Growth isn't cheap in a rallying stock market. That's been a clear factor impacting investors' returns in recent months. Demand in the past year has been strongest for large tech stocks, driving the Nasdaq Composite index up a blazing 36% compared to the S 500's 26% gain.

That surge made growth stocks more expensive, both in absolute terms and in comparison to their value-focused peers. That raised the risk that you'll buy near a peak valuation while also making it harder to achieve diversification when you're putting smaller amounts of capital -- say $500 -- to work.

An exchange-traded fund (ETF) offers a solution to both of those problems. Putting $500 into a growth ETF will give you exposure to hundreds of stocks with just a single purchase. You'll still be susceptible to downturns but not nearly as much as you would be with just a few individual growth stocks in your portfolio.

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Source Fool.com