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Regular readers of this site are probably well aware of ETFs (Exchange Traded Funds). Indeed, many blogs here have covered their role either as Core holdings of Retirement portfolios or portfolios still in the Wealth-building phase. Some espouse ETFs as a Core holding but play around at the fringe with so-called “Explore” investments either in high-conviction individual stocks or in more tactical specialized ETFs. Many espouse a “hybrid” strategy of mixing ETFs with individual stocks, perhaps by “skimming” the same ETFs for particular stocks that appeal at some level, whether for income, growth or other reasons.
Roughly once a month for much of the existence of this site, Featured.com has provided useful content on investing and retirement. In the past year, it changed its strategy so editors like myself could have more input into the creation of its blogs. Now the process is one of posting a question or general request to its site, soliciting input from a wealth of largely US-based financial experts and business owners.
Today’s blog focuses on various strategies on ETFs and variants of using them as Core or Explore holdings, plus the pros and cons of the “hybrid” approach mentioned above. Most of these experts are on LinkedIn, as you may see by clicking on their company names below each entry.
Here’s how we posed the opening question for respondents:
When it comes to managing your personal Retirement Funds or that of clients, what role do ETFs (Exchange Traded Funds) play: Core, Explore, Tactical or what? If you do use ETFs, do you prefer to use them exclusively or do you like hybrid strategies where you also pick individual dividend-paying or growth stocks; or do you also cherry-pick individual stocks from favorite ETFs?
So with no further ado:
Hybrid Strategies of mixing ETFs with individual stocks can lead to trouble
When it comes to the role of ETFs, for the vast majority of people — especially the ones I see in my practice trying to build stable long-term wealth — they belong in the “Core” position. ETFs are a brilliant legal and structural innovation: they provide instant diversification, they are incredibly low-cost, and they are tax-efficient. They allow you to own the market rather than trying to guess which individual company will win, which is essentially an impossible game for most humans to play consistently over 30 years.
The hybrid strategy — mixing ETFs with individual dividend or growth stocks —is tempting, but it is often where people get into trouble. “Cherry-picking” individual stocks is not investing; it is gambling with better marketing. I have represented clients who lost their retirement savings because they became over-concentrated in a single “favorite” stock that cratered. When you cherry-pick, you aren’t just betting on the company; you are betting against the market, the sector, the economy, and your own lack of inside information.
If you are a professional investor with the time to research, the discipline to rebalance, and the stomach for volatility, go ahead. But for the average person, or even the professional focused on their own career, the most successful strategy is usually the simplest: Core, boring, broad-market index ETFs.
The most successful retirement portfolio is often the one you forget you own, not the one you tinker with every week based on a “hot tip” or a gut feeling. I’ve never seen a client file for bankruptcy because they were too boring with their index funds. I have seen clients file because they tried to get clever with individual stocks and got decimated by a market downturn. Complexity is rarely your friend in long-term wealth building. Keep it simple, keep costs low, and let time do the heavy lifting. That isn’t just good investment advice; it’s sound risk management. — Lyle Solomon, Principal Attorney, Oak View Law Group
ETFs are foundational to my plan for retirement. The consistency and broad market exposure that they represent allow them to be at the core of all of my other investment decisions. I use a blended model. In order to achieve this blend, I have selected low cost indexed products (that provide for consistency) in addition to specific dividend producing stock selections to provide additional income. — Zack Moorin, Founder, Zack Buys Houses
ETFs as Core with individual Satellite positions like Crypto
My personal approach to retirement portfolio construction uses ETFs as the core, with a satellite allocation to individual positions including crypto assets.
The core ETF layer serves a specific purpose: broad market exposure at near-zero cost, with automatic rebalancing and no single-company risk. For U.S. equity exposure, a total market or S&P 500 ETF handles this. For international exposure, a developed-markets ETF. For bonds, a total bond market ETF scaled by risk tolerance and time horizon. This core doesn’t require active management or conviction: it just needs to capture beta.
The satellite layer is where I allocate capital I’m willing to analyze actively and hold with genuine conviction. For me, this includes individual positions in companies I’ve studied deeply and blockchain assets backed by whitepapers I’ve read and evaluated (through ChainClarity’s own research process). The satellite allocation is sized so that a complete loss wouldn’t materially affect the core goal.
Why I don’t go pure ETF: I find that having no individual positions reduces my engagement with the market as a learning mechanism. Tracking companies or protocols I own forces me to read earnings reports, understand industry dynamics, and notice when my thesis was wrong. That active attention makes me a better analyst, which has compounding value beyond the direct investment return.
