I just spoke with Tom Lydon, a financial adviser, blogger, and coauthor of the new book iMoney: Profitable ETF Strategies for Every Investor. Here's his advice for novice investors interested in building an all-ETF portfolio:
For a new investor, it's important to have diversification. Given that we've had a decline in the market, it's a good time to get in. I'd encourage large, mid, small, and international ETFs. From a diversification standpoint, Vanguard Total Stock Market (symbol: VTI) is a fund to consider. It's a good, quick allocation for someone who doesn't want to necessarily have to pick asset classes. The underlying index has a little bit of everything.
Here's the thing about international investing: The world's market cap is two thirds outside the U.S. But here domestically, we have the vast majority of our allocation in the U.S. We are way overallocated domestically, and we should have more allocation internationally. If you want just international stocks, because you're pretty well represented domestically, consider Vanguard FTSE All-World ex-U.S. (symbol: VEU).