There Are Over 12,000 ETFs. Which One Is Right for Your Age?

According to my wife, I spend too much time on Reddit. But as part of the online fishing community, I enjoy answering beginners' questions and documenting my adventures. Every time I open the app, though, unsolicited advice from investment-focused subreddits invariably bleeds into my feed. For every picture I see of a mahi or mackerel, there are double the number of posts about how to get rich by shorting overvalued AI stocks or trading commodity futures.

One problem with social media investing advice is that you rarely know who it's coming from. Those lambasting value investing might not be old enough to remember the last tech bubble, while someone aggrandizing dividend investing could be a trust fund recipient who's never worked a day in their life. But in my nearly 30 years on the internet, one thing's become abundantly clear: The popularity of exchange-traded funds (ETFs) has exploded.

Since 1993 when State Street debuted the nation's first ETF — the S&P 500 ETF Trust (SPY) — the number of ETFs has grown to over 12,000. From index funds like the SPY to quirky, thematic funds like the Procure Space ETF (UFO), they run the gamut. There are ETFs tracking the trades of members of Congress, and others that let you invest in the spending habits of millennials or the vices of Americans.

ETFs have become the go-to investment vehicle for financial advisors, more than 89% of whom recommend them to current clients compared to just 53% recommending individual stocks. The reasons why are obvious. As easily accessible investment funds with shares that are listed on stock exchanges, ETFs can provide immediate diversification and generally charge lower fees than mutual funds.

And unlike mutual funds, which often carry prohibitively expensive minimum investment requirements, you can purchase as little as one share of an ETF (and depending on your online brokerage, perhaps even fractional shares). An additional benefit: You can buy and sell ETFs during pre-market hours, regular market hours and after hours. Mutual funds, on the other hand, cannot be traded during market hours.

These funds can give you exposure to major indices or individual sectors, and for investors with higher risk appetites, they can double or triple the returns of an index or single stock via leveraged funds.

But of the thousands of ETFs available, some are more suitable for investors of a certain age. Growth ETFs, for example, may make more sense in your 20s, while dividend ETFs may be better suited for income-focused investors gearing up for retirement. In this five-part series, I discuss four ETFs that fit DIY investors' portfolios based on life stages.

(Full disclosure: These age classifications are arbitrary; they aren't determined by hard-and-fast rules, and it's incumbent upon investors to establish their own financial objectives and conduct their own due diligence.)

18-35

The younger you are, the longer your investment horizon is, and the more risk you can tolerate. The prevailing theory is that because investors in this age group have more time to recover from losses, they can afford to focus on higher-volatility equities with more upside potential — like tech stocks and growth ETFs.

Click here to read about the Invesco NASDAQ 100 ETF (QQQM), an ETF that's suitable for younger investors.

36-49

During this stage of life, there are some recurring themes: persistent back pain, suddenly high cholesterol and building upon the foundation of the investments you've made over the past decade or two.

Click here to read about the Schwab US Large-Cap Growth ETF (SCHG), an ETF that's suitable for middle-aged investors.

50-67

At this age, it's time to refocus your investments on you and your rapidly approaching retirement. If you have kids, they're probably off at college or beginning their careers. And now that you've had decades to fund your portfolio, it's time to shift your strategy away from growth.

Click here to read about the Invesco S&P 500 Equal Weight ETF (RSP), an ETF that's suitable for investors preparing to leave the workforce.

Retirement age (and after)

You've officially left the workforce, but before using your senior discount to book back-to-back cruises, you need to ensure that the focal points of your investments are wealth preservation and passive income generation.

Click here to read about the JPMorgan Equity Premium Income ETF (JEPI), an ETF that's suitable for retired, yield-focused investors.

Parting message

Of course, no portfolio should be allocated 100% to any single equity, whether it's a stock or ETF. And while Warren Buffett's right-hand man of 45 years, Charlie Munger, reportedly left his family's portfolio in just three stocks, the average retail investor is not Charlie Munger.

But these four age-appropriate ETFs could align well with each of those cohorts, complementing their existing investment strategies. If you find that any of these funds do, in fact, fit your financial objectives, they can become a central facet of your overall portfolio because of the inherent diversification that ETFs offer. However, it's up to you as the investor to decide on how much weight they should hold overall.

If you are interested in getting started on your ETF investing journey, read our guide to the best investing platforms and learn how strategies like dollar-cost averaging can help accelerate your wealth. And don't forget to revisit this series after hitting milestone birthdays to understand how to readjust your investments as you age.

More from Money:

An ETF for Every Age: 18 to 35

An ETF for Every Age: 36 to 49

An ETF for Every Age: 50 to 67

An ETF for Every Age: Retirement and After