The hybrid strategy I’d caution against: owning both an S&P 500 ETF and individual U.S. large-cap stocks. The ETF already owns those companies: you’re just adding concentration risk and management overhead without meaningful diversification. If you’re going to pick stocks, pick categories the ETF doesn’t cover adequately.
Roman Vassilenko is the founder of ChainClarity (chainclarity.io), an AI platform that makes blockchain whitepapers accessible to investors and developers. — Roman Vassilenko, Founder, ChainClarity
Active Strategies only work if you a demonstrable Edge
The statistics don’t favor an active equity allocation strategy. Over the 10 years ending 2021, 84% of U.S. large-cap growth funds lost to their benchmark, the S&P 500. Even if we add back some of those funds to the universe that died along the way, the failure rate only drops to 91%. You might still have to explain why you’d invest money for a 0.66% expense ratio, which is what active equity funds average compared with 0.03% for their passive alternatives (SPY, VOO). On $500K invested for 30 years that grows at a real rate of 7% annually, you can expect to have spent nearly $387K in fees over your investment horizon. Half of this goes to the active funds manager, whether they perform well or poorly.
The exception to this advice comes if you feel an edge exists. Perhaps you work in Silicon Valley and have insight into Netflix or perhaps have engineer-level technical understanding on why a company’s underlying product will prevail over competitors, but unless you genuinely possess such an asymmetric advantage, most of the advice below comes from investing in low-cost ETF cores, keeping a few per cent in cash or cash alternatives and picking one or two individual stocks that you’re willing to lose money entirely, without jeopardizing your Financial Independence. I think anything beyond that could fit onto one side of a sheet of paper. — Jere Salmisto, Founder, CalcFi
ETFs remove the big risk of your own Decision-Making
Most investors treat ETFs as a convenience tool, but their real power is that they quietly remove the biggest risk in portfolios: your own decision-making.
I think of ETFs as a “behavioral anchor.” In most retirement strategies, they should be the core, not because they outperform everything else, but because they reduce the chances of overtrading, emotional decisions, and concentrated mistakes. They create a stable base you’re less tempted to interfere with.
In practice, I’ve seen this play out repeatedly. Clients who built portfolios purely on individual stock picks often drifted into overexposure or reactive selling during volatility. In contrast, those with ETF-heavy cores made fewer impulsive changes and stayed aligned with long-term goals. When we added individual stocks, it was deliberate and limited, more of a satellite layer than a competing strategy.
The takeaway is simple. ETFs are not just about diversification, they’re about discipline. Use them as your foundation, then layer in individual stocks only where you have conviction and a clear reason. The goal isn’t to outperform the market every year, it’s to avoid the mistakes that quietly destroy returns over time. — Omer Malik, CEO, ORM Systems
ETFs are my core. Period.
ETFs are my core. Period. I don’t have the time or the ego to think I can outpick the entire market with every dollar I own. My retirement strategy is built exactly like our risk models at Insurance Panda: you need a massive, diversified base to survive the outliers. I put the vast majority of my capital into broad-market index funds and let them ride. It’s the only way to ensure you actually have a pile of cash when you’re ready to exit the game.
But I’m a business owner, so I can’t help but look for an edge. I use a hybrid model. I keep the boring foundation in ETFs, then I pick individual growth stocks in sectors I actually understand: specifically digital infrastructure and software. I don’t bother “cherry-picking” individual names from a favorite ETF. That’s just over-analytical busywork. If I see a company we’re actually using in our own tech stack that’s clearly dominating its niche, I buy the stock directly.
