What is the Best ETF to Stock Ratio? (For Your Portfolio)

When you start investing, everyone has an opinion on what your portfolio should look like. Some say to go all-in on ETFs. Others swear by picking individual stocks. The truth is, the best ETF-to-stock ratio depends on your age, your savings progress, and how close you are to your retirement goal.

Personally, I lean heavier on ETFs at every stage of life… in most cases. If you’ve done the math and you’re on track for or ahead of your retirement goals, it makes sense to stay safe in ETF land. But if you feel like you’re a little behind, like I think I am overall based on my personal retirement number, then you might decide to go a bit heavier into stocks. Right now, I’m very close to 50/50 and might even be leaning 55% in stocks. I don’t recommend that for everyone. I’ve chosen to hold more growth stocks during what I believe is a strong bull market. It’s a calculated risk, but one I think will pay off. ETFs are safer, though, and they’ll likely take less of a hit when the next correction comes around.

To make this more relatable, let’s follow an example investor named Mark. He started in his mid-twenties with a modest salary, focused mostly on ETFs, and adjusted his mix as he got older. His approach isn’t about quick wins, but slow, steady progress that compounds over time.

I don’t trade options or try to time the market. It’s too risky and not worth the stress. Every now and then I might do a long-term LEAPS play, but that’s rare. The goal here is consistent, sustainable growth, not gambling on trends.

Key takeaways

• ETFs should make up most of your portfolio at every stage of life.
• Stocks add targeted growth potential, but they shouldn’t dominate your holdings.
• The closer you are to retirement, the heavier you go on ETFs for safety and stability.
• The further behind you feel, the more focused you should be on contributions, not risky bets.
• A calm, consistent approach beats trying to outsmart the market every time.

In your 20s: learning and compounding early

When you’re first starting out, your biggest advantage is time. In your 20s, the goal isn’t to chase hot stocks or trade constantly. It’s to build the habit of investing and let compounding do its job.

A good mix here is about 80–90% ETFs and 10–20% individual stocks. That gives you exposure to broad market growth while keeping your risk low. Choose simple ETFs like an S&P 500 fund, a Total World fund, or a Nasdaq 100 fund. Those cover almost every part of the global market automatically.

If you want to add some stocks, focus on dependable large-cap or mid-cap growth names, companies with strong financials and a proven record of growth. You can sprinkle in small-cap or value stocks if you want a touch more upside, but keep them limited.

Now, let’s check in on our example investor named Mark. When Mark started investing in his 20s, he didn’t try to be clever. He picked a few well-known ETFs, added a couple of blue-chip growth stocks he believed in, and kept contributing every month. The key was consistency, not timing.

In your 30s: growing faster and taking smart risks

By your 30s, you’ve probably got a better handle on your finances and a more stable income. You can afford to be a little more intentional about your stock picks, but your ETF core should still be doing most of the heavy lifting.

A smart mix here might be 70–80% ETFs and 20–30% individual stocks. Stick with broad-based ETFs that capture the U.S. and international markets. Keep most of your stock picks in quality growth companies you understand, the kind of businesses you actually use and believe in.

In his 30s, Mark started to trust his research a little more. He took small but confident positions in a few growth-oriented companies he used every day, ones he understood inside and out. Those bets paid off, and by his late 30s, the extra gains had bumped him a few years ahead of schedule in his retirement plan.

That’s the kind of risk that works: thoughtful, measured, and backed by research. He didn’t sell out of his ETFs or start chasing hype. He stayed grounded, and it paid off.

In your 40s: balancing upside and stability

By the time you reach your 40s, you’ve probably built a decent base of savings. This is when the focus starts shifting from “how much can I make” to “how much can I keep.”

A balanced approach here is 70% ETFs and 30% stocks. ETFs should include a mix of total-market and growth-oriented funds that can still deliver 13–20% returns in bull markets. Keep your stock side focused on proven performers, large-cap companies with a consistent growth record.

This is also when compounding starts to show its power. For many investors, the gains from their portfolio can rival or even exceed what they contribute each year. Mark noticed this around his mid-40s. His ETF-heavy portfolio was growing faster than his paycheck, and that momentum kept him right on track.

In your 50s: preservation with moderate growth

Your 50s are about protecting what you’ve built while still allowing for steady growth. The right mix now might be 80% ETFs and 20% stocks.

