A Beginner-Friendly ETF Portfolio That Requires Almost No Maintenance

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.

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.

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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.

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.

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.