How to Invest $1,000 in the Stock Market: The Best ETFs to Buy in 2023

If you are looking for a way to invest your money in the stock market without having to pick individual stocks, exchange-traded funds (ETFs) might be a good option for you. ETFs are collections of stocks that track a certain index, sector, theme, or strategy. They offer diversification, low fees, and easy access to a variety of markets.

However, not all ETFs are created equal. Some have better performance, lower costs, or higher growth potential than others. To help you choose the best ETFs for your portfolio, here are five of the most promising ones you can buy with $1,000 or less.

1. iShares Core S&P Mid-Cap ETF (IJH)

• The iShares Core S&P Mid-Cap ETF (IJH) is one of the best ETFs to buy if you want exposure to mid-sized companies in the U.S. market. Mid-cap stocks are those with market capitalizations between $2 billion and $10 billion. They tend to have more growth potential than large-cap stocks, but less risk and volatility than small-cap stocks.
• The iShares Core S&P Mid-Cap ETF tracks the S&P MidCap 400 Index, which consists of 400 mid-cap stocks from various sectors and industries. The fund has a low expense ratio of 0.05%, which means it only charges $5 per year for every $10,000 invested. The fund also has a solid track record of performance, with an average annual return of around 10% since its inception in 2000¹.
• If you invest $1,000 in this ETF today and earn a 10% average annual return, you could have more than $16,000 in 20 years. If you invest an additional $100 per month, you could have more than $100,000 in the same period.

2. Vanguard Growth ETF (VUG)

• The Vanguard Growth ETF (VUG) is another great option for investors who want to capitalize on the growth potential of the U.S. stock market. This ETF focuses on large-cap stocks that have above-average earnings growth prospects. The fund tracks the CRSP US Large Cap Growth Index, which includes 287 stocks from sectors such as technology, consumer services, health care, and industrials².
• The Vanguard Growth ETF has a very low expense ratio of 0.04%, which is among the lowest in the industry. The fund also has an impressive performance history, with an average annual return of around 13% since its inception in 2004².
• If you invest $1,000 in this ETF today and earn a 13% average annual return, you could have more than $28,000 in 20 years. If you invest an additional $100 per month, you could have more than $200,000 in the same period.

3. Schwab US Large-Cap Growth ETF (SCHG)

• The Schwab US Large-Cap Growth ETF (SCHG) is similar to the Vanguard Growth ETF, but with a slightly different portfolio composition. This ETF tracks the Dow Jones U.S. Large-Cap Growth Total Stock Market Index, which includes 234 stocks from sectors such as technology, consumer discretionary, health care, and communication services³.
• The Schwab US Large-Cap Growth ETF has an even lower expense ratio than the Vanguard Growth ETF, at only 0.03%. The fund also has a comparable performance history, with an average annual return of around 12% since its inception in 2009³.
• If you invest $1,000 in this ETF today and earn a 12% average annual return, you could have more than $24,000 in 20 years. If you invest an additional $100 per month, you could have more than $180,000 in the same period.

4. VanEck Vectors Gold Miners ETF (GDX)

• The VanEck Vectors Gold Miners ETF (GDX) is a unique ETF that invests in companies that mine gold and other precious metals. This ETF can provide a hedge against inflation and market volatility, as well as exposure to the rising demand for gold as a safe haven asset.
• The VanEck Vectors Gold Miners ETF tracks the NYSE Arca Gold Miners Index, which consists of 53 companies that derive at least 50% of their revenue from gold mining or related activities. The fund has a moderate expense ratio of 0.52%, which is reasonable given the specialized nature of the fund. The fund also has a strong performance history, with an average annual return of around 15% since its inception in 2006.
• If you invest $1,000 in this ETF today and earn a 15% average annual return, you could have more than $33,000 in 20 years. If you invest an additional $100 per month, you could have more than $260,000 in the same period.

5. ARK Innovation ETF (ARKK)

• The ARK Innovation ETF (ARKK) is one of the most popular and exciting ETFs in the market today. This ETF invests in companies that are disrupting their industries with innovative technologies and business models. The fund focuses on four main themes: genomics, next-generation internet, industrial innovation, and fintech.
• The ARK Innovation ETF is actively managed by ARK Invest, a firm led by renowned investor Cathie Wood. The fund has a high expense ratio of 0.75%, which reflects the active management and research involved in selecting the stocks. The fund also has an astounding performance history, with an average annual return of around 40% since its inception in 2014.
• If you invest $1,000 in this ETF today and earn a 40% average annual return, you could have more than $500,000 in 20 years. If you invest an additional $100 per month, you could have more than $7 million in the same period.

These are some of the best ETFs to buy with $1,000 or less. Of course, past performance is not a guarantee of future results, and you should always do your own research before investing in any ETF. However, these ETFs offer a combination of low costs, high returns, and diversified exposure that can help you achieve your financial goals.