Is it a good idea to invest in individual stocks and ETFs at the same time?

I am a beginning investor and I have opened a discount brokerage account. I plan to put $100 a month into the account and every 4 months buy stocks. (to cut down on the transaction fees) I also want to invest in an ETF that tracks the S&P 500.

Is it a smart investing strategy to buy individual stocks and then 4 months later buy into an ETF, then 4 months later buy the individual stocks again? (Basically I would be alternating my purchases between stocks and ETF).

Is this a wise investment strategy or should I just concentrate on one or the other? I like the excitement of indivdual stocks but I also am looking at the long term and think ETF are better down the road.

Any help will be greatly appreciated.

Anything that fits your "asset allocation" model with diversification can help. Many people only invest in ETF's because they're less volatile than any individual stock.

Here's what I do;
I have about 50% in Mutual Funds
I have about 30% in ETF's
I have about 20% in individual stocks.

I make sure that the "total" falls into my "asset allocation" model (mine.... not yours.....) of;
35% In large cap stocks
30% in International stocks
15% In mid & small cap stocks
20% In bonds and cash

My "asset allocation" is on the aggressive side. Read some books on investing and then create your own "asset allocation". Use that as your pointer as to what to buy. It's more important than what percentage is in what type of vechile (MF's, Stocks or ETF's).

It's all right as long as you don't buy stocks that are in the sector as the etf....but your best best is to go etf's all the way and let it sit there and grow....you have less risk.

I like ADR's for Corporations based in Europe. Investing in the Euro, Swiss Franc, or Pound Sterling is safer than investing in US Corporations, in my opinion.
Invest for the long term.

Until you become more experienced, its best to stick with diversified ETFs.

If you're trying to cut down on transaction costs, you should put your money in one mutual fund. If you are looking to invest in individual stocks, I would just trade one at a time. ETF's are like stocks in that they can be bought and shorted. They also carry the same risks as stocks although I doubt an ETF could go to Zero.

Look, since you're starting out, learn as much as you can before committing any capital, I don't see an edge in the method you are describing. Check out William O'Neils How to make money in stocks.

I read the previous replies, and all of them have valid points.

I personally have invested for over 30 years. I have used individual stocks, mutual funds, ETF's, Precious metals, Bonds....etc.........

The best investment I ever made was a DRIP plan I started about 22 years ago.

They are seldom talked about because brokers make very little money when they suggest them. Yet, they have proven to be one of the best, if not the best, long-term strategy on Wall Street.

The best part is you get solid annual returns from well-known, safe Blue Chip companies like: McDonalds, General Electric, Pfizer, Walmart, US Bancorp.......etc........

They are inexpensive to start and maintain, and your dividends are reinvested for free.

They are perfect for small investors, as well as big investors. They are safe and allow you to not care about whether the market is going up or down.