that a particular stock is undervalued by the millions of investors around the world. You then need to decide when you will sell. You should be ready to dedicate a few hours per week following up on your investments, and maintain this for the thirty years or more than you plan on investing.

It's also best to decide this up-front to reduce the risk that you will make investment decisions based on your emotions. An investor's emotions are his worst enemy.

Everyone is playing the same game

When you buy a stock, you have to remember that there's another person on the other side of the transaction who's selling you their stock. Every transaction in the stock market is basically a trade in opposing views. This other person can be an individual investor like yourself. But only about 15% of trading happens by individual investors like you and I. So most likely, they're a professional at a hedge fund, a large bank or another financial institution. And there's a good chance that they have access to much better information than yourself that made them decide to sell the stock. Investing is their livelihood, and they have entire departments of analysts supporting him in his work. So from the moment you buy the stock, the odds of the bet turning in your favour are already against you.

Most stocks don't perform that well

Finally, only a small number of stocks perform really well. Most stocks actually don't perform that well. And if you don't own the ones that do really well, you're much more likely to underperform the market. This skewness makes stock picking really hard.

The irrationality of home bias

When investing in individual stocks, most will stick to their home market, or stocks that they know. If you live in Belgium, you're more likely to invest in companies like Delhaize or Solvay than a Swedish or Brazilian company. The home bias among Belgian investors is 45%, even though the market cap of the Belgian stock market is only 0.24% of the global market. Yet there's no reason why Belgian stocks perform better than Swedish or Brazilian stocks. On the contrary, the historical performance of the BEL 20 would indicate the opposite.

We tend to sell winners too early and hold on to losers too long

The disposition effect is the tendency to sell stocks that have increased in value while keeping stocks that have dropped in value. This prevents us from selling poor performers and buying potential winners.

Our brains are working against us

The home bias and the disposition effect are examples of irrational, behavioural biases that negatively affect our decisions when dealing with individual stocks. The Nobel-prize winner Daniel Kahneman has documented many of these in his brilliant book "Thinking, Fast and Slow". Unfortunately, these biases are wired into our brains. So they're extremely hard to ignore, and they're an important reason for the underperformance of stock pickers.

Our own experience with picking stocks

Our very first experience with investing was through individual stocks as we had access to apps that made trading them so easy. It didn't end well. Co-founder of Curvo,Thomas, had the genius idea that lots of people would want to buy FitBits as Christmas presents for their family members. He purchased their stock on the 4th of November 2016. Two months later, on January 5th 2017, it had dropped 40%. Quite the wake-up call.

On his side, Curvo's other co-founder, Yoran bought shares in Dropbox when they went public in March 2018. He had used Dropbox from when it was first released. It was a good product that he used daily. And reading through the S-1, he was convinced of the founder's vision. So it had to be a good stock! Five years later, the stock is roughly at the same price. He still checks on it daily, waiting for his opportunity to sell.

Through these experiences, we learned a few things:

  • It's all fun and games until you lose. You think you're a little Warren Buffett when you win, but rationalise and blame "external factors" when you lose.
  • It's mostly luck. We simply don't have an edge over the thousands of other investors across the world.
  • It takes a lot of work to do well. It requires more than reading one quarterly report to make a sound investment decision.
  • It's an emotional roller-coaster.

There had to be a smarter way, where we wouldn't be so reliant on luck to get a return. This is when we discovered the wonderful world of ETFs.

Why you should probably invest in ETFs

We believe most people should invest in ETFs rather than stocks. In fact, we think ETFs are the best way for the majority to grow their wealth.

Diversification is at the core

Rather than picking individual stocks such as FitBit or Dropbox, index funds are a way to buy the whole market, across all sectors and regions of the world. Essentially, you own a small portion of thousands of companies throughout the world. Instead of betting on a particular company, you are placing a bet on the global economy. Your investments are diversified, have a lower risk and a more consistent return than when picking stocks individually.

Because of the benefits of diversification, it was a core principle when building the portfolios offered through the Curvo app. Each portfolio invests in over 7,500 stocks across more than 40 different countries.

You hold all the winners

We saw that only a minority of stocks make up most of the return of the stock market. It's better to invest in those winners at the expense of holding some losers, than not investing in those winners at all. By buying a global ETF, you automatically invest in almost all the public companies in the world. So you hold all the winners.

ETFs are not affected by our behavioural biases

ETFs simply follow an index, which is a mechanical "spreadsheet" of stocks that the ETF should invest in, and their weightings. They don't succumb to the home bias. They also counteract the disposition effect. A stock that isn't performing well will gradually reduce in weight in the index, meaning that the ETF will gradually sell its stock. This means that losers are automatically sold. Conversely, the ETF will buy more of stocks that are performing well.

ETFs hardly take any time from you

Once you’ve selected the right funds to invest in, you can sit back and watch your investments grow. There's no need to waste time analysing individual stocks.

