Most high-flying growth stocks have been on a painful descent over the past three months, and the correction has intensified lately. If you're fortunate enough to have money on the sidelines -- even as little as $1,000 -- this could be an opportunistic time to pick up great companies at great prices.

I'm never running low on stock ideas, but I'm also a fan of exchange-traded funds (ETFs) to diversify immediately into a basket of stocks with a single transaction. With so many brokers offering commission-free trading these days, there are plenty of ways to get more bang for your investing buck. Let's go over some ETF and stock ideas where your $1,000 can go to work right away in taking advantage of the market dip.

A person doing some head scratching as a stock chart moves lower.

Image source: Getty Images.

Some ETF ideas

Unlike traditional mutual funds that are bought and sold at the end of every trading day, ETFs trade alongside stocks on major exchanges. There are a couple of questions I ask myself in considering an exchange-traded fund:

  • If it's an index-based fund, is the fee low enough to justify buying the ETF instead of cherry-picking the individual components?
  • If it's an actively managed ETF with a higher expense ratio, is it a historically strong performer or unique enough that it would be difficult to duplicate?

Sometimes you get the best of both worlds. Vanguard Total World Stock Index ETF (VT 0.50%) offers a way to buy into more than 9,000 of the planet's largest stocks. That's not a typo. Vanguard Total World Stock Index ETF consists of 9,045 current holdings, using the Spliced Total World Stock Index as its benchmark. The 0.08% expense ratio is great. You'll be paying just $0.80 over the course of a year for a $1,000 stake in the ETF. 

I don't mind paying a bit more of an expense ratio for a fund that I would be challenged to duplicate. Tax-Managed Buy-Write Opportunities Fund (ETV 1.34%) sells short-term covered calls on the stocks it owns, providing a healthy flow of distributions at the expense of limiting the upside of the actual stock investments. IQ ARB Merger Arbitrage ETF (MNA 0.06%) -- true to its name and ticker symbol -- gives investors a way to play the arbitrage market in the mergers and acquisitions game. It identifies companies that are being acquired selling at discounts to the eventual buyout price. If the gap is wide enough, it can cash in on the difference by buying the stock at a discount and shorting an equivalent amount of the other stock trading at a premium. It would take a hit if the deal falls apart, but that's where a fund engaging in arbitrage across a large spectrum of deals makes sense. 

Some stock ideas

I'll wrap things up with a look at some of my favorite growth stocks that have fallen sharply in the recent dip. You can do worse than putting some of that $1,000 to work in Axon Enterprise (AXON 2.09%), Zoom Video Communications (ZM 0.76%), and fuboTV (FUBO 1.17%).

Axon makes the namesake body cameras that police officers wear. It also makes Taser stun guns and owns the Evidence.com cloud-based platform that stores evidence recorded with its wearable cameras. The stock has shed 42% of its value since peaking three months ago. It's a company whose products have never been as popular as they are right now, making sure that both sides of every confrontation gets told, and the sell-off is simply not justified. I'm not alone: Raymond James upgraded the stock to a strong buy on Wednesday morning.

Zoom stock has been discarded since viable COVID-19 vaccinations have hit the market, but that seems premature. Zoom packed years of growth into just a handful of months during the pandemic. Even as we return to face-to-face interactions, the convenience and simplicity of Zoom meetings, virtual classes, and video social events aren't going away. The stock enters Wednesday's trading at 47% below its high.

The hardest hit of the three dip stocks I like here is fuboTV. The live-TV streaming service has seen its shares plummet 66% since topping out five months ago. The company has done nothing but deliver blowout and accelerating top-line growth. It had another monster quarter that it reported last week. Its subscriber base has more than doubled over the past year as folks cut the cord from cable and satellite television providers while still longing for a streaming equivalent of flipping through more than a hundred live TV channels.

I own all three of these stocks, and I wouldn't hesitate to add to those positions here. Your $1,000 can go a long way if you buy the right ETFs and stocks.