Shares or ETFs? Depends on your time input & skill level

Will, this is a common question from those who are just starting out in investing and ETFs have many advantages which make them attractive to the casual or "defensive investor". 

Ultimately it all depends on how you see yourself as an investor. If you have little interest in following companies closely, you want good diversification and simply want to put your money into the stock market then a low cost ETF tracker is a great option.

Shares or ETFs? Or are there other options?

For instant diversification, it's not just a question of "shares or ETFs", though. You could look at Mutual Funds (known as Unit trusts or Limited Investment Companies in some countries).

There are many different types of mutual funds but effectively you are hiring a manager to analyze stocks on your behalf and make the investment decisions for you. If you can find an investment manager who has a similar outlook to you and keeps charges low then this could be a very sensible and realistic option. 

There are also many different types of ETFs. For example, you can buy ETFs that focus on particular sectors (such as Pharmaceuticals or Financials) or you could buy ETFs focusing on certain markets or geographies (such as the USA or the emerging markets).

If you are serious about investing in ETFs, it's crucial for you to understand what the ETF is tracking and what the underlying securities are.

I've heard horror stories of people buying 2x levered ETFs of certain commodities and losing a load of money because they didn't understand the underlying structure.

Fidelity (who offer a range of funds) has an excellent set of information pages on the advantages and disadvantages of ETFs: https://www.fidelity.com/learning-center/investment-products/etf/what-are-etfs

My Advice to you...

If you don't want to spend too much time weighing up the whole "shares or ETFs" conundrum, then I think that buying a low cost ETF that tracks some of the major stock indices such S&P 500 or the FTSE 100 will at least give you average results over time. 

What you need to understand is that average is actually very good! Remember that most mutual fund managers under perform the market over time. If you think about it, this makes sense because in aggregate, with all investors included, the average result must be average (the number of out performers will be offset by the number of under performers).

This, of course, is before all the fees and costs are taken off which drags the average fund managers performance from average down to below average. Good quality ETFs tend to have lower costs than mutual funds which means your performance is likely to be better than most fund managers!