The fear of missing out (FOMO) is a common investing mistake. You discover a stock that’s delivering market-beating returns. Those familiar emotions kick in, and you chase them higher so you don’t miss the opportunity. 

However, FOMO is directly related to a concept known as The Greater Fool Theory. That means you buy a stock believing that there will always be another investor (or fool) who will pay a higher price. Unfortunately, the concept is rooted in emotion, not fundamentals.  

And there’s a reason why investors are advised to keep their emotions in check. Stocks don’t move in the same direction all the time. Time and again, the higher and faster stocks climb, the lower and faster they fall.  

And if your portfolio is made up of only a handful of stocks, there’s more at stake than just feeling like a fool. It can take a long time to recover from a sharp correction.  

That’s exactly the kind of risk-reward dynamic that makes exchange-traded funds (ETFs) attractive. These funds trade like stocks but provide exposure to dozens of stocks to help smooth out individual stock volatility.  

There are trade-offs, of course. ETFs generally don’t perform as well as individual stocks, and they come with fees that can eat away at your overall gains over time. However, what they may lack in growth, they more than makeup for in their ability to allow you to sleep well at night. And to never worry about being played for a fool. 

If you’re considering investing in ETFs for the first time or wondering how to get broader exposure to different sectors, this special presentation is for you.  

We used the MarketBeat ETF Screener to highlight seven ETFs that could be part of a diversified portfolio for fund investors. With each pick, we’ll explain why we chose it and how it fits into a broader asset mix.