Whether you're a veteran investor or have been in the market for only a few days, you know at least one thing for sure -- picking stocks is tough! It certainly looks much easier from the outside looking in than it actually is once you're in the game. Odds are good you've made some costly decisions. If so, welcome to the club.

If you'd like to try something else with a little less risk and a little less stress, exchange-traded funds (or ETFs) are a great alternative to individual stocks. While you still get all the prospective upside that only the stock market offers, these theme-based baskets of stocks typically don't create the short-term trading temptations that tend to cause problems for antsy investors.

Here are three exchange-traded funds that will not only help mellow out your portfolio's volatility but perhaps set the stage for even better performance.

Stressed investor staring at a computer screen.

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1. Vanguard Dividend Appreciation ETF

Most investors don't start thinking much about investment income until later in their lives, and even then, many of them never completely give up on growth. But limiting yourself to growth names comes at a pricey risk. Not only can the big swings of growth stocks tend to panic you into making a bad decision, they typically don't generate fresh cash that can then be used to buy other stocks at opportune times.

The Vanguard Dividend Appreciation ETF (NYSEMKT:VIG) fixes that problem, even if it makes up only a small portion of your portfolio.

Just as the name suggests, the Vanguard Dividend Appreciation ETF holds stocks with a strong track record of not just paying a reliable dividend but growing it. The fund is designed to reflect the S&P U.S. Dividend Growers Index, which is a collection of U.S. stocks that have increased their annual payouts for at least the past 10 years. The curious nuance is, the index excludes the highest-yielding 25% of stocks that would otherwise be eligible for inclusion as a means of weeding out the stocks that the market is suggesting are too risky to price more conventionally. Still, the ETF's dividend yield is a healthy 1.5%, and of course, it grows every year.

Do note that your broker's default option is to reinvest this fund's dividend payment into more shares of the ETF itself, but you don't have to. You can collect these payments in cash and save it up to step into a new investment without being forced to sell a different holding.

2. Invesco WilderHill Clean Energy ETF

Just because you're investing in exchange-traded funds doesn't mean you have to think and act less aggressively than those who pick individual stocks do. You can still plug into the megatrends that are shaping our world and generating profits while they do.

Take the Invesco WilderHill Clean Energy ETF (NYSEMKT:PBW) as an example. The exchange-traded fund is solely focused on companies that contribute to the clean energy cause. FuelCell Energy, SunPower, and Tesla are among this ETF's biggest holdings, although it's worth noting that none of these ETF's positions account for more than about 2% of the fund's total value. It truly is a well-diversified pool of stocks.

And that's as it should be. Green and renewable energy technologies are relatively new and relatively complicated. Keeping close tabs on even just a few of the industry's names isn't easy and has been the source of many investor headaches. By holding on to a fund like the Invesco WilderHill Clean Energy ETF, you're investing in the entire movement without risking ownership of only one or two of its companies.

And what a movement it is! The U.S. Energy Information Administration estimates that renewable energy will be the source of most of the world's power-production capacity growth between now and 2050. Renewables account for about 15% of global electricity production now, but they will be the backbone of 27% of global power production by 2050.

3. Vanguard Real Estate ETF

Finally, add the Vanguard Real Estate ETF (NYSEMKT:VNQ) to your watchlist if you'd like to get off the stock-picking train but still want solid returns on your money.

Contrary to a common belief, real estate isn't a slow and stodgy investment option even when done via an exchange-traded fund. It's just not tethered closely to the stock market, and therefore it ebbs and flows at different times. This doesn't mean owning real estate will perfectly hedge you from stock market setbacks. It will buffer this volatility, though, helping you not to panic and subsequently make a bad decision with your portfolio.

A quality real estate exchange-traded fund like the Vanguard Real Estate ETF also removes you from the tricky process of identifying the right real estate investment trust (or REIT) to buy; this one owns a bunch of different kinds of real estate investment trusts: office buildings, hotels, residential stuff, and more. Warehouse and logistics name Prologis, mall owner Simon Property Group, and even cellphone tower operator American Tower are constituents of this fund. solving your diversification challenge with ease. Holding all of these REITs in one basket removes the temptation of trying to time entry and exit with individual REITs and effectively forces you to own them with the long-term mindset you should have when buying real estate anyway.

The kicker: This ETF's current dividend yield of 2.2% is well above the S&P 500's current yield of 1.3%, if the Vanguard Dividend Appreciation ETF's discussion has visions of dividends dancing in your head. Don't misread the message, though. There's capital/price appreciation to be had with real estate investments as well.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.