How to Build Your First ETF Portfolio with Just 3 Funds

Building a diversified investment portfolio can seem daunting, but it's possible to get started with just a few ETFs. Here's a simple three-fund portfolio strategy: ### 1. Total Domestic Stock Market ETF This fund gives you exposure to the entire stock market of your home country (e.g., the S&P 500 or a total market index in the US). It's the core of your portfolio, providing broad exposure to large, medium, and small-cap companies. ### 2. Total International Stock Market ETF To diversify geographically, add an ETF that covers developed and emerging markets outside of your home country. This reduces country-specific risk and gives you a stake in global growth. ### 3. Total Bond Market ETF Bonds are generally less volatile than stocks and provide stability to your portfolio. A total bond market ETF holds a mix of government and corporate bonds of various maturities, acting as a cushion during stock market downturns. ### Asset Allocation The percentage you allocate to each fund depends on your age, risk tolerance, and investment timeline. A common starting point for a younger investor might be 60% domestic stocks, 30% international stocks, and 10% bonds. As you get older, you might increase your allocation to bonds.