And here is the hard truth. Most people mess this up by being too tactical with money they can’t afford to lose. They treat their Retirement fund like a casino. Don’t do that. Secure the base layer first with low-cost funds. Then, and only then, use your actual industry knowledge to take a few shots on individual winners. If you don’t have a clear information advantage, stay in the index. — James Shaffer, Managing Director, Insurance Panda
ETFs should be the core 70 to 80% of your Retirement Portfolio
To any of our MintWit readers who are saving for retirement, my advice will be to build the bulk of your retirement portfolio using ETFs because they provide instant diversification and very low fees. In essence, ETFs will form the basis, or the bread and butter, as part of your investment strategy, making up 70%-80% of your retirement portfolio. The message we always preach is that you use the ETFs as a safety measure; then you explore by buying a few stocks, such as those paid by dividends from companies such as Johnson & Johnson and Coca-Cola, to make up the remaining 10%-20%. –– Scott Brown, Founder, MintWit
ETFs as Core help maintain Target Allocations
ETFs are most useful as core holdings in a retirement portfolio because they offer broad exposure and make it simple to maintain a target allocation. I recommend using ETFs to establish the backbone of a portfolio, then layering in individual dividend or growth stocks only when they serve a clear, specific purpose. Relying exclusively on ETFs can work for many investors, but a hybrid approach lets you target income or single-stock opportunities without losing diversification. Keep the overall asset allocation aligned with your risk tolerance and time horizon. Automate contributions and set a regular rebalancing schedule so ETFs and any individual holdings stay within your intended ranges. Consult a qualified advisor for tax and account-structure considerations before making changes. — Amir Husen, Content Writer, SEO Specialist & Associate, ICS Legal
Hybrid Strategy uses indexing and select individual stocks
I view EFTs (Exchange Traded Funds) as my base of operations for overall market exposure and stability. I prefer to implement an index fund or hybrid strategy which incorporates both index investing and selected individual stock investments into my portfolio. The Hybrid Strategy will allow me to maintain broad based investment diversification by utilizing index fund(s), and also pursue greater returns on investment via selected individual equities. At times, I review the top holdings in the most popular EFTs to see if they are among my potential long-term investment options. — Mike Otranto, Founder, Wake County Home Buyers
ETFs belong in the Retirement core bucket but not a fan of Index Skimming
I’m coming at this as someone who’s been in estate planning since 2008 and now leads operations at Safeguard in Arizona, where retirement planning and asset protection are part of the same conversation every day. My view is that ETFs usually belong in the core bucket because retirement money needs clarity, liquidity, and a structure that’s easier to coordinate with the rest of the estate plan.
What matters most to me is not “ETF vs stock” in isolation, but whether the investment setup works cleanly with beneficiary designations, trust funding, and the reality of incapacity or death. A simple ETF-based core is often easier for a spouse, successor trustee, or family to understand and manage than a scattered collection of hand-picked positions.
I’m generally more comfortable with a hybrid only when there’s a clear purpose for it, not because someone wants more activity. For example, if a family has a living trust and wants long-term retirement assets organized so a successor trustee can step in smoothly, broad ETF holdings tend to create fewer administrative headaches than a portfolio full of one-off stock ideas.
I’m not a fan of cherry-picking names out of favorite ETFs just because they showed up on a list. In retirement and wealth preservation, I’d rather see a plan that accounts for inflation, Social Security timing, healthcare costs, and smooth transfer to heirs than a portfolio that becomes harder to administer when the family needs simplicity most. — Julie Jewett, Director of Operations, Safeguard.
ETFs should have a clear purpose, like Targeted Income or Tactical Exposure
I view ETFs as core building blocks of retirement portfolios, especially for taxable accounts, given their tax characteristics. Asset location is critical, so I often favor index ETFs in taxable brokerage accounts to help control when gains and income are realized.
Dividend-paying stocks and corporate bonds are typically better held in tax-advantaged accounts to avoid current taxation on dividends and interest. ETFs that do not distribute frequent income also give more control over timing because you generally recognize gains when you sell.
However, I do not use ETFs exclusively. I treat them as the foundation and layer individual securities when they serve a clear purpose, such as targeted income or tactical exposure. The precise mix depends on a client’s tax situation, income needs, and retirement phase, with asset location guiding those choices. — Clint Haynes, Financial Planner, NextGen Wealth
The point of ETFs is to provide exposure to an idea without taking single-stock blowup risks
ETFs are immensely diverse, that’s the first thing to clear up. Income ETFs, dividend-growth ETFs, low-volatility ETFs, broad-market index ETFs, growth ETFs, and speculative covered-call funds (YieldMax, Roundhill) are all ETFs, but they serve fundamentally different roles. Their shared job is to express an investment thesis with diversification. The point of an ETF is to give you exposure to an idea without taking the single-stock blowup risks (management, execution, etc.) that come with picking individual names.
For Retirement, low-volatility and dividend-growth ETFs are the natural fit, because they prioritize stability of distributions and capital preservation, which is what matters when you’re drawing down rather than accumulating. Speculative income products like YieldMax or Roundhill weekly-pay funds can play a role, but they’re a speculative income tilt, not a core retirement holding. The high headline yields often come at the cost of NAV erosion that trailing yield figures don’t show. A retiree leaning on these without understanding the option-writing mechanics underneath can find their principal halved over five years even while collecting “income.”
