We’re in a period of economic uncertainty, and at times like this, picking individual stocks can be especially difficult. Instead, you may want to invest in exchange-traded funds (ETFs) – funds that trade like stocks.

If you’re willing to accept some risk for a shot at market-beating returns, check out the VanEck Semiconductor ETF (ticker: SMH), which tracks an index of 25 companies in the semiconductor production and equipment industry. Its shares of Nvidia, Taiwan Semiconductor Manufacturing and Broadcom make up more than 40% of the fund’s value. All three have performed well in recent years and are leaders in the artificial intelligence boom.

The ETF has averaged annual gains topping 21% over the past 15 years. It looks well-positioned to keep outperforming the stock market, with its top stocks growing rapidly. The need for semiconductors should continue to grow, driven by AI and future technologies.

Meanwhile, these stocks have all built formidable competitive advantages, which should help them continue to outperform the broad market.

While the coming months are likely to remain volatile, the VanEck Semiconductor ETF is poised to deliver strong growth. (The Motley Fool owns shares of and recommends Nvidia and Taiwan Semiconductor Manufacturing. It recommends Broadcom.)

Ask the Fool

Q. What’s the “Rule of 110”? –– G.L., Pasadena, California

A. It’s a rough guideline for how you might allocate your assets. It’s conventional wisdom that as we age, we might shift some of our investment portfolio from stocks to “safer” categories, such as bonds and even certificates of deposit (CDs) or money market accounts. But how much should you keep in stocks at any one time? Enter the Rule of 110.

According to the rule, if you start with the number 110 and subtract your age, you’ll arrive at the best percentage of your portfolio to keep in stocks. So if you’re 50, you’d be 60% in stocks. If you’re 30, you’d be 80% in stocks.

Of course, we’re all different, with different risk tolerances, goals and needs, and the rule isn’t ideal for everyone. Some recommend starting with 120 if you want to be more aggressive. Others point out that if you’re still young – maybe 25 or even 35 – you might want to keep most or all of your long-term dollars in stocks.

Q. How will we know if we’re in a recession? – N.H, Little Rock, Arkansas

A. Recessions are defined in different ways. The International Monetary Fund defines it as “a sustained period when economic output falls and unemployment rises.” The nonprofit National Bureau of Economic Research notes that a recession typically lasts at least a few months and “begins when the economy reaches a peak of activity and ends when the economy reaches its trough.”

Many consumers are worried that a recession could be looming, as the economy contracted in the first quarter of 2025. Remember, though, that the U.S. has always recovered from recessions.

My dumbest investment

My most recent regrettable investment was buying into a renewable energy company on an investing app, when it was listed as the best-performing stock that day. It was a terrible buy! It dropped by more than half. I hope at some point it recovers enough so I can break even. – G.T., online

The Fool responds: You made some common rookie mistakes – such as being wowed by a strong-performing investment. If a stock or fund surges over a day or even a year, many people might buy into it, thinking it will do that frequently. But it may well be the only time it does so – and the much higher current price might have moved the investment into overvalued territory.

It’s best not to rely solely on a recommendation, but to do your own digging into any potential investment. Any company you’re interested in should have a good website with an area for investors, where you should find its quarterly and annual reports. If the site has little information, that’s a bad sign.

You were smart to think that renewable energy is likely to grow in prominence, but not all renewable energy companies will be great investments; some will prosper while others flame out. Finally, consider just selling this (or any other) stock if you no longer believe in the company. Aim to earn your lost money back in a more promising stock.