A Beginner-Friendly ETF Portfolio That Requires Almost No Maintenance
A Beginner-Friendly ETF Portfolio That Requires Almost No Maintenance
David Dierking, The Motley FoolWed, February 25, 2026 at 2:05 PM UTC
0
Key Points -
It's easier than ever to construct a well-diversified, ultra-low-cost portfolio with just a few good ETFs.
A simple mix of the total U.S. stock market, dividend stocks, and investment-grade bonds give you pretty much everything you need.
These three ETFs from Vanguard and Schwab are my favorites.
10 stocks we like better than Vanguard Total Stock Market ETF ›
One of the things that the ETF marketplace does best is to provide easy, low-cost access to almost any type of investment. Whether it's stocks, bonds, commodities, precious metals, individual countries, or just about anything else, there's probably an ETF that will fit.
But if you're just starting out, it can all feel intimidating. More than 4,000 different ETFs are available for investors to choose from. Some are complex. Some are downright dangerous. Even with the best of intentions, it can be easy to lose money if you don't know what you're doing.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Thankfully, there are a lot of great options out there, too. Putting together a broadly diversified, ultra-cheap portfolio with just a few funds has never been easier. With just a little guidance and a few good choices, you can set yourself up for a lifetime of wealth creation.
Beginners are probably best suited for a simple stock/bond portfolio to start. You can always add around the edges in time, but starting out with these two core asset classes is a great start.
Here are three ETFs to use in some combination that combine strong market coverage, a good selection strategy, and ultra-low fees.
Individual investor examining financial statements.
Image source: Getty Images.
Vanguard Total Stock Market ETF
The Vanguard Total Stock Market ETF (NYSEMKT: VTI) is the best and most comprehensive way to invest in U.S. stocks. It invests in more than 3,500 different companies, large to small, so you'd be owning virtually every public stock in the United States. Its 0.03% annual expense ratio means you'll pay next to nothing to own it.
Many people will probably prefer to use something like the Vanguard S&P 500 ETF for this. That's absolutely a strong choice for your core U.S. equity position. But it invests in only large companies. I prefer owning large-, mid-, and small-caps so I own the entire market.
Schwab U.S. Dividend Equity ETF
The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) is one of the best dividend ETFs in the world. It uses a strict stock selection process that looks at a company's financial health, history of dividend payments, and current yield. It essentially narrows down a broad universe to just the 100 stocks that demonstrate the best combination of all of these characteristics.
Even though they've been overshadowed by tech stocks for the past several years, dividend-paying stocks have demonstrated their ability to enhance returns and reduce risk over the past several decades. They provide stability and quality, and the income component can help improve total returns.
Advertisement
Vanguard Total Bond Market ETF
The Vanguard Total Bond Market ETF (NASDAQ: BND) would act as a core fixed income position. It works just like the Vanguard Total Stock Market ETF, but you'd be owning the entire investment-grade bond market instead. That includes Treasuries, corporate bonds, and a few other credit types sprinkled in.
Bonds are often considered a good risk counterbalance to stocks. When stock prices are falling, bond prices can rise as investors seek out safer investments. That kind of diversification can help minimize downside risk, reduce overall volatility, and give you the chance to generate positive returns in multiple market environments.
How to put these three ETFs together in a portfolio
The percentage of your portfolio you decide to dedicate to each of these three ETFs depends on your personal situation. Someone who's younger and has more time to ride out the highs and lows might prefer more of their portfolio in stocks. Someone who is less tolerant of market risk might prefer more money in the relative safety of bonds. It really depends on what you're comfortable with.
A fairly standard, middle-of-the-road asset allocation might include 50% total stock market ETF, 30% dividend ETF, and 20% total bond market ETF. But that can be tweaked all across the asset allocation spectrum as you see fit.
But in the end, these three ETFs check all the boxes for the types of investments you want in your portfolio. Even if you only ever go with these three, you'll quickly be well on your way to long-term financial security.
Should you buy stock in Vanguard Total Stock Market ETF right now?
Before you buy stock in Vanguard Total Stock Market ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard Total Stock Market ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $420,864!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,182,210!*
Now, it’s worth noting Stock Advisor’s total average return is 903% — a market-crushing outperformance compared to 192% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of February 25, 2026.
David Dierking has positions in Vanguard Total Stock Market ETF. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF, Vanguard Total Bond Market ETF, and Vanguard Total Stock Market ETF. The Motley Fool has a disclosure policy.
Source: “AOL Money”
