ETF Investing for Beginners: Build a Portfolio With Just 3 Funds

Wall Street wants you to think investing is complicated. It is not. You can build a world-class portfolio with just three ETFs.

The 3-Fund Portfolio

US Total Stock Market ETF — covers every publicly traded company in America. One fund, instant diversification across 3,000+ stocks.

International Stock ETF — exposure to developed and emerging markets outside the US. Reduces home country bias.

US Bond ETF — stability and income. Bonds cushion your portfolio when stocks drop.

The Allocation

A simple rule: your age in bonds. Age 30? Hold 30% bonds, 70% stocks. Age 50? Hold 50/50. Adjust based on risk tolerance.

For the stock portion, a common split is 70% US / 30% international.

Why ETFs Beat Individual Stocks

Over any 20-year period, 90% of professional fund managers fail to beat the index. If the pros cannot do it, picking individual stocks is gambling, not investing.

ETFs give you the entire market for expense ratios as low as 0.03% — that is $3 per year on a $10,000 investment.

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