Growth ETFs are a different beast entirely. Their volatility and lower (or zero) distributions don’t suit the liquidity and income needs of someone in retirement, but they’re the right call for accumulators in their 20s, 30s, or 40s with decades-long time horizons. Different season, different tool.
On methodology: the right way to think about an ETF is bottom-up, not top-down. If you research the underlying stocks and like what you see, the businesses, the dividend track records, the valuations … you buy the ETF as a convenient, low-cost container for that thesis. It’s not a common or advised investment strategy to cherry-pick individual stocks out of an ETF you like, without having done the individual fundamental work. That’s reverse-engineering: you’ve already paid for the diversification, picking out individual names just adds concentration risk while losing the structural benefit. If you want concentrated exposure to one or two names, buy the stocks directly. If you want diversified exposure to a thesis, hold the ETF that expresses that thesis.
Across age cohorts and goals, the principle is the same: an ETF is a way to express a stock thesis efficiently, not a substitute for having one. — Ignacio Planas Gonzalez, Founder, YieldMaxCalc
Prefers individual stocks to ETFs over the long run
In the long run, I have an “eternal” preference for individual stocks over exchange-traded fund (ETF) investments; however, I believe that using them on a short-term basis can be helpful. Using individual stock investing as the major part of your overall investment portfolio gives you control while also giving you the ability to take advantage of opportunities when they arise. When I am new to or unfamiliar with a particular sector, I will add an ETF to provide additional diversification within this sector. Because I always feel that it is easier to lose money through active trading than passive buying, I never trade shares out of an ETF. — Adam New, Principal Owner, The Cash Offer Company
ETFs are the backbone of almost every Retirement portfolio I build
ETFs are the backbone of almost every Retirement portfolio I build: they’re the core, full stop. When I’m working with a business owner pulling $400K+ who’s already managing operational risk in their business, I don’t want their retirement account adding unnecessary concentration risk on top of that.
That said, I do run hybrid strategies. For certain clients, I’ll layer in individual dividend-paying stocks when the situation calls for tax-aware income positioning: something a broad ETF can’t always deliver with the same precision. The stock has to justify its own seat at the table based on that client’s actual situation, not because it looks interesting.
Where I push back is on the “cherry-picking from a favorite ETF” approach. If you already own VOO, then separately buying Apple or Microsoft is just paying twice for the same exposure while adding single-stock volatility. That’s a fee in disguise: it costs you in complexity and risk even if there’s no commission attached.
The April 2025 volatility we just navigated was a perfect stress test for this philosophy. Clients with ETF-core portfolios stayed disciplined. The ones with heavy individual stock positions in tech felt every single headline. Structure protects behavior, and behavior drives long-term outcomes more than any individual pick ever will. — Daniel Delaney, Owner, Seek & Find Financial.
“Explore” portion of portfolio lets you capture alpha from leveraging deep industry knowledge
A well-designed Retirement portfolio’s foundation consists of Exchange Traded Funds (ETFs), serving as the bedrock for long-term compounded returns due to their low cost and diversified nature. An all-ETF approach does a great job capturing broad market beta but commonly misses out on the alpha that can be generated by leveraging deep industry knowledge.
Therefore, I propose an integrated approach, with the bulk of your portfolio being allocated to ‘Core’ ETFs, providing you with the relative safety of broad-market ETFs, while still giving you the opportunity to invest in individual stocks (the ‘Explore’ component of your portfolio) that you’re knowledgeable about and have researched deeply to identify as quality dividend-paying or growth stocks.
Think of this strategy as being similar to managing a tech stack in a large organization. Most of your operations run on standard, scalable platforms (ETFs), thus providing you with the necessary stability and cost-effectiveness. At the same time, you use smaller, more expensive resources to invest in specific technology sectors where you have developed domain expertise, thereby minimizing systemic risk by using the ETFs as the foundation and maximizing your potential ROI on any individual equity you select through the ‘Explore’ portion of your portfolio
The key is discipline: the ‘Core’ portion will be automated and passive, while the ‘Explore’ component will be small enough to not introduce significant volatility into your total retirement assets and risk your overall financial independence. — Abhishek Pareek, Founder & Director, Coders.dev
Diversification with Purpose
When I think back on my approach to investing, one key strategy consistently stands out: diversification with purpose. It’s not just about spreading your investments; it’s about understanding the underlying dynamics of each asset class and how they align with your financial goals. For me, blending broad-market ETFs with carefully selected individual stocks has been a game-changer.