Investing a fixed amount every month is one of the best financial habits you can adopt. Thanks to compounding, these small amounts grow to considerable wealth over time. That's why we automated this in Curvo. In the app, you can set up a direct debit. Then every month, this amount will automatically be invested for you in your portfolio. Saving becomes easy when it's automated!

It works

Long-term index investing has worked in the past. And there's no reason it shouldn't work in the future. Just take the global index MSCI World as an example, which is composed of 1,500 companies across 23 countries. It has delivered an average yearly return of 10.4% since 1979.

When individual stocks make sense

Picking stocks does work for some. There are a few reasons why:

  • Potential higher return. If you had bought Apple shares ten years ago (and held onto it), you would have made an enormous profit!
  • Exciting. Emotions rise when your stocks go up in value.
  • Invest in companies you love. Choose your favourite companies.
  • Make a quick buck. Some stocks go up spectacularly in a matter of hours or days. If you time it well, you can get substantial returns very quickly.

Core-satellite approach: a middle ground

It's possible to invest both ways by, as they say in finance speak, a "core-satellite" strategy. In the core are your ETFs that are well diversified, long term, and don't ever need to change. The satellite is a smaller part that you allocate to more actively managed investments like individual stocks.

With this approach, you still get to experience the excitement that comes with picking your own investments. But you also have the peace of mind that the majority is invested in a well-thought-out, diversified portfolio that will bring you success long term.

Should you invest in ETFs or stocks?

Let's summarise the differences:

Stocks ETFs
Constant monitoring
You need to be focused at all times to be successful.
Peace of mind
Sit back and watch your investments grow as they follow the world economy.
You need an edge to beat the market
What's your advantage over all other investors?
No edge required
You're aware that diversification wins in the long run.
A time sink
Do you want to spend your weekends trading and reading quarterly reports?
Investing on autopilot
Set up monthly contributions, sit back and spend your time on what matters to you.
Learn to nurture your emotions.
But we see it as a smart thing. We strongly believe that good investing is boring.
Potentially higher returns
Are you the next Warren Buffett? If so, ETF investing is not for you!
Follows the market returns
You'll invest in thousands of companies rather than a select few.
Quick buck
You may earn an instant return if you time it right.
Suited for the long term
Compounding your investments over many years leads to substantial returns.

Our point of view is clear: we think ETFs are better than individual stocks for most people. Only when you are willing to dedicate to your investments several hours per week for decades, and you think you have an edge over the other investors in the world, do individual stocks make sense. But for most people, investing is simply a tool to build a better financial future. They'd rather spend their time on things they really care about, like their family, friends and hobby's.

Invest in ETFs the easy way: Curvo

We understand that it can be difficult to build a portfolio of ETFs that's right for you. We started Curvo to solve this problem and make ETF investing easy and accessible to everyone.

Creating an account on Curvo starts with answering a questionnaire on your investment goals and your appetite for risk. You’ll then be assigned the best portfolio of index funds that matches your goals and risk tolerance. Each portfolio is managed by NNEK, a Dutch investment firm licensed by the Dutch regulator (AFM). All portfolios are globally diversified and invest in over 7,500 companies so it's a lot more diversified than one individual stock.

Create an account in only a few minutes through Curvo's app

Learn more at how Curvo works and how you can put your savings to work in only a few minutes.


We highlighted two options for you to invest your savings: ETFs and individual stocks. ETFs offer steady, low-effort growth. They suit people who don't want to check the market daily. On the other hand, stocks can be more profitable. But, they need careful research and a higher tolerance of risk. Apps like Curvo which we started make it easy to manage your ETF investments.

Questions you may have

What are the disadvantages of ETFs?

There are a couple of disadvantages when investing in ETFs.

First, the stock market goes down from time to time. It's no secret that the economy ebbs and flows. Because of these fluctuations, it's important to maintain a long-term view when investing. An investment horizon of 10 years or more is ideal.

Secondly, you have less control over what you invest in. When you invest in an ETF, you let the underlying index provider choose all the stocks in the index. For instance, when you invest in the S&P 500, you can't choose the companies you invest in because you have no say over the composition of the index. Only Standard & Poor's, the company behind the S&P 500, can.

Why not invest in an ETF?

You shouldn't invest in ETFs if you are investing for the short-term. ETFs are exposed to the market risk, meaning that their value fluctuates with the value of the stock markets. You need to have a sufficiently long investment horizon to increase the chances of a positive return. An investment horizon of 10 years or more is ideal.

Secondly, you should only invest money that you can miss. If you have very little savings, it's better to first build an emergency fund.

How safe is investing in an ETF?

ETF investing is one of the safest ways to invest. The most important risk are the fluctuations of the stock market. But unlike for example the crypto space, ETFs are tightly regulated by very strict rules and regulations that apply to the entire European Union. The chance of something bad happening to your money is extremely low.