Focus on ETFs that provide a smoother ride, like low-volatility or dividend funds. Keep only your strongest individual stocks, the ones with long-term growth potential and stable fundamentals. This isn’t the time to experiment or chase trends.

By this stage, Mark wasn’t trying to beat the market anymore. His goal was to let the market keep rewarding him. He leaned heavily on ETFs and simply maintained a few long-term stock positions that had treated him well for years.

In your 60s and beyond: income and peace of mind

When you finally reach retirement age, the goal shifts to income and simplicity. The ideal mix here is 90–100% ETFs and 0–10% stocks.

This is the time to prioritize dividend ETFs or total-market funds that pay steady income and continue growing over time. You don’t need constant excitement, you need consistency.

Mark kept things simple in his 60s. His dividends covered a large portion of his living expenses, and he no longer cared about daily price swings. The money he’d built over decades was now doing the work for him.

Wealth in the Works Growth Tiers

The tiers below aren’t rules, they’re reference points. Everyone’s situation is different, and your mix of ETFs and stocks should reflect how far you’ve come and how much risk you can handle. If you’re on pace or ahead of schedule, a Steady or Balanced approach keeps you compounding safely for the long run.

If you’re playing catch-up or want to push harder during a strong market, the Growth or Rocket Fuel tiers may make sense. The key is to understand your comfort level, know what you’re investing for, and stay consistent with your strategy no matter which tier you fall into.

Tier	Name	ETF-to-Stock Ratio	Description
1.	Steady	90% ETFs / 10% Stocks	A conservative approach focused on protecting capital and achieving consistent, predictable growth. Ideal for investors ahead of their retirement target or nearing financial independence.
2.	Balanced	70% ETFs / 30% Stocks	A moderate strategy blending safety and opportunity. Keeps a strong ETF core with a measured amount of stock exposure to boost returns without taking on excessive risk.
3.	Growth	60% ETFs / 40% Stocks	Designed for investors seeking a higher level of performance while maintaining stability through ETF diversification. Suited for those building momentum in their wealth journey.
4.	Rocket Fuel	40% ETFs / 60% Stocks	A high-octane allocation built for aggressive investors looking to accelerate gains in a strong market. Higher risk, higher reward, and not for the faint of heart.

 

What kinds of companies should you invest in?

Most people don’t know where to start when it comes to choosing what to invest in. That’s normal. Once you decide how much of your portfolio is going into ETFs versus individual stocks, the next question is: what kinds of companies should you actually pick?

I’ll be honest… I focus pretty heavily on tech and fintech companies. That’s where I see the most growth happening right now. It’s what I understand, and it’s where I believe the biggest long-term gains are going to come from. I don’t currently own any healthcare companies or industrial stocks directly. The only exposure I get to those areas is through ETFs like VTI that hold everything by default.

This is not the most recommended strategy. Most financial advisors would say I’m too concentrated and not diversified enough, and I’d agree with them. It’s a calculated risk I’ve chosen to take based on what I believe the market is doing. But that doesn’t mean it’s right for you.

If you’re just starting out, don’t worry about picking the perfect company. Use ETFs to give yourself exposure to all the major industries, and then slowly build from there as you learn. Over time, you’ll figure out which kinds of businesses make the most sense to you. Just make sure your portfolio fits your goals and comfort level… not mine.

As a last side-note, never buy into the hype stocks and meme stocks of today. Sure, they can sometimes really payoff with massive gains in short periods of time. But you are much more likely to lose whatever you gamble. Stick to companies with solid financials and realistic valuations. If you want to be riskier with a very small percentage of your portfolio, like 5%, but going YOLO on GME is never a good idea.

At the end of the day

There’s no single “perfect” ETF-to-stock ratio that works for everyone. But if you keep the majority of your money in diversified ETFs and use individual stocks strategically, you’ll have a mix that grows with you and protects you at the same time.

If you’re behind on your savings, small adjustments to your contributions and a bit more exposure to growth stocks can help you catch up. If you’re ahead, you can lean more on ETFs for safety.

The bottom line is simple: consistency wins. Stick with ETFs as your foundation, add carefully chosen stocks for upside, and let time and compounding do the rest. That’s how Mark did it, and it’s how anyone can build real wealth without gambling on the market.