This combination allows me to balance the stability and growth potential inherent to different investments, ensuring that my portfolio isn’t overly exposed to any single risk factor. By staying disciplined and continually evaluating both macroeconomic trends and individual company fundamentals, I’ve been able to achieve consistent growth without unnecessary overexposure. — Marc Pamatian, Finance/Bookkeeping Expert | Founder, Chief Bookkeeping Officer
I know real estate, so am comfortable making tactical bets there. For everything else, ETFs do the heavy lifting.
At Santa Cruz Properties, we focus on real estate and property management, so my retirement strategy naturally leans toward what I understand best. ETFs play a solid “core” role in my personal portfolio, but I don’t use them exclusively.
Here’s my approach: broad-market ETFs form my foundation. Total market or S&P 500 funds give me instant diversification without obsessing over individual stock picks. But I’m a hybrid investor at heart.
Working in real estate daily, I’ve learned to appreciate tangible assets and cash flow. So I layer in REIT ETFs for real estate exposure in my retirement accounts. Then I cherry-pick individual dividend-paying stocks from sectors I actually understand. Property management companies, home improvement retailers, and mortgage lenders make sense because I see those businesses up close at Santa Cruz Properties.
The bulk of my retirement money, roughly 65-70%, sits in low-cost index ETFs. The rest is where I explore individual opportunities or get tactical. When I pick individual stocks, I usually study holdings of ETFs I already like and buy the ones that stand out based on what I know from working in real estate.
What I’ve learned helping clients buy homes and invest in property is that real wealth comes from knowing your lane. I know real estate, so I’m comfortable making tactical bets there. For everything else, ETFs do the heavy lifting.
This approach keeps things simple. I don’t have time to research hundreds of stocks while managing properties and helping buyers. ETFs give me broad coverage, and my individual picks let me overweight areas where I have genuine insight from my daily work. That’s what works for me. — Rina Gutierrez, Marketing Coordinator, MacPherson’s Medical Suppy
Blend ETFs for disciplined risk management with selective stock picking for tactical growth potential
A balanced ETF strategy tends to work best for Retirement portfolios because it combines diversification, cost efficiency, and long-term stability. ETFs often serve as the core foundation, especially broad-market and sector-focused funds, while selective exposure to dividend-paying and high-conviction growth stocks can complement long-term wealth creation. According to Morningstar’s 2025 Global Investor Experience study, low-cost diversified funds consistently outperform a large percentage of actively managed portfolios over extended periods due to reduced fees and broader market exposure.
At the same time, individual stocks still appeal to investors seeking targeted opportunities in sectors such as AI, healthcare, and clean energy. The most effective Retirement strategies increasingly blend both approaches: ETFs for disciplined risk management and selective stock picking for tactical growth potential. From a financial education standpoint, the biggest shift in recent years has been the growing awareness that retirement investing is less about chasing short-term wins and more about building resilient, diversified portfolios that can compound steadily across market cycles. — Arvind Rongala, CEO, Invensis Learning
“None of the above” ETFs for those in Retirement Risk Zone
ETFs barely register in how I build retirement portfolios. My whole philosophy — the Lifetime Wealth Blueprint — is built around income generation and market volatility protection, which means I’m leaning heavily on fixed-index annuities, private real estate, and alternative credit solutions rather than publicly traded securities.
The clients I work with are typically within 5-10 years of retirement with $1M+ to invest. At that stage, the sequence-of-returns risk is brutal: one bad market year right before or after retirement can permanently derail a plan. That’s why I moved away from traditional stocks, bonds, and mutual funds entirely, ETFs included.
What I use instead mirrors what pension funds and endowments do: private infrastructure, private credit, non-traded REITs. BlackRock’s Larry Fink literally just made this argument publicly, suggesting a 50/30/20 portfolio with 20% in private assets. I’ve been operating that way for years before it became mainstream conversation.
So to directly answer your ETF question — Core, Explore, or Tactical — it’s honestly “none of the above” in my practice. The cherry-picking conversation between ETFs and individual dividend stocks assumes market exposure is the right foundation. For retirement income planning, I’d argue that’s the wrong starting assumption entirely. — Michael Ginsberg JD, CFP, Certified Financial Planner.
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