If I Could Own Only 3 ETFs for the Next Decade, It Would Be These
Written by David Dierking for The Motley Fool -> Picking individual stock winners can be time-consuming, exhausting, and challenging. Sometimes the simplest solutions are the best ones. Investing in just a few equity ETFs can give you a diversified, buy-and-hold portfolio that
Picking individual stock winners can be time-consuming, exhausting, and challenging.
Investing in just a few equity ETFs can give you a diversified, buy-and-hold portfolio that simply relies on long-term economic growth.
Investing doesn't need to be that complicated. Instead of trying to pick dozens of winning stocks to fill out your portfolio, it's easier to choose a couple of logical long-term themes and buy the exchange-traded fund (ETF) that best targets them.
I think a great portfolio for someone who doesn't want to overthink things and keep it simple includes three ETFs. One for U.S. stocks, one for international stocks, and one for dividend stocks. It doesn't need to be more complex than that. The first two give you comprehensive coverage of the entire global equity market. The third provides extra exposure to a proven strategy that fits in almost any portfolio.
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Here are the three ETFs I'd use today to build this portfolio.
The Vanguard Total Stock Market ETF (NYSEMKT: VTI) is the best way to invest in the entire investable U.S. equity market. It's more expansive than just the S&P 500 (SNPINDEX: ^GSPC) by including roughly 3,000 additional mid- and small-cap stocks. Its 0.03% expense ratio means it costs next to nothing to own.
The Vanguard Total International Stock ETF (NASDAQ: VXUS) is essentially the equivalent of the Vanguard Total Stock Market ETF , but for non-U.S. stocks. It holds an extraordinary 8,700 stocks, with a split of roughly 75% developed-market stocks and 25% emerging-market stocks. It has an expense ratio of just 0.05%.
